Is the David Walker that you quote so copiously without gloss the same David Walker who is the partner of Polly Toynbee and was for many years a Guardian journalist known for his left wing views?

Ah, the very same.

Will the Tuscan villa have to go?

Oh…. as to the size of the Press Office, the following PQ from Hansard may help:

Andrew Griffiths: To ask the Secretary of State for Communities and Local Government how many communications, marketing and press staff are employed by the Audit Commission; and at what cost in the latest period for which figures are available.

Robert Neill: …..
In the financial year ending 31 March 2010 the Communications directorate had a total of 48 posts, which included a national publishing centre, design team, digital media team, events team, regional communication managers, internal communications team, direct marketing officers and a national press office. Staff costs for this period were £2,352,517.

Flowerpower – oh right, so he’s married to PollyToynbee – that completely explains why Pickles isn’t lying and this isn’t a political move.

Thanks for the Hansard question detail, actually reinforces the point about that they don’t have ’48 presss officers’

@flowerpower

I think you are getting confused – as Bob and Eric did – between the Communications Directorate and being employed as a press officer.

The former will include secretarial staff, publishing staff and a wide range of people whose job isn’t to talk to the press, and 2 Press Officers.

The Audit Commission have debunked all the crap spouted by Pickles about their spending – the true reason they are being closed has little to do with saving the taxpayer money and a lot to do with some pay-back for the private sector auditors who so generously donated a lot of free labour to the Tory campaign.

“when you look at our redundancy obligations and pensions and so on, the cost of abolition could end up to a hugely greater sum.”

This is entirely nonsense.

Pension obligations are what is known as a sunk cost.

They have to be paid whether the Audit Commission exists or not, for they are the pensions accrued by the work people have already done. If the AC closes these pensions must be paid: if the AC stays open these pensions must still be paid. In fact, if the AC stays open then more pensions will accrue.

The first thing about the accountancy of sunk costs is that you don’t include them in your decision making about the future: for whatever decision you take doesn’t change how much you’ll have to pay for the sunk costs.

With the AC, of the £500 million of such costs, £400 million are the pension costs. That £400 million must be paid whether the AC stays open or closes: we cannot therefore include that £400 million in our decision about whether to close the AC or not.

The only relevant number here is how much will future pensions be if the AC stays open…..and that there is £400 million to pay for past ones shows that there’s a rather large cost, the pensions cost, which is not currently included in the running costs of the AC. So it’s actually even more expensive than we thought.

And that we have the *Audit* Commission, the accountants to the government, making this basic logical and accounting error is instructive, no? Bureaucracies will do and say anything to survive.

Those of us who hail from West Yorkshire know Fat Eric of old.

Pickles was the architect of the “Bradford Revolution”, which poisoned relations between the Tories and the other two main parties on the council for many years afterwards. Tony Grogan’s book “The Pickles Papers” refers (Pickles has denounced the book and threatened legal action against anyone quoting it, but this hasn’t stopped three copies of the full text being available online).

That so-called Revolution lasted until … the next round of council elections, when the Tories IIRC lost every seat they were defending – most of which were considered safe. But Pickles’ actions were much favoured by then PM Margaret Thatcher.

Pickles next surfaced in the well known Yorkshire constituency of, er, Brentwood and Ongar.

Sunny & Sevillista

You may chose to nit-pick about whether they are “press officers” or “communications managers” or members of the “digital media team”, but most sensible people will rejoice that Eric Pickles has closed down a profligate outfit that chose to employ 48 people in its communications department at a cost to the taxpayer of more than 2.3 million pounds. And that’s without taking into account the AC’s contract with a public affairs consultancy. The Audit Commission is hardly a public-facing outfit and during 2009 much of what little media attention it received concerned its own foolishness in losing a shedload of public money in Icelandic banks.

A quick trawl of the BBC website suggests that the Audit Commission chief exec is rolled out on the airwaves about 5 or 6 times per annum. A part-time press and PR aide plus a webmaster was what the organization really needed, not a Guardian hack promoted to a 6 figure salary with a team of 48 staff.

But then this is the value-for-money watchdog that spent £40,000 on potted plants.

