DCLG ministers set an ‘insanely ambitious' deadline for scrapping the Audit Commission – which might have to be resurrected in some form by the next Government – an influential Whitehall think tank has warned.

In a study entitled Dying to improve, which details how the Audit Commission came
to be abolished, the Institute for Government (IFG) claims communities secretary Eric
Pickles acted precipitately when announcing his intention to axe the Audit Commission in August 2010 – months ahead of the coalition's wider cull of quangos.

Co-written by public policy expert Nicholas Timmins, the study claims any incoming government would have significantly reformed the Commission after the 2010 general election, especially given the unpopularity its improvement role had aroused across local government.

But news the Commission, which employed around 2,000 staff and received £200m annual funding, would be entirely abolished ‘came out of the blue'.

Concerns over the level of salary paid to Steve Bundred's successor as Commission chief executive proved a pivotal factor determining the early timing of the decision to close the organisation.

These concerns were first raised by the Labour communities secretary John Denham before the 2010 polls, when Gordon Brown's ‘Smarter Government' agenda determined all public sector salaries above £150,000 would require prior approval from the Treasury.

This impasse continued following Eric Pickles' appointment as communities secretary in May 2010, when the coalition insisted the salary of the prime minister – who took
a nominal £50,000 pay cut on assuming office – of £142,500 should be the benchmark for senior salaries.

‘It is not hard to avoid the charge that at least one element of the timing was a degree of pique – the row over the chief executive's pay was the final straw, and to hell with them,' the report stated.

Former local government minister, Bob Neill, denied Mr Pickles acted out of pique. ‘I
think probably that was the straw that broke the camel's back,' Mr Neill said.

‘The camel's back was probably broken anyway.'

‘But if there was any doubt, that finished it off. It was a serious tactical error. It was a complete failure to read the runes,' Mr Neill added.

The report contrasted the haste in making the announcement with the actual closure of the Commission, which officially winds down at the end of March 2015 – three years later than first scheduled and nearly five years after first mooted.

The IFG report says the privatisation of the Commission's in-house practice accounts for the bulk of the £1.2bn savings coalition ministers have hailed as arising from the development of local audit arrangements.

‘The timetable for the Commission's abolition has proved insanely ambitious. In practice most, if not all of the Commission's functions will continue, though scattered, probably less effectively,' the report stated.

The IFG authors concluded: ‘In one form or another, and doubtless under a different banner, a commissioner for audit to cover at least three roles – a guarantee of independent audit, standardisation of data and oversight function – needs to be reinvented.'

Report author Nicholas Timmins, who is a senior fellow at the IFG said: ‘Once the Commission is abolished an interim body will be formed for two years that will broadly continue the current audit arrangements.'

‘So there remains a chance that a genuinely independent audit function could arise like a phoenix from the ashes of the Commission,' Mr Timmins added.

In response, local government minister, Brandon Lewis, said: ‘The decision to abolish the Audit Commission was because it was a wasteful, ineffective and undemocratic. What should have been a voice for taxpayers became a creature of the central state.'