This edition of our quarterly e-bulletin includes an update on local audit reform, our consultation on the 2025/26 audit fees, the Audit Contract Monitoring Report for the 2023/24 audits, our new business plan and a summary of local audit news from elsewhere.
We will use these quarterly e-bulletins to continue to keep you informed as we transition towards the proposed Local Audit Office (LAO). You can also keep up to date by following us on LinkedIn.
We hope that you continue to find our e-bulletin to be useful. We welcome your thoughts on future topics that you would like us to cover (contact the team).
Content:
- Update on local audit reform
- Consultation on the 2025/26 audit fees
- Audit services contract extension to 2029/30
- Audit Contract Monitoring Report
- Your feedback on the 2023/24 audits
- Update to our Terms of Appointment for audits from 2023/24
- Audit opinion data
- Our Business Plan to 31 March 2028
- Updated Privacy Notice
- Local audit news from elsewhere
Update on local audit reform
On 18 August MHCLG confirmed that the Local Audit Liaison Committee (LALC) was replaced by the Local Audit System Transition Board. It will provide advice and challenge to support MHCLG in managing the transition to the reformed local audit system and provide oversight of the work to build-back audit assurance. MHCLG’s formal notification letter provides additional information.
MHCLG amended the Regulations on the Major Local Audit threshold as part of their wider local audit reform strategy, increasing the threshold from £500m to £875m. This became law on 17 August 2025, following the laying in Parliament of the English Devolution and Community Empowerment Bill in early July. The threshold for requiring a Code of Audit Practice audit also increased from £6.5m to £15m for 2025/26.
Consultation on the 2025/26 audit fees
Our consultation on the fee scale for 2025/26 audits closed on 13 October. We invited feedback from all opted-in bodies, our contracted firms and key stakeholders and received over 126 responses. We also informed bodies of the calculation for their 2025/26 scale audit fee based on the elements set out in the fee scale consultation.
We held a webinar for bodies on 2 October to support our consultation process. We were joined by CIPFA who covered CIPFA/LASAAC’s consultation on the 2026/27 Code of Practice on Local Authority Financial Reporting in the UK. The webinar slides and recordings are available on our website.
We want to thank everyone who took the time to respond to the consultation. Our Board will consider all responses carefully before setting the final 2025/26 fee scale which we will publish on our website by 28 November 2025. We will also confirm the outcome in writing to everyone who was consulted.
Audit services contract extension to 2029/30
We have extended our current audit contracts by two years to cover the audits of 2028/29 and 2029/30, following mutual agreement with the appointed firms. This extension ensures continuity and stability in local audit arrangements for bodies and will help enable the LAO to concentrate its early efforts on other areas in its initial phase.
Audit Contract Monitoring Report
We recently published our Audit Contract Monitoring Report for the 2023/24 audits. We monitor the performance of audit suppliers against their contractual obligations and assess whether their work meets our requirements for service delivery to bodies.
The report summarises the results of our monitoring activities for the 2023/24 audits and is the first under the second appointing period contracts. It provides information on auditor reporting outcomes and reflects the implementation of statutory backstop dates, and the evolving local audit reform strategy.
Your feedback on the 2023/24 audits
The results of the client survey are available to view on our website. The feedback indicates an improvement overall compared to previous years, with most recipients stating that the audit service delivered met expectations. The responses included a call to address local audit issues while ensuring audits deliver value for money.
We also published a summary of the results of a tailored survey that was issued to bodies that did not receive an audit opinion by 31 March 2025. The responses showed that delays to audit opinions were attributed to a range of factors including prior year delays, resourcing from firms, bodies or both, and in a small number of cases complex legal matters or objections.
Update to our Terms of Appointment for audits from 2023/24
We have updated our Terms of Appointment (ToA) for audits from 2023/24 and all DPS procurements, effective from the date of publication. The ToA is issued alongside the audit contracts to provide guidance to audit firms on the procedures and requirements for delivering the audit services. Changes include more detailed information relating to our contract management arrangements, and minor updates to align with the 2024 Code of Audit Practice and revisions to the Financial Reporting Council’s Ethical Standard.
Audit opinion data
We have published the number of audit opinions delivered up to 30 September 2025. 435 out of 460 audit opinions have been delivered for 2023/24, excluding pension fund audits. A reminder that we publish data on audit opinion delivery each month, covering opinion delivery for the audits from 2018/19 onwards.
Our Business Plan to 31 March 2028
We have published a summary of our Business Plan to 31 March 2028. It outlines our commitment to deliver our statutory responsibilities to appoint auditors, set fees, and manage the audit services contracts while supporting the Government’s local audit reforms which includes establishing the proposed Local Audit Office (LAO) in Autumn 2026. It details our plans for key areas of our work over the next few years.
Updated Privacy Notice
Our updated Privacy Notice, effective from 31 October 2025, sets out how we process your personal data and who we share it with. We remain committed to ensuring you understand how we use your data and to keep it safe.
Local audit news from elsewhere
On 5 September there was a call for evidence in respect of the English Devolution and Community Empowerment Bill. The Public Bill Committee met on 16 September 2025 to scrutinise the Bill, and PSAA Chair Bill Butler gave evidence alongside the NAO’s Comptroller and Auditor General Gareth Davies. The Committee will report on 12 November 2025.
CIPFA/LASAAC closed their consultation on the 2026/27 Code of Practice on Local Authority Accounting in the UK (the Code) on 12 October 2025. The 2026/27 Code will apply to accounting periods starting on or after 1 April 2026.
On 17 July Gareth Davies disclaimed his opinion on the Whole of Government Accounts financial statements for 2023/24, providing no assurance to Parliament on the financial statements. This is due to the lack of audited accounts for English local authorities.