Introduction
Local audit regulations require us to set the 2024/25 fee scale before 1 December 2024, following consultation. The fee scale cannot be amended after this date.
Audit work under this fee scale is likely from March 2025 to February 2026 under the dates set out in the statement on the local audit backlog published by the Ministry of Housing, Communities and Local Government (MHCLG) in July 2024 and confirmed in the Accounts and Audit (Amendment) Regulations 2024.
The Government has acknowledged that the local audit system is broken, evidenced by the current significant backlog of local audit opinions. MHCLG’s July 2024 statement sets out the immediate action to be taken with the Financial Reporting Council (FRC), the National Audit Office (NAO) and the wider system to address the backlog and put local audit onto a more sustainable footing.
The backlog solution involves modified opinions on a scale that is unprecedented globally, but the scale fees do not cover the costs of building back assurance as we are not able to estimate what they will be. We are working on quantifying the fees and related costs of disclaimed audits and will provide further information as soon as we can. The MHCLG statement above sets out the broad principles on audit fees under the backlog arrangements.