2023/24 auditor appointments and audit fee scale

Audit fee scale (November 2023)

PSAA has published the 2023/24 audit fee scale, following consultation.

The fee scale applies for the audit work to be undertaken by appointed auditors in respect of the 2023/24 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 2023/24 fee scale must be published before 1 December 2023 and cannot be amended after that date. Any subsequent changes in national requirements or local circumstances relating to the 2023/24 audits will therefore be the subject of fee variations.

There is a local audit system-wide discussion taking place about the timetable for the audit work for 2023/24 and earlier years for which audit opinions are outstanding, but there has been no announcement on the way forward at the time of publishing the fee scale.

2023-24 directory of auditors and scale fees for opted-in bodies (excel file)

Consultation summary

Our consultation on the 2023/24 fee scale explained the difficulties of setting the fee scale at a time of significant change in the local audit system. The audit profession has been subject to high levels of scrutiny in recent years following several widely reported financial failures in the private sector. Over this period there have been growing delays in completing local audits. In July 2023 the Department for Levelling Up, Housing and Communities (DLUHC) announced proposals to address the backlog, and is working with all stakeholders to tackle the complex issues involved.

Our consultation on the fee scale set out the proposed approach to calculating the fees for 2023/24 audits, ensuring that scale fees are as fully and consistently updated as possible. The calculation is based on:

  1. the scale fee for the previous year (2022/23), as the starting point;
  2. adding in fees for any changes in the audit work now needed, replacing the need for fee variations where possible; and
  3. taking the total of the previous scale fee plus the additional work needed (a plus b) and applying the procurement adjustment of 151% for the new contract rates for audit firms.

We are grateful for all the responses to the consultation, which have provided very helpful feedback on our proposals and the concerns of stakeholders. The PSAA Board has reflected on the consultation outcome and takes very seriously all the points made. The Board has decided to set the 2023/24 fee scale as proposed in the consultation, having taken into account all feedback.

We understand the concerns raised in consultation responses. Many of the issues are complex and PSAA does not control the factors involved, for example the scope of local audit work. We have highlighted the need for urgent action to reform the local audit system in England, in response to the pressures and market fragility of recent years. We have publicly stated our view that radical changes are needed to achieve a more proportionate and timely audit and a more sustainable audit system. We will continue to seek action on these issues with government and key stakeholders and to highlight the concerns expressed in the consultation.