As for Nu-Lab cronyism allegations: Mr Polly Toynbee ain’t by any means the only appointment that gave rise to controversy. From 2002-5 the AC was run by the husband of a Labour minister. The fact that his two previous jobs had been running a charity for the deaf and before that had been a “travel writer and photographer” raised a few eyebrows before it was pointed out that he had once worked for a bank – well over a decade previously.

As for

Mr Walker said the commission regularly needed to hold meetings with staff and clients, and Newmarket offered “value for money” on non-race days

The taxpayer had already provided the AC with offices for “meetings with staff and clients”. And fancy offices too, rather like Kubla Khan’s stately pleasure dome. I remember the last time I was there being taken out to view the private sun terrace.

They carried on as if they were a profit-making company with more than usually indulgent shareholders. And they allowed similar standards of taking the piss throughout the parts of the public sector they were supposed to rein in.

An interesting insight into the right wing mindset. If a lie is exposed by someone known to be left wing, that lie is automatically transformed into the truth. Because of course only left wing people let their politics warp their sense of truth and falsehood. Right wingers are completely free of such distorting prejudices. Whatever they say it is automatically true.

It is quite true that the Newmarket racecourse can be hired at low cost in the periods when it is not being used for races. I went there last year for an event and the charge (for a 24-hour event) was five guineas.
In this context the spending by the Audit Commission was not just ridiculously excessive but incredible to anyone who actually works for their living and could only be deemed reasonable by the husband of Polly Toynbee who thinks that depriving higher rate taxpayers of child benefit is an attack on the poor.

@flowerpower

It’s not nitpicking is it? A “Press Officer” is someone whose job it is to manage the relationships between an organisation and the press. There are 2 of these at the Audit Commission. There are 46 other staff in the Communications division at the Audit Commission with other roles, such as doing the legwork involved in publishing Audit Commission reports, creating web content and facilitating access and so on.

I’m certainly not rejoicing about my local council being forced to pay more money to the oligopolistic private sector audit industry than they do to the Audit Commission to reward them for supporting the Tory’s election campaign and to satisfy ideological “public sector bad” urges that Tories have. I’m also not rejoicing about the lack of transparency that will be caused by the ending of the Audit Commission’s research and statistic gathering functions, and the additional effort I will have to go to in my job to collate these myself.

As for Newmarket, the Audit Commission’s closest offices to Newmarket are in Stevenage, 42 miles away http://www.audit-commission.gov.uk/aboutus/contactus/Pages/ouroffices.aspx. The event was for a many people located throughout the Eastern region. I don’t know if Audit Commission Stevenage have conference facilities suitable for 50-100 people, but even if they did I doubt the value for money solution would be for Audit Commission to make everybody attending travel 4 additional hours to get to Stevenage and back and to meet their travel cost (50 people there and back on the train in 2nd class is £1,000).

@ sevellista
(i) did it take you 1 hour and 42 minutes to type that?
(ii) my major client reckons that “the legwork involved in publishing Audit Commission reports, creating web content and facilitating access and so on.” is a part-time job for one person. She thinks that chatting up potential clients (I am neither young, blonde, nor pretty so they hired someone who was – as well as being intelligent and competent – to double up that job with handling communications) is the major part of her job and the website part is a fairly small minority.
(iii) the private sector is not oligopolistic and if your LA hires one of the “big 4″ instead of a local firm that will charge far less than the Audit Commission then email Eric Pickles to complain
(iv) Yeah so everyone who attended a conference would first go to Newmarket and then buy a ticket to Stevenage instead of going directly to Stevenage?
That comment is so blatantly suggestio falsi that everyone with an IQ in excess of their shoe size will be distracted by it
The question is whether the New Labour appointees at the Audit Commission willfully squandered taxpayers money: the unequivocal answer has to be Yes.

@john77

1. No. About 10 minutes.

2. I don’t know the job roles of everyone in the Audit Commission – only that 46 out of 48 are not press officers, as the Government and commenters here will have us believe. The Audit Commission are responsible
for auditing hundreds of organisations, so I imagine publishing those
reports takes several people (I don’t work in publishing so I don’t know how many but would guess at least 10 full-time) and there are several other functions one would expect a Communications division to produce.

