This study examines the approach taken by the Thatcher government and its allies to the creation in 1984 of the UK's Supreme Audit Institution, the National Audit Office (NAO). It links this approach to negative liberty that contrasts to an alternative view, promoted by Thatcher's opponents in this debate, which focussed on the audit office as the guardian of neo-Roman liberty.
The issue of how we understand independence in audit institutions needs to be addressed. Independence has been addressed before, but often as a constitutional safeguard against the power of overmighty governments. This paper demonstrates a very different argument for audit independence which sees independence from democratic control as a vital barrier to the abuse of the rights of minorities by majorities.
The study shows how some politicians and officials supported audit reform in the 1980s in the UK as a mechanism to secure negative liberty. This contrasts with previous research that stressed the support of the founders of the NAO for neo-Roman liberty. Consequently, it is suggested that audit reform in the UK was the product of a compromise between politicians who believed in different and incompatible concepts of audit based on different and incompatible concepts of liberty.
The concept of negative liberty extends the previous literature on liberty, its relationship to accountability, audit and accounting and has implications for how we see the neo-liberal origins of audit and New Public Management more generally.
The study has implications for public sector auditors and their awareness of the values which underpin their work. It demonstrates that while public sector audit can be non-partisan, it cannot be neutral between different values.
To the best of the authors’ knowledge, this study is the first to consider the relationship between public sector audit and negative liberty.
