The Audit Commission has revealed plans to hike its audit fees in what is likely to be a bitter blow to struggling council finance departments.

Some charges for use of resources could rise by up to one- third over the next three years under a consultation document put out by the Audit Commission.

The price hikes come as councils face a tight budget and increasing pressure to cut costs. It is also at a time when the commission is talking about reducing the burden of inspection on local authorities.

Under the plans, district councils will be hardest hit, with fees rising one-third over three years, up from an average £105,00 to £140,000. London boroughs will see their fees soar from £380,000 to £463,000 by 2010/11.

The £83,000 rise will swallow up most of the £100,000 savings on CPA corporate assessments, thereby cancelling out financial benefit of a lighter touch inspection regime.

The commission has put the blame for the rise on the Government. In the consultation, the commission says it was the ‘very clear expectation' of the Government that it should expand its use of resources assessment.

In the Local Government White Paper, the Government had pledged to work with the Audit Commission ‘without expanding the cost and burden' of inspection.

Steve Dingle, finance manager at Harrow LBC told The MJ: ‘It's unfortunate that the commission is pushing up fees when we have severe pressure on our services.

‘Politicians are going to be faced with some very difficult choices over the next three years.' He said the council would already have to make cuts in services, in addition to the 3% efficiencies a year, just to make ends meet.

Mary Hawkins, president of the Society of District Council Treasurers, described the price hike as ‘unreasonable' and ‘disproportionate'. In her authority, Warwick DC, she estimated the rise would amount to a 0.5% rise in council tax.

‘And we've got a lot of other pressures to deal with,' she added.

A spokesperson for the Audit Commission defended the rise in costs, claiming the increase was due to changes to international accounting standards which were brought in after the Enron scandal, and also affect private firms.

‘The government has said local government has to be on the same footing.'

She also pointed out that the overall cost of inspection for local authorities would fall as the cost of CPA inspection would decrease.