3. The last report commissioned by the Government concluded that “the audit market in the UK is highly and persistently concentrated” with the “Big 4″ having 99% of all FTSE 350 fees, very little competition and accompanying high audit fees. It would seem likely that organisations of the size of local authorities would have little choice but to use one of the big 4 as there are few alternatives with the capacity to do the auditing work required http://www.oxera.com/cmsDocuments/Reports/DTI%20Auditors%20executive%20summary.pdf. The cost to the public purse will be higher than the low cost of the Audit Commission – and with far higher expenses (but I’m sure trebling publicly-funded expenses through using private sector auditors is no problem for you, due to the fact the private sector cannot waste money by definition)

4. No, but Newmarket would have been chosen for the conference as being close to where the participants were coming from and having a cheap
facility to hold the event at (the race course). Forcing everyone to travel 40+ miles
to Stevenage would have been incredibly wasteful in terms of time lost and financial outlay for travel costs, and would likely have cost the Audit Commission more than what they did.

As for your last paragraph, I am yet to see evidence that either Audit Commission
staff were politically-motivated appointees or that the Audit Commission wasted public money – the “evidence” of this Pickles provided is weak and does not stand up to scrutiny.

@Sevellista
That means that you either chose not to read my previous post or you are choosing to lie – there is no third option
Who do you expect to believe that the Audit Commission needs 46 people to explain its role to local authorities ?
It is just a coincidence that a guy who could not get a job in the private sector and is married to one of Gordon Brown’s millionaire journalist supporters was awarded the press relations job? Was it on merit or to purchase the support of the Guardian?
A 2006 report on auditing of multinational companies is not the best guide to how to audit local authorities and government departments in 2010.
What scrutiny? – a cheap and baseless sneer

@john77

You are the one who seems to misunderstand the role of the Communications Division – it is not merely “to explain the role of the Audit Commission to local authorities” but to manage and deliver all the organisation’s communications with Parliament, member’s of the public, auditing professionals, it’s local authority and NHS clients and so on.

Where is your evidence that the Communications Director could a) not get a job in the private sector; b) was appointed due to his relationship with a left-leaning journalist? And his wife was trying to organise a coup against Brown for the last 2 years of his time as PM, so hardly a supporter.

The auditing industry in the UK is clearly uncompetitive and oligopolistic beyond the smallest scale firms – you are deluded if you believe otherwise.

And the Government’s smears on the Audit Commission are shown to be baseless smears here http://www.audit-commission.gov.uk/pressoffice/pressreleases/Pages/lettertoericpickles.aspx

(With more detail of Newmarket – 3 days conference facilities for 90
staff of Local Authorities and NHS Trusts at £67/head. If it was at their offices in Stevenage it would have definitely been more expensive as the AC would have had to pick up £60 per head transport costs for three 100-mile+ long round trips to Stevenage for 90 people before even allowing for any costs of actually holding the conference)

Re 7. by Tim Fenton – have just read ‘The Pickles Papers’ online and what a fasninating inside they are into Eric Pickles. They really are a must-read for anyone who is in any doubt as to what the Tories are up to.

Really a must-read for anyone come to think of it lol.

@ Sevellista
“the role of the Communications Division” And that needs 46 full-time staff?
Pull the other leg, it has bells on
The Audit Commission has a job to do. The Communications side to explain it should require one part-time officer: who wants to hear about what it does if it is doing its job properly
Your last comment is a stupidly blatant lie as I had previously said that transport to Stevenage did not involve going first to Newmarket and then buying a ticket from Newmarket to Stevenage.
The auditing profession in the UK IS competitive – just try asking an auditor outside the “big 4″
If you could do primary school standard arithmetic you would realise that £67 for three days was greater than 5 guineas per day.

@john77

The ‘Communications and Public Reports’ division clearly fulfilled many functions other than the relatively minor business of dealing with press enquiries – which only took 2 press officers. Without knowing the precise functions of these
or having benchmarks of other organisations it is difficult to comment on whether 46 full-time members of staff is efficient – doesn’t sound extravagent to me at first glance though.

