Department for Communities and Local Government
Council Conduct & Constitution Team
Zone 3 J/1
Eland House
Bressenden Place
London SW1E 5DU / Tel 0303 444 4166
Email

8 October 2010

Mr Raheel Mustafa
Via email
/ Our Ref:F0004003
Your Ref:

Dear Mr Mustafa,

Freedom of Information Act Request - Audit Commission

I am writing in response to your request for information about the disbanding of the Audit Commission. Your request has been considered under the Freedom of Information Act 2000.

The Department has not produced a statement of full costs and savings, nor do we yet have detailed costs relating to all of the matters that you specified in your request. Many of these costs will depend on the model that is adopted for moving the Audit Commission’s audit practice into the private sector. Decisions on this matter will be taken once the Department has considered the options available, in consultation with the Commission, the profession, local government and health bodies. We will produce an impact assessment before introducing the legislation that will underpin the new local audit framework and this will be available at the CLG website at

However, I can confirm that Communities and Local Government does hold some of the information that you have requested. I am able to provide you with a presentation (with redactions) given by officials to Irene Lucas, the Department’s Acting Permanent Secretary, on 23 July 2010. This presentation set out our proposed approach to localising audit and the supporting rationale. I have also included a draft of a set of Question and Answers for use by the department’s Press Office on the day of the announcement. This document includes a set of Questions and Answers on costs at Part C. I am also able to provide you with a letter from Eugene Sullivan, Chief Executive of the Audit Commission to Irene Lucas, dated 17 August 2010. Information about the Commission’s liabilities can also be found in its annual report at:

I wish to advise you however that some of the information included in the presentation is exempt from the right of access under the FOI Act by reason of sections 36(2)(a), 36(2)(c) and 43(2). The full text of sections 36 and 43 is attached in the Annex to this letter. The redacted text is from slides 3, 7 and 10 of the presentation.

Section 36(2)(a) provides that:

(2) Information to which this section applies is exempt information if, in the reasonable opinion of a qualified person, disclosure of the information under this Act –

(a) would, or would be likely to prejudice –

(i) the maintenance of the convention of collective responsibility of Ministers of the Crown.

The first block of text that has been redacted on slide 7 of the presentation set out different Ministers’ views to the options surrounding the Audit Commission. The qualified person in this instance was a Minister in the Department, who took the view that the exemption was engaged.

In applying the public interest test, we considered that there is a public interest in policy making being open, leading to increased trust and engagement between citizens and government. The decision to disband the Audit Commission is obviously a matter of public importance and public debate as to the options is valuable.

However, the different policy options have been made public, and the redacted information relates to Ministerial discussions on the options. While there is some public interest in knowing this information, Maintaining the convention of collective responsibility is fundamental to the continued effectiveness of Cabinet government, as Ministers should be able to discuss the different options and their pros and cons in private, but maintain a united front once the final decision is made. Revealing the information could encourage the exploitation of differences of opinion for political or personal purposes and result in greater constraints on Ministers in putting forward their views, to the detriment of properly discussed and informed decision-making. On balance, we consider that the public interest in maintaining the convention of collective responsibility outweighs the public interest in disclosure of the information redacted.

We further consider that, in the alternative, the exemption in section 35(1)(b) relating to Ministerial communications, including proceedings of the Cabinet or any Cabinet committee, is engaged with respect to this information. A similar public interest balance would apply.

Section 36(2)(c) provides that:

(2) Information to which this sections is applies is exempt information if, in the reasonable opinion of a qualified person, disclosure of the information under this Act –

(c) would otherwise prejudice, or would be likely otherwise to prejudice, the effective conduct of public affairs.

The block of text redacted on page 10 concerns the management of our relationship with stakeholders. The qualified person in this instance was a Minister in the Department, who took the view that the exemption was engaged.

The public interest in disclosure is in transparency of government’s dealing with stakeholders, however we consider that the information could potentially prejudice our relationship with key stakeholders that are crucial to the successful and effective delivery of this policy. Therefore overall the balance of the public interest lies in withholding this information.

Section 43(2) provides that

(2) Information is exempt information if its disclosure under this Act would, or would be likely to, prejudice the commercial interests of any person (including the public authority holding it).

All the remaining redacted text is covered by this exemption. There is a public interest in the disclosure of commercial information to ensure that there is transparency in the accountability of public funds, and that departments’ commercial activities are conducted in an open and honest way. However, as we intend to put the Audit Commission’s audit practice into private ownership, there is a legitimate public interest in preserving the value of this asset. Releasing incomplete, or unverified financial information would be detrimental at this stage, and releasing information about what price the department might expect would adversely affect its bargaining power during negotiations for the transfer of ownership. Overall, we consider that the public interest in preserving the value of the Audit Commission audit practice outweighs the public interest in disclosure of the figures redacted.

Communities and Local Government as an organisation aims to be as helpful as possible in the way it deals with requests for information under the Freedom of Information Act 2000 and the Environmental Information Regulations 2004. If, however, you are not satisfied with the way in which your request has been handled or the outcome, you may request an internal review within two calendar months of the date of this letter. Information about the Department's review procedures and how to apply for an internal review of your case can be found on the Department's website at This also explains your right to apply directly to the Information Commissioner for a decision in the event that you remain dissatisfied following the review.

If you have any queries about this letter, please contact me. Please remember to quote the reference number above in any future communications.

Yours faithfully,

Mark Coram