Powerful voice figures it out

There is a palpable air of growing self-confidence at the Audit Commission these days. Not that staff there ever seemed racked by self- doubt as they proposed ways to improve management of local government and the health service. But the commission is taking on big, sensitive, political issues.

Leaks from a report currently being finalised by the commission suggest that it will be strongly critical of government sentencing policy on juveniles. It is considering proposing that well-off parents should pay compensation to victims of their children's crimes and also pay hotel charges if their children are taken into care.

The commission may rewrite some of the more controversial sections of the report, but its willingness to tackle head-on issues that make politicians wince is becoming typical. Last year, it pointed out that public expectations of street policing were unsustainable, and criticised elements of the Government's flagship policy of GP fundholding.

"Our lack of restraint from politicians allows us to say what nobody else dares say, but everybody knows is true," says Andrew Foster, the Audit Commission's controller. "We are moving with the social grain of the time in an apolitical sense, and saying, 'A plague on all your professional houses.' "

During the past three years, the commission has consulted more widely with audited bodies, giving them more say in choosing subjects of "value for money" studies. By broadening the decision-making process, the commission has had to worry less about upsetting any particular vested interest.

The commission has good reason for greater self-confidence. Mr Foster has just been re-appointed, after his initial three-year contract expired. Observers have responded well to the internal management changes he has brought in, especially in shaking up the arm's-length District Audit, and they are starting to criticise the National Audit Office (which audits central government) in comparison. And the Labour Party has ceased calling for the Audit Commission's abolition, and is instead looking to give it more powers to intervene in badly run councils. Studies from the commission will carry even greater weight in the future, with more emphasis given to users' views. "Individual aspects of services may be fine, but in the way they are brought together the experience the user has may be very discrepant to that which the professional thinks they had," says Mr Foster.

One of the next reports published will look at NHS maternity services from a user's perspective; one last year was critical of poor health- care teamwork that led to delays in treating elderly patients with broken hips.

A focus point for improvement continues to be District Audit. Last year's external review, conducted by Jim Butler, a former senior partner at KPMG, made clear that the commission's main weakness was the failure to translate national value for money surveys into local application. Mr Foster admits that local VFM reports are "still not as good as they should be".

Reform is under way. "All district auditors went through two-day competency tests, and some are no longer with us ... For the first time ever, we have recruited some district auditors from the firms. We are employing more specialists, with a better skill mix."

District Audit has improved its cost effectiveness. An initial trial market test found it losing most contracts against the private sector. In the latest round, it won them all. There is no need, says Mr Foster, to disturb the traditional split of 70/30 between the number of district audits undertaken by District Audit itself and those conducted by the big firms.

The other priority is to improve collaboration with the National Audit Office. Many areas of public sector expenditure overlap traditional boundaries between the two government audit bodies: housing benefit is administered by councils, but funded by the Department of Social Security. The joint study by the NAO and the commission, of how these statutory bodies work together, will form the basis of further operations.

There is a programme of secondments operating between the commission and the NAO; the two bodies will soon hold an "away day" to plan joint strategy; and they recently gave joint evidence to the Treasury review. The Audit Commission has even been brought in to conduct a management study on the Housing Corporation, which the NAO audits.

But there is one problem the Audit Commission has never come to terms with. Despite the repeated attention of the Audit Commission and district auditors, there have been serious problems with rogue local authorities including Lambeth, Hackney and Sheffield.

Mr Foster does not accept that this represents a failing in the Audit Commission or District Audit, and points out that the criticised authorities have been subject to critical reports. It is up to electors to exact a solution. "I am a believer in local democracy," he says. Mr Foster does not, though, demur from Labour's proposals for the commission to create advisory teams to help weak councils improve. It is clear that he believes that the Audit Commission could comfortably work with a Labour government.