In April 2025 MHCLG announced 16 new commitments to reform local audit, including simplifying financial reporting requirements and increasing capacity to avoid reliance on a small number of auditors. The reforms are backed by funding of £49 million to help eligible bodies clear their audit backlogs and cover the additional cost of rebuilding audit assurance.
MHCLG wrote to all Chief Financial Officers of eligible local audit bodies on 24 June 2025 about the funding and published further information on its website in a technical note on 10 July 2025. The funding takes the form of a non-ring-fenced grant and is being released in two stages during 2025/26. Allocations are based on the size of a body’s audit fees and the number of modified audit opinions. Funding is subject to the conditions that outstanding audited accounts have been published and audit fees determined by PSAA have been paid.
MHCLG made the first payments on 26 and 27 June 2025. MHCLG’s technical note sets out how individual allocations have been calculated and lists at section 3 the payments made to each eligible body. The second instalment will be paid early in 2026, following a review of costs.
A body which considers it is eligible for the funding but has not received a payment should in the first instance check its compliance with the eligibility criteria set out in the MHCLG technical note. Bodies which published audited accounts after the backstop dates have not been included in the June allocation determinations and will be paid in the coming months.
The MHCLG announcement provides the following contact details for any queries or issues with the payments: localaudit@communities.gov.uk.