Chairman of the Audit Commission James Strachan is quitting. Deputy Sir Michael Lyons will become acting chairman on 24 January next year.
Strachan has “decided not to take up my offer of reappointment” said deputy prime minister John Prescott.
A search for a new permanent chairman has begun.
Lyons is currently leading an inquiry into the role and finances of local government.
Last week (15 December) the commission published its annual assessment of council performance in England.
On delivering good value for money Strachan said he was concerned that “half of all councils are only achieving at or below what we consider to be the minimum acceptable level."