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Government to set up new regulator for local audit, make audit committees compulsory for all local councils

The Government has unveiled plans to establish a new regulator, the Audit Reporting and Governance Authority (ARGA), “as the system leader for local audit within a new, simplified local audit framework”.

Confirmation of the move was contained in the government consultation response to the Redmond Review, which was published in September 2020.

Shadow arrangements for ARGA will start at the Financial Reporting Council (FRC) in September 2022. Neil Harris, a Key Audit Partner at EY, will join as the FRC’s first Director of Local Audit to start up a dedicated local audit unit.

The Government has also proposed to make audit committees compulsory for all local councils, with an independent member required. “This will create greater transparency and consistency across local bodies,” the Department for Levelling Up, Housing and Communities said.

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Local Government Minister Kemi Badenoch said: “Over the last two years, councils have acted as a lifeline, providing vital support to businesses and communities.

“A robust system of local audit is key to maintaining public confidence in local government through assuring transparency and accountability."

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