Nolan scraps town hall surcharging
District auditors to lose power to surcharge local authoritycouncillors.
District auditors will be stripped of their power to surcharge local authority councillors following proposals in the Nolan committee report on local government.
Lord Nolan said he wanted to replace the controversial surcharging rule with a new offence of Misuse of Public Office as part of a restructuring of standards and discipline for councillors and officers. The government is almost certain to accept the proposals.
The report said surcharging was inconsistent. It was limited to incidents that caused a council to lose money and excluded misconduct that might be serious but not lead to any financial loss.
It added that councillors were singled out for punishment of misconduct which is serious, but which does not involve corruption. ‘There is no comparable regime applying to the rest of the public sector,’ the report said.
The decision was welcomed by the Audit Commission and public sector accountants body CIPFA, which have lobbied for the rule to be scrapped.
The Audit Commission has been concerned that district auditors act as investigator, prosecutor, judge and jury – a situation highlighted by Deloitte & Touche partner John Magill’s decision to surcharge former Westminster council leader Dame Shirley Porter (UK P)21.25m over the ‘homes-for-votes’ scandal. He took the decision after an investigation lasting seven years.
Andrew Foster, controller of the Audit Commission, agreed the courts should be involved at a much earlier stage. ‘Courts are free to apply discretion in ways which auditors are not, so the changes would result in a process which would be perceived to be fairer,’ he said.
Nolan also said local councils should draft rules to protect whistleblowers.
‘This would enable concerns to be raised confidentially inside and, if necessary, outside the organisation.’ He recognised the extent of outsourcing under the last government’s compulsory competitive tendering policy when he added that staff of contracting organisations should have access to the local authority’s whistleblowing procedures.
