The Ministry of Housing, Communities and Local Government has picked accountant and security expert Bill Butler as its preferred candidate to serve as chair of the new Local Audit Office.
Creating the LAO was a commitment in the Labour Pary’s manifesto for 2024’s general election and follows the long-running crisis in local-authority audit that has seen hundreds of councils fail to get their accounts subjected to external scrutiny within expected timescales.
Butler currently chairs Public Sector Audit Appointments Ltd, which is responsible for appointing external auditors to local authorities, police bodies and other public organisations. It is a not-for-profit company that was established by the Local Government Association in 2014.
His appointment is subject to a hearing with members of parliament’s Housing, Communities and Local Government Committee, which is due to take place on 16 June.
MHCLG said it expects Butler to “play a critical role” in the establishment of the LAO, “providing strategic leadership to ensure the delivery of its statutory responsibilities”.
Among its roles, the LAO is expected manage the procurement and appointment of external auditors for more than 600 public bodies in England, including local authorities, police forces, and fire authorities. It will also be responsible for overseeing the quality of inspection, supervision, and enforcement of local audits.
A central part of the LAO’s remit is acting as coordinator for local audit contracts, easing backlogs and promoting the timely publication of audited financial statements.
Local authorities are responsible for more than £100bn of spending every year. However, missing audit data from the sector has prompted the National Audit Office to disclaim the Whole of Government Accounts for the past two years. In December, HM Treasury permanent secretary James Bowler told MPs he expects the 2024-25 Whole of Government Accounts – due to be published this summer – to also be disclaimed because of missing data.
Local government minister Alison McGovern said Butler “brings a wealth of leadership experience from across the public and regulatory sectors” and is “exceptionally well placed” to chair the LAO at a pivotal moment.
“Bill’s expertise will be invaluable in helping to establish the new organisation and ensure it delivers from the outset,” she said.
Butler said he is “honoured” to have been nominated as preferred candidate to chair the LAO.
“The establishment of the office represents an important step in strengthening the local audit framework, restoring confidence, and securing proper stewardship of taxpayers’ money,” he said.
“If confirmed, my focus will be on working constructively with colleagues, stakeholders and the sector to establish a robust and effective organisation that discharges its statutory responsibilities and supports the recovery and long‑term resilience of the local audit system.”
MHCLG describes Butler as “an experienced public sector and regulatory leader with a career spanning senior executive and non-executive roles across national regulatory bodies, professional organisations and public governance”.
It said his background combines financial, regulatory and governance expertise, underpinned by professional qualifications in accountancy and security, and a long-standing career in public service and regulatory oversight.
Earlier in his career, Butler served as chief executive of the Security Industry Authority and held senior leadership roles at the Gambling Commission, the Healthcare Commission and the Audit Commission.
Some trace the crisis in local government audit back to the coalition government’s 2011 decision to scrap the Audit Commission. A 2023 report from the Institute for Government described the decision as an ideological one that was not based on evidence or an understanding of the regulatory system for local government audit.
Butler has also undertaken non-executive roles with organisations such as the Law Society and the Coventry and Warwickshire Integrated Care Board.
If his candidacy is endorsed by MPs he will be appointed for a five-year term as LAO chair.