The 2025/26 fee scale
We have set the 2025/26 fee scale based on the work required under the Code of Audit Practice published by the National Audit Office and associated auditor guidance as far as we are able given the information available to us.
After careful consideration of the issues raised in the feedback to our consultation, we have set the fee scale for 2025/26 using the following elements:
| 2025/26 fee scale elements |
|---|
| A – The scale fees for 2024/25 Plus: B – Adjustments for specific opted-in bodies, where updated information is now available C – A contractual adjustment of 2.8% for inflation |
Adjustment for inflation
Our audit contracts provide for an inflationary increase for 2025/26 audits. The applicable rate is the 12-month CPI rate published by 31 March before the start of the relevant audit year, providing certainty for fee setting.
The latest ONS annual CPI rate published prior to 1 April 2025 is 2.8% (published in March 2025). This is the rate applied to the 2025/26 fee scale.
Subsequent changes in national or local audit requirements
Changes in audit work or requirements identified after publication of this fee scale or that are not ongoing will continue to be subject to the fee variations process.
We will also review any estimated figures consolidated into the scale fees and adjustments for special cases to ensure they remain appropriate.
Local audit backlog
This fee scale does not cover audit work required in relation to arrangements to address the local audit backlog.
We are currently assessing the fees and related costs for rebuilding assurance and will share further details as soon as possible. These costs will be addressed through fee variations, as the scale fees do not cover work associated with disclaiming audits or restoring assurance. Because such activities cannot be reliably estimated in advance and are not considered recurring, they will be managed outside the standard fee scale.
MHCLG’s July statement sets out the broad principles on audit fees:
- if auditors have worked in good faith to meet the requirements of the Code of Audit Practice in place at the time the work was conducted (and have reported on work that is no longer required), then they are due the appropriate fee for the work done, and the body is due to pay the applicable fee, including where there is a modified or disclaimed opinion; and
- if an auditor has collected audit fees in part or in full, and the backstop date means that the total work done represents less than the fee already collected, then the auditor must refund the body the appropriate amount.