Consultation outcome
Our consultation explained the proposed elements of the 2025/26 fee scale, comprising:
| 2025/26 fee scale elements |
|---|
| A – The scale fees set 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. |
The additional fees are based on approved fee variations for previous years, the results of our research and discussions with public audit providers and audit firms. The inflation adjustment required for 2025/26 is set at a fixed point in time as specified in the contracts. The rate is based on the CPI 12-month rate most recently published prior to 1 April and for the 2025/26 audit year.
We held a webinar for bodies on 2 October to support our consultation process. We were joined by CIPFA who covered CIPFA/LASAAC’s consultation on the 2026/27 Code of Practice on Local Authority Financial Reporting in the UK. The webinar slides and recordings are available on our website.
We received 126 responses to the consultation (25% of consultees), with 122 responses (97%) from opted-in bodies and 4 (3%) from national stakeholders. Of those who expressed a view, 80% confirmed they agree on balance with our proposals and 20% did not agree.
Overall consultation response
| Support the proposed fee scale without reservations | Support the proposed fee scale with reservations | Total YES Agree with proposals | Total NO Do not agree | ||||
|---|---|---|---|---|---|---|---|
| Number | % of total responses | Number | % of total responses | Number | % of responses | Number | % of responses |
| 28 | 22% | 73 | 58% | 101 | 80% | 25 | 20% |
Key themes in consultation responses
We thank all consultees for their considered feedback. The positive responses to the consultation generally recognise that additional audit work requires additional fees, however unwelcome these are. There is a broad range of views reflected in individual responses. The most common are:
- Affordability and Financial Pressure – Many consultees report that the proposed 2.8% inflationary fee increase and the provisional 1.2% additional fees is difficult to absorb, particularly following significant uplifts in previous years. Councils, police, and fire services note that rising audit fees are diverting resources from frontline services and intensifying budgetary pressures.
- Value for Money and Audit Efficiency – Respondents questioned whether fee increases are not matched by improvements in audit quality, timeliness, or efficiency, and call for greater transparency in how additional fees are calculated.
- Proportionality of Audit Scope – Consultees emphasise the need for a more proportionate audit approach focused on material issues, expressing frustration over audit effort spent on areas such as asset valuations and pensions, which are perceived as adding limited value. Consultees called for a more risk-focused approach.
- Transparency and Predictability of Fees – Bodies request clearer breakdowns of fee components, particularly for recurring and additional audit work, and greater visibility over future fee variations, especially in relation to new standards such as IFRS 16 and ISA 600.
- Impact of Audit Backlogs and Disclaimed Opinions – Several responses highlight the financial burden of disclaimed audits and rebuilding assurance and urged PSAA to challenge additional fees where delays are not attributable to the audited body.
- Local Audit Reform and Systemic Issues – Many respondents support ongoing reforms to the local audit framework, including the creation of the LAO and simplification of financial statements, with the expectation that these changes will reduce complexity and cost.
- Differentiation by Size and Complexity – Smaller authorities and bodies with simpler operations argued that fees should better reflect their scale and risk profile, and shared services and group structures are not adequately considered.
- Expectations for Auditor Performance – Respondents expect higher fees to be accompanied by improved auditor resourcing, sector knowledge, and engagement, and raised concerns about the use of junior or overseas staff with limited understanding of local government accounts.
- Support for Consolidation of Recurring Fees – Many bodies welcome the inclusion of recurring audit work within the scale fee, which supports financial planning, but seek more timely and detailed communication about what is included.
- Call for Greater Engagement and Accountability – Consultees request more meaningful engagement with PSAA beyond annual consultations, including mechanisms to challenge fees and provide feedback on audit service quality.