Chairman defends axed agency that splashed out £40,000 on pot plants

The commission – on which the Government called time two weeks ago – has faced criticism for spending 8,000 on an event at Newmarket racecourse and more than 50,000 on lobbyists.

But Michael O'Higgins told the BBC there had been a "legitimate reason" for each item of expenditure.

He said the accusations of extravagance had angered its 2,000 staff, who knew "the value of the work" they had done.

The commission is responsible for monitoring the spending money by local councils and health organisations.

Mr O'Higgins said "a number of incorrect statements" had been made by the Government about its expenses, including the 8,000 allegedly spent on an event at Newmarket.

He said the commission had actually used the racecourse's conference facilities on three different occasions to run training courses for local government and health authority staff.

The chairman also defended spending 40,000 on pot plants – or 20 a week for 37 offices around the country – saying it was "not a large amount of money" to make a better working environment.

Mr O'Higgins said: "It's very easy to pick individual items out and hold them up to ridicule, but actually there is a sensible explanation for the expenditure that we incurred."

"The requirement is to be able to explain and justify why you have spent money, rather than say that any expenditure of any sort is automatically silly."

Communities Secretary Eric Pickles said the commission had "lost its way" and become a "creature of the Whitehall state" when he announced its disbandment.

Earlier in the year he also vetoed a 240,000 salary for its new chief executive.

Councils and other bodies covered by the commission will be free to appoint their own auditors, while the National Audit Office – the Whitehall spending watchdog – will oversee the audit regime.

Local Government Minister Bob Neill said the Audit Commission had been behaving like a "large corporate" body.

He said: "When you look at the overall cost of the Commission, I think Eric Pickles's comments are entirely justified."