Audit and financial reporting under austerity localism—the case of the Birmingham City Council ‘bankruptcy’

Abstract

Accountability and value-for-money arrangements in English local government were severely eroded during the coalition government (2010–2015) and subsequent austerity era, under ‘austerity localism’. Meanwhile, the adoption of IFRS in 2011 seems to have done little to address the opacity of local government accounts. This article explores the shortcomings of the austerity localism model as an iteration of New Public Management (NPM) reforms in recent times via the ‘extreme case’ of the Birmingham City Council ‘bankruptcy’. The case exposes the contradictions of the austerity localism model as the reforms undermine transparency and public accountability, creating a system that is perhaps less transparent than ever before. As such, the article contributes to our empirical understanding of NPM under austerity, and to our understanding of the role of accounting standards and audit practices in the NPM agenda.