I have said nothing about staff travelling from Newmarket – merely that Newmarket would have been chosen for convenience and it is sensible to assume it is fairly close to and central for the LAs and NHS Trust staff involved in it and a good benchmark for ‘average distance from Stevenage’ (and Pickles was saying this was a ‘day at the races’ staff jolly in any case – clearly a big lie as you seem to be conceding).

I don’t understand what your evidence is for saying auditing is competitive- concentration ratios of the industry and studies into firm and consumer behaviour within it (as I have linked to) shouts oligopoly.

Shutting the Audit Commission has nothing to do with value-for-money – Pickles best examples of “waste” he could come
up with do not stand up to any kind of scrutiny and neither does
he have any evidence to stand up his claims of savings

17. John77

The auditing profession in the UK IS competitive

Wishful thinking I’m afraid.

The audit market is anything but “competitive”.

@ 18 and 19
I do actually know some accountants and some Finance Directors. There is competition between the very large number of smaller firms for work in the UK. Local authorities do not have foreign subsidiaries so they are not limited to use the “Big 4″

@john77

Most LAs and NHS Trusts are large organisations – for example, Surrey County Council spends over £1.6 billion – the average organisation the Audit Commission audits spends £18 million. The competition in small-firm audit is meaningless in this new market. Unsubstantiated anecdata from “I know some finance directors who say it is ok” is unconvincing in the face of independent studies and statistical facts.

@ 11

It’s not nit-picking is it?

Yes it is. Where I work there’s a room where a number of people with different titles – press officer, public relations manager, public affairs manager, web editor – sit. On paper it is the Communications & External Affairs Department, but everyone calls it the Press Office. Although only one of them is designated “press officer”, when there’s a press event in the building ALL of them wear a badge with “Media Relations” on it.

The minister’s remark about 48 press officers was intended to imply that the AC wasted money on bigging itself up. Whether the people doing that were labeled “press officer” or “communications officer” is irrelevant and all you’re doing is trying to make a distinction without a difference.

@ Sevillista
That there are a handful of very large local authorities does not stop them being local not multi-national.
It is abuse of statistics to portray the average as typical when the arithmetical average is distorted by including Surrey which is over 900 times as large. The large majority must be smaller than the average.
Now some real statistical data
There are 8088 private firms of registered auditors. The salary range for an auditor is £24-40k, that for a non-equity partner is £42-116k. The Executive Chairman of a quoted audit firm is paid £200,000. The Audit Commission charges out a “Partner”‘s time at £325-380/hour, equivalent to more than £600,000 pa and a Senior Auditor (two rungs down from a “Partner”) at around £1,000 per day. That is more than twice the average fee level (obtained by dividing annual revenue by weighted average number of fee-earners) charged by a leading private company.

That Audit Commission number does look large though. I’ve worked as a press officer (as many know) and we ran an entire national election campaign on three peeps and an intern.

Came second nationally, too, so we can’t have done that bad a job.

48 people really does sound pretty bloody large (as does £100 k a year for the bloke at the top).

@ 23
Should read 90 not 900 – I failed to proof-read

@ 24

as does £100 k a year for the bloke at the top

…. Walker was getting £120 k basic plus £40k pension contributions, according to the annual report.

So the La Toynbee household was on £250 large plus pensions (and private health care from The Guardian would you believe) plus book royalties and freelance work (Polly did at least one £7 k project for Red Ken)?

@flowerpower

But the 46 staff were not employed to “big the AC up” but to fulfil core functions like communicating with stakeholders via websites, to publish and disseminate reports and so on.

I don’t know why you assume that someone in the ‘Communications and Public Reports” section must be in a press officer like role. It’s rather like assuming everyone employed by Liverpool Football Club is a footballer or everyone employed by a GP surgery is a GP.

@john77

I don’t doubt small-scale auditors for small businesses exist. But the question is will the small-scale auditors pick up AC client business – as most LA clients turnover >£10 million and LAs turnover far in excess of that I don’t think so. Where is the evidence that the Big 4 won’t carve-up this new market between theselves?

@Timworstall

You are making the mistake of assuming it is solely a press office when this is a minority pursuit in the division, with most fulfilling core AC business functions.

