Debate: Response to ‘Studying the regulatory space of public sector audit—the historical turn’ and the need for local government accounting history

Abstract

Local governments play a vital role in managing and delivering services that directly impact the lives of citizens. In order to ensure that the allocation of public funds is delivering value for money and local governments are held to account for their decisions, the system requires good, audited accounting information. In the UK, however, local government audit is in crisis and is ‘hampering efforts to ensure that the billions of pounds per year spent by councils is properly accounted’ for (UK Parliament, Citation2023). As of 2025, the picture is no better. For example, the City of Birmingham, Europe’s largest local authority, remains technically bankrupt (Brackley, Citation2025) and, in 2024, the UK’s National Audit Office (NAO) was unable to obtain sufficient evidence from local governments to contribute to the UK’s Whole of Government Accounts for the financial year ending 31 March 2023 (HM Treasury, Citation2024). This resulted in a disclaimed audit opinion—an outcome the NAO described as unprecedented. Given that some form of UK local government audit has existed for centuries, with a more formalized system in place since the 1800s (Chandler, Citation2007; Dewar & Funnell, Citation2016; Midgley et al., Citation2024), these developments raise important historical and institutional questions. While Ferry et al. (Citation2025) note that researchers have long identified issues with UK local government audit and advocate for historical analysis to deepen our understanding of public sector institutions, we argue this historical lens should extend beyond audit. Local government financial management also includes accounting practices—for example financial reporting, budgeting, and management accounting—which shape governance and decision-making. The evolution of these practices over time has influenced today’s challenges in transparency, accountability, and financial sustainability. Therefore, we support the call in Public Money & Management by Ferry et al. (Citation2025) for a historical turn, but suggest expanding it to encompass the broader financial and management accounting practices of local governments. A more comprehensive historical perspective could yield deeper insights into the systemic issues facing local government management today