Audit fee scale (November 2024)
PSAA has published the 2024/25 audit fee scale following consultation.
The fee scale applies for the audit work to be undertaken by appointed auditors in respect of the 2024/25 financial statements at relevant principal authorities that have opted into PSAA’s national auditor appointment arrangements for the period 2023/24 to 2027/28.
Auditors will undertake their work under the requirements of the Code of Audit Practice and supporting guidance published by the National Audit Office on behalf of the Comptroller and Auditor General, the financial reporting requirements set out in the Code of Practice on Local Authority Accounting published by CIPFA LASAAC, and the professional standards applicable to auditors’ work.
Under the Local Audit (Appointing Person) Regulations, the 2024/25 fee scale must be published before 1 December 2024 and cannot be amended after that date. Any subsequent changes in national requirements or local circumstances relating to the 2024/25 audits will be the subject of fee variations.
2024/25 directory of auditors and scale fees for opted-in bodies.
Consultation summary
PSAA has published the fee scale for 2024/25 audits, following consultation with bodies and other stakeholders.
We are acutely aware of the financial pressures facing bodies and understand that increased audit fees are an unwelcome additional budgetary pressure. Our strong view is that work on reforming accounting and auditing frameworks must reduce the volume of local audit work needed to make it more proportionate and relevant for users. We welcome the Government’s recognition that the local audit system is broken and their commitment to overhaul the system to provide better value for money for bodies and taxpayers. The absence of a proportionate local audit system and financial reporting framework has been a major contributor to the significant audit delays and the current audit opinion backlog. The Government and key system partners are now taking action which initially involves modified opinions on a scale that is unprecedented globally.
Our consultation took place during September-October 2024. It set out a proposed increase of 9.5% in total scale fees to cover additional audit work under revised standards and a contractual inflationary increase payable to audit firms.
Responses to the consultation understandably raise concerns about the need for an increase in audit fees given the financial pressures on opted-in bodies. We received 128 substantive responses to the consultation (25% of consultees), with 124 responses (97%) from opted-in bodies and four (3%) from other stakeholders. Of those who expressed a view, 53% agree with the proposed fee scale and 47% do not. Most responses also raise concerns about aspects of the proposed fee scale.
We thank all those who took the time to provide their views. The PSAA Board has reflected carefully on the consultation outcome and takes very seriously the views expressed. It has confirmed the final 2024/25 fee scale as proposed in the consultation but resolved to continue to press for change in local audit to address the issues raised. It noted that many of the issues raised in the consultation responses are complex and call for action that is outside our remit. For example, we cannot change the scope of local audits, direct auditors on the amount or timing of their work or commit additional funding for higher fees.
We will therefore continue to feed the concerns raised by bodies into the work MHCLG is leading on the forthcoming overhaul of the local audit system. We have long lobbied for change and bodies’ feedback on the areas to address this is invaluable.