The Audit Commission, which reviews local public services, is ramping up plans for an employee buy-out since being named as one of nearly 200 quangos facing abolition.
The commission is thought to have contacted the Employee Ownership Association and the Baxi Partnership to advise it on how it might structure and fund such a buy-out. The Baxi Partnership was recently selected by Cabinet Minister Francis Maude to be one of 12 mentors on the first wave of pathfinder mutuals, to be run by entrepreneurial public sector staff who want to control their services.
The Audit Commission's local government chief, Gareth Davies, is leading buy-out discussions and the watchdog's 900 employees are keen on the plans. However, other options, including third-party approaches, will also be considered. The commission is seen as a good prospect for a buy-out as it already wins independent audit work. It handles 40 per cent of audits for NHS foundation trusts, which it won in open competition.
A spokesman said: "Ministers have made clear their intention that the audit practice of the commission should continue and be transferred to the private sector. We are working hard to make that a reality."