In evidence on behalf of 1,300 commission staff to the communities and local government select committee inquiry, the union says the Commission should continue as a public sector body.

The next best option would be to create a mutual company employing former Commission staff.

"This would provide local government with a genuine choice in a market that is likely to be dominated by a handful of auditors," said Prospect deputy general secretary Dai Hudd.

He pointed out that the Commission could maintain its core current functions and save £75m – more than the £50m the government claimed it would save by abolishing the Commission.

"There are still no detailed breakdowns of the projected cost savings of abolition in the public domain. This prevents any real discussion or challenge to the government's claims," he added.

"Instead we have spurious written questions about how much the Commission spends on office chairs.

"Given that the Commission audits £200 billion spent by 11,000 bodies in local government, health, housing, community safety and fire and rescue services, it seems obvious that these questions were planted to distract from the real story – what is likely to be a highly critical select committee inquiry into the inspection and audit of local authorities."

In the committee's latest evidence session, held on February 7, the Association of Chartered Certified Accountants said the "brutal" abolition of the Commission "creates suspicions of score-settling and lobbying".

Another expert said the appointment of auditors needs to be independent not only of the local authority or health body being audited, but from government and politicians "who will pursue private interests as well as advance the public interest".

There are also few details on potential liabilities, which Prospect estimates at over £170m. "It is not clear if ministers were provided with all the relevant facts before decisions were made," said Hudd.