§ Mr. Baldryasked the Secretary of State for the Environment what representations Her Majesty's Government have received following the publication of draft regulations prescribing the form of local authority statements of accounts; and if he will make a statement.
§ Mr. Kenneth BakerMy right hon. Friends have received some 50 representations on the draft regulations which they considered carefully. The responses clearly show that there is a widely held desire to see improvements in local government accounting, and that real progress is already being made in the way in which information about the finances of local authorities is presented, as evidenced by the Audit Commission's profiles. The point was also 733W made by those in local government that in their view statutory regulation is not an appropriate way of dealing with detailed accounting matters.
My right hon. Friends welcome this commitment of local government to seek improvements in the way in which they keep elected members and the public properly informed about their financial affairs. They also recognise that an unduly rigid regulation of accounting matters could be ineffective. In the circumstances, therefore, they have decided not to proceed with the making of the regulations, but to invite the local authority associations, in conjunction with the Audit Commission and the professional accountancy bodies, to establish in the course of 1986–87 their own formal arrangements for securing further improvement-including greater standardisation-in local authority accounts. My right hon. Friends believe that this will enable local government to build on the work which it is already doing, and that if it accepts this opportunity it should lead to significant improvements in local authority accounting without a need for comprehensive statutory regulations.