Introduction to the fee scale
PSAA’s remit
PSAA is specified under the Local Audit and Accountability Act 2014 and the Local Audit (Appointing Person) Regulations 2015 as the appointing person for principal local government bodies in England.
We are responsible for providing an auditor appointment scheme for eligible bodies which choose to opt in. This involves procuring and managing contracts with audit firms for the provision of audit services. PSAA’s specific remit under the regulations is to:
- appoint an auditor to all bodies that have chosen to opt into the scheme rather than appoint their own auditor;
- set a scale or scales of fees; and
- monitor independence and contractual compliance of the audit firms it appoints.
Audit scope
PSAA does not control the scope or timescale of the local audit work auditors undertake:
- the National Audit Office publishes the statutory Code of Audit Practice (the Code) for auditors of local public bodies, which sets out what local auditors are required to do to fulfil their statutory responsibilities under the Local Audit and Accountability Act 2014. The 2024 Code came into force in November 2024, replacing the 2020 Code;
- CIPFA/LASAAC sets financial reporting requirements for local government bodies in the Code of Practice on Local Authority Accounting; and
- the Financial Reporting Council is responsible for regulating audit quality.
The Code of Audit Practice requires the auditor to:
- use their professional judgement to apply the principles and requirements set out in the Code to the particular circumstances that exist at each body;
- ensure their work is designed to meet the auditor’s statutory responsibilities, applying the auditor’s professional judgement to tailor their work to the circumstances in place and the audit risks to which they give rise; and
- comply with auditing standards currently in force in the United Kingdom, as may be amended from time to time, having regard to any other guidance issued by a relevant regulatory body, and statutory guidance issued by the NAO.
Our contracts with audit firms require auditors to undertake audits that comply with the requirements of the Code of Audit Practice. Once appointed auditors exercise their statutory and professional responsibilities independently of PSAA, by design of the local audit framework.
The Accounts and Audit (Amendment) Regulations 2024 took effect on 30 September 2024 and now set the timescales under which audit work should be completed up to 31 March 2028. There has previously been no statutory deadline for local audit completions.
Audit fees
The Local Audit (Appointing Person) Regulations 2015 and the Local Audit (Appointing Person) (Amendment) Regulations 2022 require that PSAA must specify the scale or scales of fees for the audit of the accounts of opted-in authorities before 1 December of the financial year to which the fee scale relates. A fee scale cannot be amended after this date.
Where the impact of changes in audit requirements cannot be determined at the time the scale is set, adjustments are made through the fee variations process. This mechanism allows fees to increase or decrease based on the actual work required. If these changes become permanent, they are incorporated into future fee scales.
The total audit fee for an opted-in body reflects its circumstances, audit risks, and the volume and nature of work needed to deliver a Code-compliant audit. This is influenced by local factors and national accounting, auditing, and regulatory requirements. which are determined nationally.
The total audit fee for an opted-in body is a combination of:
- the scale fee – based on the information available when the fee scale is set; and
- fee variations – determined after PSAA reviews and challenges auditor submissions explaining why more or less work was required than expected.
The 2025/26 fee scale consultation
We consulted on the 2025/26 fee scale and wrote to bodies with details of their expected fees.
Most respondents (80%) supported the proposed fee scale.
Many of the issues raised are complex and typically call for action outside our statutory remit. For example, we cannot change the scope of local audits, direct auditors on the amount or timing of their work, or secure additional funding for higher fees.
A summary of the responses to the consultation is available on our website. We welcome the feedback provided and thank those who responded.