The 2025/26 fee scale
Introduction
The Local Audit (Appointing Person) Regulations 2015 and the Local Audit (Appointing Person) (Amendment) Regulations 2022 require that PSAA, as an appointing person, must specify the scale or scales of fees for the audit of the accounts of opted-in bodies before 1 December of the financial year to which the scale of fees relates.
We consult in September so that our fee proposals are based on the latest information available and to provide bodies with their proposed fees for budget planning.
We set the fee scale each year based on the income we require to meet our own and the audit contract costs. Periodically we return any surplus to bodies by means of a distribution or reduction in future fees, once it is clear the surplus is no longer needed to discharge our responsibilities. We regularly review the efficiency of our services to minimise our call on the public purse.
Our fees research considered the impact of other changes in audit and accounting requirements applicable for the first time for 2024/25 and 2025/26. Changes to IFRS 16 (Leases) and ISA (UK) 600 (Group Audits) are both applicable from 2024/25 for local government audits. Changes to the Code of Accounting Practice on the application of IAS 16 (Property, Plant and Equipment), IAS 36 (Impairment of Assets) and IAS 38 (Intangible Assets) are applicable to local government audits from 2025/26. We concluded that we are unable to consolidate additional fees into the fee scale at this point as the fees for individual bodies will be highly dependent on a body’s arrangements and the level of work required. We will need to evaluate the viability of incorporating additional fees in a future fee scale once we have enough information.
2025/26 fee scale elements
In summary, we propose that the fee scale for 2025/26 will be built up as follows:
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
Further information on each element is provided below
A. The scale fees set for 2024/25
We use the previous year’s scale fees as the starting point for the next year and then consider any necessary adjustments.
B. Adjustments for specific opted-in bodies
The impact of delayed and disclaimed audit completions has meant that information to set the fee scale has not been complete, and in some cases has been missing for multiple years. Where the need for additional or reduced recurrent work is now clear from approved fee variations or other information, we need to update scale fees. This has the benefit of providing clarity on expected fees before audit work is undertaken and reduces the need for ongoing fee variations.
We have considered information available since we published the 2024/25 fee scale in November 2024 and have identified where fee increases or reductions are required for recurrent audit work, for instance changes to Group structures. We are proposing to standardise the fee paid by Pension Fund Bodies for auditors to provide IAS 19 (Employee Benefits) assurance letters to the auditors of admitted bodies in line with our Universal Pricing principle.
We have also reviewed the bodies we identified as special cases when we set the 2024/25 fee scale and considered whether the additional fee adjustment remains appropriate. We have identified a small number, (less than 20), of additional special cases for 2025/26.
C. Adjustment for inflation
Our audit contracts provide for an inflationary increase for 2025/26 audits, based on the ONS annual CPI rate published prior to 1 April 2025, which was 2.8% on 26 March 2025. The increase applies to 2025/26 scale fees and the hourly rates for additional work submitted as fee variations.
2025/26 additional fee hourly rates
| Partner/ Director | Senior Manager /Manager | Senior Auditor | Other Staff | |
|---|---|---|---|---|
| 2025/26 audits | £440 | £243 | £157 | £120 |
Summary of proposal
In summary, we propose that the fee scale for 2025/26 will be built up as follows:
| 2025/26 fee scale: proposed elements |
|---|
| A – The scale fees for 2024/25 Plus: B – Adjustments for specific opted-in bodies C – Adjustment for inflation |
We will write to each opted-in body during the consultation period setting out their expected scale fee based on these elements. The example below illustrates how the scale fee will be made up:
Calculation example – 2025/26 scale fees
| Example (unitary council) | |
|---|---|
| A) 2024/25 scale fee | £300,000 |
| B) Add/remove: changes in ongoing fee variations (specific bodies only, not applicable to all audits) | £3,500 |
| Subtotal 2024/25 scale fees plus recurring additional fees | £303,500 |
| C) Contractual indexation (2.8% of subtotal) | £8,498 |
| Total scale fee for 2025/26 | £311,998 |