The Audit Commission claims it has cut fees for certifying grants to councils by one-third in the past five years.

The commission checks £43bn in grants annually, including housing and council tax benefit subsidies from the Department of Work and Pensions, to cash for regeneration schemes from the European Development Fund and Communities and Local Government.

The commission pledged to cut annual fees by 20-25%, but has surpassed its expectations. Instead, it has cut fees by 36% since 2003, from £30.7m to £19.6m, and cut the number of grants which needed to be certified by 70%.

In 2004, the commission identified £530m in errors – mostly to the detriment of local government. It clawed back £381m of overpaid grants, and paid back £149m in underpaid money.

Chief executive of the commission, Steve Bundred, said: ‘We will go on talking to government departments and bodies paying grants about arrangements.

‘Taxpayers must be assured that while certification arrangements are proportionate, they are protecting the public purse.'

The Audit Commission plans to:

The report is available at: www.audit-commission.gov.uk/claimsandreturns