Audit Commission awards new contracts for audit services

The Audit Commission Board has announced savings of £26 million of public money over five years, against the cost of rolling forward existing contracts, after a rigorous tendering exercise of its outsourced audit work.

New audit contracts with a total projected value of £29 million a year have been awarded to four firms: Deloitte, KPMG, PKF and RSM Robson Rhodes. This represents 20 per cent of the Audit Commission’s projected audit work in 2007/08. The contracts will be for a period of five years, starting in April 2007. 

The Commission has also agreed that it will seek to outsource up to a further £13 million (or 10 per cent) of its projected audit work in 2008/09 with a view to realising further savings. This would broadly maintain the current level of 30 per cent of the Commission’s audit work that is outsourced to private firms.

Sir Michael Lyons, Acting Chairman of the Audit Commission said: 'Our tendering process will enable us to deliver substantial savings for the taxpayer, while maintaining high-quality services for audited bodies. It also demonstrates our ongoing commitment to promoting a competitive public sector audit market.'

Steve Bundred, Chief Executive of the Audit Commission said: 'This has been a major exercise for the Audit Commission conducted in accordance with EU procurement rules. Our aim was to maintain quality, while using price competition to drive down cost.

'We now aim to achieve further savings and will seek to let contracts for up to a further £13 million of our work from April 2008.'

The procurement exercise has been carried out in the context of a reduction in the size of the Commission’s audit market, as a result of the current restructuring in the NHS and the migration of NHS acute trusts to foundation trust status.

Ends

Press release issued: July 25 2006