Background
PSAA has published the fee scale for 2023/24 audits, following consultation with opted-in bodies and stakeholders.
Local audit regulations require PSAA to set the fee scale before 1 December of the financial year to which the scale applies.
A significant proportion of audit work is undertaken after the end of the relevant financial year by necessity. There is currently 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 currently outstanding, but there has been no announcement on the way forward at the time of writing.
Our consultation 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. We will write to opted-in bodies individually when we have more information on confirmed changes and their impact on audit fees.
The 2023/24 audits are the first in the second five-year appointing period specified by PSAA, covering 2023/24 to 2027/28. PSAA awarded new contracts for this period in 2022 to six audit firms, following a challenging and protracted procurement. The procurement demonstrated clearly the limited audit capacity available to meet the demands of the local government audit market and resulted in an increase of 151% on total fees for local audit work.