Abolishing the Audit Commission and the independent appointment of auditors will compromise the high standards of scrutiny required for local government, says Prospect. In evidence on behalf of 1,300 commission staff to the communities and local government select committee inquiry, the union says the Commission should continue as a public sector body. The next best option would be to create a mutual company employing former Commission staff.

"This would provide local government with a genuine choice in a market that is likely to be dominated by a handful of auditors," said Prospect deputy general secretary Dai Hudd.

He pointed out that the Commission could maintain its core current functions and save £75m - more than the £50m the government claimed it would save by abolishing the Commission.

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