The 2024/25 fee scale
We have set the 2024/25 fee scale based on the work required under the Code of Audit Practice published by the National Audit Office and associated auditor guidance as far as we are able given the information available to us.
After careful consideration of the issues raised in the feedback to our consultation, we have set the fee scale for 2024/25 using the following elements:
| 2024/25 fee scale elements |
|---|
| A – The scale fees for 2023/24 Plus: B – Fees for significant changes in audit requirements (ISA 315 and related ISA 240 requirements), using standard fees based on body type C – Adjustments for specific opted-in bodies D – Adjustments for inflation of 3.4% |
Work on ISA (UK) 315/240
Under current local audit requirements, additional audit work under revised ISA (UK) 315 (risks of material misstatement) and the related impact of ISA (UK) 240 (fraud) is required at all local audit bodies from the 2022/23 audits.
Additional fees for this work (under element B in the table above) are included in the fee scale based on standard fees for groups of bodies:
Additional standard fees to be consolidated for work on ISA 315 and 240
| Body type | Standard fee |
| Metropolitan district council, London borough, unitary authority, county council | £15,960 |
| District council | £9,410 |
| Police and Crime Commissioner | £4,710 |
| Chief Constable | £4,710 |
| Fire authority | £7,058 |
| Pension fund audit | £7,840 |
Adjustment for inflation
Our audit contracts provide for an inflationary increase for 2024/25 audits. The inflation level which must be applied is the 12-month CPI rate published by 31 March before the start of the relevant audit year. The set point at which inflation applies is to provide certainty.
The latest ONS annual CPI rate published prior to 1 April 2024 is 3.4% (published in March 2024). This is the rate applied to the 2024/25 fee scale.
Subsequent changes in national or local audit requirements
Changes in audit work or audit requirements that are identified or quantified after publication of this fee scale or are not ongoing requirements will continue to be subject to the fee variations process.
We will review any estimated figures consolidated into the scale fees of individual bodies and the adjustments for special cases to ensure they remain appropriate.
Local audit backlog
This fee scale does not cover audit work required in relation to arrangements to address the local audit backlog, announced in the statement on the local audit backlog published by MHCLG in July 2024. A further statement is expected by the end of 2024.
The backlog solution involves modified opinions on a scale that is unprecedented globally. We are working on quantifying the fees and related costs of disclaimed audits and will provide further information as soon as we can.
MHCLG’s July statement sets out the broad principles on audit fees:
- if auditors have worked in good faith to meet the requirements of the Code of Audit Practice in place at the time the work was conducted (and have reported on work that is no longer required), then they are due the appropriate fee for the work done, and the body is due to pay the applicable fee, including where there is a modified or disclaimed opinion; and
- if an auditor has collected audit fees in part or in full, and the backstop date means that the total work done represents less than the fee already collected, then the auditor must return the balance and refund the body the appropriate amount.