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.
MHCLG wrote to all Chief Financial Officers of eligible local audit bodies on 24 June 2025 regarding the funding and published further details in a technical note on its website on 10 July 2025. The funding is provided as a non-ring-fenced grant and will be released in two stages during 2025/26. Allocations are based on audit fee size and the number of modified audit opinions. Funding is conditional on the publication of outstanding audited accounts and payment of audit fees determined by PSAA.
The first payments were made on 26 and 27 June 2025. MHCLG’s technical note explains how allocations were calculated and lists payments to each eligible body in section 3. The second instalment will be paid early in 2026 following a review of costs.