The Audit Commission for Local Authorities in England and Wales (the Commission) was established on 21 January 1983 by the Local Government Finance Act 1982. The Commission is a public corporation and began operations on 1 April 1983.
On 1 October 1990 the Commission assumed responsibility for the external audit of the National Health Service and its name was changed to the Audit Commission for Local Authorities and the National Health Service in England and Wales. A consolidating Act, the Audit Commission Act 1998, was given Royal Assent in June 1998 bringing the earlier statutory provisions together into one document.
The Public Audit ( Wales) Act 2004 created a single audit office in Wales as from 1 April 2005, by transferring the office of the Audit Commission in Wales to that of the Welsh Auditor General. The words ‘and Wales’ were removed from the Commission’s name in 2008 under the Local Government and Public Involvement in Health Act 2007.
Since 1998, a number of important amendments to the Commission’s functions have been made by various statutes. Under the Local Government Act 1999 local authorities were given a new duty to make arrangements ‘to secure continuous improvement in the way in which their functions are exercised, having regard to a combination of economy, efficiency and effectiveness.’ The Commission was given a power to carry out an inspection of an authority’s performance of its functions, including inspection of its compliance with this duty.
The Local Government Act 2003 gave the Commission power to inspect registered social landlords, as well as placing Comprehensive Performance Assessment on a statutory footing. The Health and Social Care (Community Health and Standards) Act 2003 provided that a Foundation Trust can appoint as its auditor an employee of the Audit Commission, and also transferred certain functions relating to social services to the Commission for Social Care Inspection. The Fire and Rescue Services Act 2004 extended the Commission’s inspection function to the inspection of fire and rescue authorities’ compliance with the Secretary of State’s Fire and Rescue National Framework.
In 2008 the Local Government and Public Involvement in Health Act 2007 altered the Commission’s structure, made various changes and extensions to its powers, including a new power to advise and assist public bodies, and a new power to undertake Comprehensive Area Assessment. New powers were also conferred on the Commission by the Serious Crime Act 2007 on 6 April 2008 allowing data matching by the Commission.
On 1 April 2009 Comprehensive Area Assessment was introduced.