HC Deb 30 November 1999 vol 340 cc138-40
8. Mr. Tim Boswell (Daventry)

What steps he is taking to cut the costs of auditing the accounts of parish councils. [99014]

The Parliamentary Under-Secretary of State for the Environment, Transport and the Regions (Ms Beverley Hughes)

Although audit fees are a matter for the independent Audit Commission, the Government are aware of the impact that they can have on small parish councils. The commission is currently piloting two exercises to see whether the cost of audits of parish councils can be reduced while the necessary level of assurance is maintained.

Mr. Boswell

Does the Minister feel any sympathy for the parish clerk of Aston le Walls who has written to me to state that the parish council's audit fee for 1998 was only just under £500, plus value added tax? She is not the only one of my constituents in that position. The parish has a population of 350 persons, and a total precept of only about £3,500, so is not the audit cost totally out of line? Revenue must be safeguarded, but will the Minister urgently examine ways to introduce the necessary flexibility and a much cheaper audit process?

Ms Hughes

The figures that the hon. Gentleman gives are completely out of line: a precept of £3,500 is below the threshold of £5,000, and the average bill last year for a parish council of that size was £160. I hope that the hon. Gentleman will write to me to confirm the figures that he gave, and I shall certainly look into the matter, as the cost that he quoted bears no resemblance to last year's average. However, I remind him that the regulations establishing the current fee structure were introduced by the previous Conservative Government. As I said, the Audit Commission is conducting studies to determine whether appointing local auditors would bring down costs even further, especially for small parish councils.

Mr. David Taylor (North-West Leicestershire)

I thank my hon. Friend for that reply and am pleased to hear of the review. As a sitting parish councillor and an accountant, I have visited nearly all 25 parish councils in North-West Leicestershire. The impact of the audit fee is a common issue to be raised. Will she urge the Audit commission to look even more closely at the effect on the smaller community—typically with a population of fewer than 1,000—to find out whether there are ways in which the audit fee can be capped relative to precept as a proportion, or in relation to the volume of transactions? The commission is grappling with an important and difficult problem.

Ms Hughes

I thank my hon. Friend for that question. I know of his work on parish councils and his commitment. A scheme exists already under which small parish councils can effectively roll three annual reviews into an audit. It is a triennial scheme and the councils can have an audit once every three years, thereby cutting their overheads substantially. I hear what my hon. Friend says. The Audit Commission is considering ways in which it can bring costs down, possibly by appointing local auditors and provided that the necessary levels of assurance can be guaranteed. I know that my hon. Friend will agree, however, that although we want to reduce the costs and burdens on parish councils, it is nevertheless important that they are subject to an independent audit, which is important for the protection of public money and for the protection of councillors, so that they are seen to be accounting properly for that money.

Mr. Damian Green (Ashford)

The Minister seeks to reassure parish councils. Will she acknowledge that her right hon. Friend the Minister for the Environment, who is regrettably missing his second out of three departmental Question Times, although for reasons that I understand today, originally put much fear into the parish council movement by saying that the Government were thinking of abolishing such councils? Will the hon. Lady confirm that that idea was just an embarrassing mistake? Furthermore, can she tell us when we will see the rural White Paper, so that we can see in black and white what further attacks the Government are planning on hard-working parish councils?

Ms Hughes

We have no plans to abolish parish councils. The rural White Paper will be produced next summer.

Mr. David Drew (Stroud)

I thank my hon. Friend for her answer and register an interest. Like my hon. Friend the Member for North-West Leicestershire (Mr. Taylor) I am a member of a town council and I spend many hours toiling over its problems. As the Vice-President of the National Association of Local Councils, can I ask my hon. Friend whether she will continue to discuss with the association this very issue? As my hon. Friend the Member for North-West Leicestershire said, it is by far the most important issue that small parish councils raise. I am sure that if we can find a solution to the problem, we will continue to have healthy local councils in many areas.

Ms Hughes

Yes, I do hear what my hon. Friend has said. To put the matter in context, given the large number of parish councils in the country, the Audit Commission has received 75 complaints this year about the level of fees, in particular from small councils. It is not a problem of enormous significance, but I accept that it affects small councils disproportionately. We await with interest the results of the Audit Commission's exercise and will talk to it about how it can implement its findings to the best possible effect for small parish councils.