@ 28 Sevillista
Are you paranoid about the “Big 4″ accountants? There are a dozen second-tier firms and dozens of medium-sized firms that would have no trouble in tackling a company or local authority with turnover of £10-100m. The “Big 4″ would only be able to divide the LA market between them if they underbid not only the medium- and large-sized national firms but also the local firms. In that case they would need to charge a fraction of Audit Commission prices.
You “don’t doubt small-scale auditors for small businesses exist.” which implies that you don’t actually know any of them BUT you nevertheless feel able to deny the existence of competition on the grounds that the “Big 4″ dominate the auditing of FTSE-100 companies! Most FTSE-100 companies turnover is in the tens of £billions rather than tens of £millions. If a UK-centric company has turnover in the low tens of millions it is very unlikely to be audited by one of the “Big 4″ and may not be among the 1000 largest companies by market capitalisation, so assuming that the market for auditing multi-billion companies in the FTSE-100 with a global spread of operations is the same as that for auditing local authorities is equivalent to assuming that Tranmere Rovers’ wages should be the same as Manchester United’s.

@john77

What is paranoid about asking the same questions that experts within the auditing profession themselves are asking?

The trade-press certainly seems to think there is a strong possibility of a Big 4 carve-up of this new market
 
http://www.accountancyage.com/accountancyage/news/2268387/firms-eye-audit-commission-work

Is Pickles going to perhaps release a study of the likely impact of this decision, evidence on who is likely to supply services in the new market or the advice his civil servants gave him on the subject? I wonder why not if it is as good for VFM as he asserts.

This also seems consistent with the Big 4 firms being so generous to the Conservative party prior to the election (though this is ideological, so I’m sure any reward is more about cementing political will than anything else)

http://www.taxresearch.org.uk/Blog/2010/08/17/who-gains-from-the-closure-of-the-audit-commission-and-why

The Government’s approach also seems very inconsistent – at the same time
Philip Green is berating the previous Government for not centralising procurement enough to take advantage of monopsony power to bully suppliers, the Government is abolishing the central buying power of the Audit Commission and decentralising to 11,000 bodies, which in Green’s world surely gets a big black mark. 

Sevillista @ 28

…to fulfil core functions like communicating with stakeholders

Communicating is not a “core function” of the AC. It’s core function is to audit the accounts of local authorities and NHS trusts. Unlike public-facing bodies, there is very little need for the AC to do anything else to satisfy transparency and accountability requirements than have a website from which PDFs can be downloaded.

don’t know why you assume that someone in the ‘Communications and Public Reports” section must be in a press officer like role.

I don’t why you assume that someone like David Walker, who has spent most of his career at the Guardian, the Indy and the BBC was being paid £160k per annum to do anything other than focus on media coverage.

@ 30 Sevillista
The accountancy age article looks like so many others written when an editor has two empty pages to fill – oh let’s invent something to worry about: it takes one quote from a chat out of context and builds an edifice of cards. Did you notice it switches between big 4 and top 12 and between the “Big 4″ lowballing and charging premium prices.
You have shown that you understand monopsony but then say that abolishing the Audit Commission’s monopoly flies against Green’s recommendation to use purchasing power when it obviously does not. It GIVES purchasing power to the local authorities who can now seek competitive tenders for the work.
If the “Big 4″ did low ball then that would reduce audit costs by well over 50% compared to the Audit Commission fee scale (allowing for 1 support staff for every 3-4 fee earners, other overheads, and the local firm including a profit margin in its tender price that would still be less than half the AC scale fee, so a low ball would be much less than half).
The situation in the private sector suggests that the “Big 4″ prefer to charge high prices to international companies who need their global networks and to leave cheaper audits for domestic companies to the “smaller fry” in the profession. This only only circumstantial evidence for anyone making forecasts about public sector audit work, but as it is the only evidence it is rather more likely to be relevant than an ill-written page in a magazine.
There is no particular reason for the big accountancy firms to expect government contracts from the coalition (unlike Arthur Andersen who got a big contract from Brown as a reward for advising him to wreck DB Pension schemes as the first stealth tax). If government audit work was limited to them instead of being open to competition from the other Eight Thousand statutory auditors, one might well suspect a payback but it just is not.