Local councils in Scotland and England are not in the best financial position at the moment.
The Scottish local councils are £20 billion in debt, an increase of 11 per cent on the previous year, and the situation is far worse across the border, where many councils are either bankrupt or heading that way.
While the Scottish local councils are managing the situation to an extent, at least in the sense that their auditors are not publicly ringing alarm bells, the English local councils have collapsed into chaos.
A lack of effective audits is being blamed and if it can have this big an impact on councils, then what could a lack of audits mean for your business?
Why are the councils struggling and could audits help?
As you might imagine from your own rising bills, operating a local council is not cheap.
There are many financial factors that are driving the increased debt, but a key difference between the chaos of England and the mild concern of Scotland does seem to be the presence of audits.
In England, the council spending watchdog was abolished by David Cameron and this resulted in a lack of unified auditing standards in the country.
Unsurprisingly, this has resulted in a decline in effective audits with some reports suggesting that only one per cent of audits were delivered on time in 2022-2023.
Without effective, timely audits, the English councils have been unable to keep track of their spending – a situation that is only set to get worse as deferred bills surrounding SEND are due to hit soon.
By contrast, auditors in Scotland are already advocating for local councils to rethink their strategies to better brace for economic hardship.
They believe that smarter investment and sustainable planning could be the key to keeping the councils going.
How does this impact businesses?
Very rarely do we get a clear side-by-side comparison of the impact that audits can have.
If your business falls below the mandatory auditing threshold, then you are left with the choice of whether you want to be like the English councils or the Scottish ones.
Both are facing increased economic pressures, but the auditors in Scotland are working to guide the councils towards better practices to help ensure they do not go bankrupt.
Remember, local councils have the benefit of being bailed out by central Government if things get rough which is a safety net that your business does not have.
That is why it is important to not only get an audit, but get an audit you can trust.
We are committed to upholding the community spirit everywhere that we operate, and we take the time to get to know the businesses we audit.
We do not just see your business as a list of numbers on a spreadsheet, as we prefer to see the human and community value of the work you do.
However, this does not mean that we are a soft touch when it comes to audits.
We are thorough in our approach and unflinching in our reports because we believe it is better to read an uncomfortable report now than have to deal with financial problems later.
If you have not had an audit yet, or you want to find out why so many businesses trust us to audit them, then be sure to get in touch to find out how we can help you.
