The chairman of England's local government spending watchdog, the Audit Commission, has rejected claims by the coalition government that he has overseen a regime of extravagance.

Talking to Today's reporter Andrew Hosken, the chairman Michael O'Higgins denies allegations by the Communities Secretary, Eric Pickles, that the Commission had "lost its way".

However, local government minister Bob Neill says that the Commission has been "behaving as a large corporate".

He also says that creating a competitive market would reduce costs. The government would save money if the tasks currently run by the Audit Commission were carried out in the private sector.

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