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Contract areas announced for Audit Practice outsourcing

The Commission has yesterday formally launched the process for outsourcing the work of its Audit Practice. We have issued the Contract Notices for the procurement of audit services for principal bodies and limited assurance audits. The Contract Notices include the details of the contract areas or lots and are available on the Commission's website.

For the principal bodies' procurement, bids will be invited for ten contract lots in four geographical regions, as set out below:

Estimated lot size (£ million)
North East and North Yorkshire
Humberside and Yorkshire
West Midlands
East Midlands
London (North)
London (South), Surrey and Kent
South East
South West

Suppliers invited to tender will be free to bid for all lots available in all regions. However, only one lot will be awarded to any one supplier in any one region. This means that the maximum number of lots in total that any one supplier can win is four.

For limited assurance audits of small local public bodies, such as parish and town councils, there are 28 lots of £100,000, but these are not based on geographical areas. The lots are designed to give the Commission flexibility to appoint a supplier to a number of county areas. Suppliers invited to tender will be free to bid for up to a maximum of nine lots.

The Commission has also today published its procurement strategy which sets out the objectives of the two procurement exercises and how they will be carried out.

Notes to editors

1. In August 2010 the Secretary of State for Communities and Local Government announced plans to disband the Audit Commission (the Commission). At the same time, he indicated his intention to transfer the Commission's in-house Audit Practice (the Audit Practice) to the private sector, and in due course, to abolish the residual element of the Commission.

2. The Commission has worked closely with the Department for Communities and Local Government (DCLG) and their external advisors on developing and evaluating the options for achieving such a transfer.

3. Ministers have concluded that the option offering the best value for money, as well as being the quickest and, in their view, the most straightforward, is to outsource the 70 per cent of audits of principal bodies currently delivered by the Audit Practice from the 2012/13 audit year, by means of a public procurement exercise.

4. On 27 July 2011 the Permanent Secretary wrote to the Commission's Chief Executive asking the Commission to consider undertaking the necessary procurement exercise.

5. At its meeting on 28 July 2011, the Commission Board agreed to undertake the procurement exercise. Ministers announced the decision on the same day.

6. As the Commission's contracts for the provision of limited assurance audits at small local public bodies expire at the completion of the 2011/12 audits, a separate public procurement exercise will also be required covering all small local bodies' audits, including the 25 per cent of those audits delivered by the Audit Practice.

7. The Commission published the timetable for the procurement process on 15 August. Under this timetable, potential providers have until 7 October to submit their completed pre-qualification questionnaires.

For further information please contact:
Media Relations Manager, Audit Commission
Millbank Tower, London SW1P 4HQ

Direct line 0844 798 2135 / 0207 166 2135
24hr Press line 0844 798 2128 Mobile 07813 038132

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