How to Research Local Government Finance

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This section introduces a little-known companion to the Freedom of Information Act which allows interested members of the public to inspect the accounts of the local authority and the police force. In England, this is called the Audit Commission Act (1998); in Scotland it is known as the Local Authority Accounts Regulations (1985); in Wales, the Public Audit Wales Act (2004) and, in Northern Ireland, the Accounts and Audit Regulations (2006).[1] In all its variants, the Act assumes the public to be part of the auditing process of local government, which obliges the local authority to open its accounts to inspection for twenty days (fifteen in Scotland) per year. These dates must be advertised in a public notice via a newspaper circulating in the local area that will usually give the name of the officer you should contact – deal with them directly without being sidetracked by the press officer.

The Act also permits the copying of ‘all contracts, books, deeds, vouchers, receipts, bills and invoices under audit’ by ‘persons interested’. In England, ‘persons interested’ are defined as ‘persons making a direct financial contribution to the authority’s account (council tax payer) or local elector, or representative of business in the area making indirect contributions to the authority’s accounts through uniform, non-domestic business rates’. If you do not live or work in the area in which you are interested, you can always work with someone who does. Precise details of salaries, benefits and pension payments to current/former staff are excluded from this, but the Act has been amended to compel the inclusion of a formal note detailing (by job title) employees earning over £50,000 per year and heads of service earning more than £150,000 per year. The Act prohibits any alteration to the accounts being made within the inspection period and any breach of these regulations is an offence; it also contains the right for the public to object to the accounts.

Recent legal cases, in which councils have tried to renege on their duty to open their accounts to scrutiny, have favoured the public right to view, concluding that councils may not solely provide a summary of the accounts when a request has been made to view the detailed books; councils may not use the Data Protection Act to withhold details and they may not refuse to disclose information on the basis of the motive behind the request or the use to which information might be put.[2] A recent High Court ruling upheld the right of the public to view the accounts in the face of claims that commercial confidentiality would be compromised. Despite what you may be told, you have a right to inspect the accounts in person without an appointment and without permission from any individuals or companies; similarly, documents identifying members of staff are not exempt.

In advance of the inspection period, you may request a copy of the spreadsheet and you could find out the name of the external auditor. The spreadsheet will provide an overview, enabling you to narrow your search and request a breakdown in particular areas e.g. legal and arbitration, consultancy, public relations. At this time, you can write to or email the responsible officer, requesting areas of the accounts which are of interest to you. The council has the right to redact any personal information from the spreadsheet only with the prior consent of the external auditor, so you may wish to check that this permission has been granted.

The location of documents may present a logistical hurdle to their inspection. Some may be kept in schools, which will be closed if the inspection period falls during holiday time, or they may be outsourced to financial accounting services and stored hundreds of miles away.

It is an offence for an official to interfere with a person’s legitimate right to view and copy the accounts. Any attempted obfuscation may be reported to the external auditor as a prelude to making a formal objection to the accounts. You may also inform the local authority that you intend to seek an order from the court for the material to be supplied in accordance with the Act, giving a deadline for the material to be provided. You are entitled to be represented by an agent.

Assuming you manage to surmount any obstacles in your path, on the advertised dates you will then be able to request direct access to all relevant contracts, receipts, invoices etc., by departmental budget code and description. Request particular documents in a bid to ensure that all expenditure has been lawful, bearing in mind that you might be charged for copying.

You can check expenditure against the council’s own financial regulations to ensure that it complies with procedure. If you are looking at an elected member’s expenses, cross reference data from the accounts with the statutory register of elected members’ expenses and with the statutory public register of elected members’ financial and non-pecuniary interests. Note that arms’ length external organisations and Public Finance Initiative (PFI) contractors seem able to exclude their accounts from scrutiny under the Act, but they intersect with local authorities in places, which means you are entitled to see all relevant contracts and invoices.

Related legislation concerning local authority affairs includes: Local Authorities (Members Allowances) Regulations 2003 – which requires councils to maintain and make available a public register of all payments to and expenses claimed by councillors. Local Government Act (2000) – which requires councils to maintain and make available a public register detailing the personal and financial interests of all elected members and co-opted members. Local Authorities (Model Code of Conduct) Orders (2001) – which requires councillors to disclose employment, business, property, investment, contractual, political sponsorship, charitable, trade union and professional interests.

Based on a presentation by Richard Orange:

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