We will first add or remove any approved recurring body-specific adjustment from the 2025/26 scale fee. We will then apply the 3.0% contractual increase to the resulting subtotal. The calculation example in this consultation illustrates this approach.
The proposed 2026/27 fee scale applies a 3.0% contractual inflationary increase to 2025/26 scale fees. Some bodies will also receive an adjustment where evidence shows a recurring increase or reduction in audit work. Examples include changes to group arrangements, special case factors, and recurring work relating to pension asset surpluses. Including this recurring work in […]
If your organisation is not an MLA in 2025/26 then a fee should not be charged as long as you do not also administer a pension fund that is an MLA. The MLA definition applies to the accounts of local authorities that administer pension funds, thus in this case a fee would be charged. Under […]
Local audit regulations require PSAA to set the fee scale before 1 December of the financial year to which the audit fees relate. This deadline often precedes full visibility of the impact of any changes. If a change in audit requirements is substantial and we can reliably estimate the additional fees, we will incorporate them […]
Additional fees for this work will depend heavily on the specific circumstances of each audited body, including its level of preparedness, the completeness and accuracy of accounting records, and the quality of supporting documentation and evidence. We anticipate a significant impact in the first year, which is unlikely to recur in subsequent years. As part […]
In April 2025, MHCLG announced 16 new commitments to reform local audit, including simplifying financial reporting requirements and increasing audit capacity to reduce reliance on a small number of auditors. These reforms are supported by £49 million in funding to help eligible bodies clear audit backlogs and cover the additional costs of rebuilding audit assurance. […]
The audit fee will reflect the volume of work done. For bodies where fees relate only to VFM arrangements and the issue of a disclaimer opinion, there will be no separate scale fee charge. For all other fee variations, the approach will depend on the specific circumstances of each body. Please note that, in the […]
For disclaimed audit opinions, we have reviewed each firm’s audit procedures for issuing such opinions. Firms were statutorily obliged to take account of the Local Audit Reset and Recovery Implementation Guidance (LARRIGs) issued by the National Audit Office in September 2024 and endorsed by the Financial Reporting Council. Ministerial statements have confirmed that firms will […]
We strongly believe that reducing the volume of local audit work is essential to delivering a more proportionate audit that complies with the Code of Audit Practice (the Code). This should be a key objective in reforming both the accounting and auditing frameworks. Ultimately, the amount of audit work will influence the overall audit fee, […]
Each year, we publish an Information Paper to support local discussions between opted-in bodies and auditors on auditing and accounting issues that may affect audit fees. The paper also outlines practical steps that audited bodies can take to help mitigate fee variations.