Recommendation 14

In November 2025, MHCLG published its Transition Plan for moving to a new system of oversight for local audit. The English Devolution and Community Empowerment Bill, laid in Parliament on 10 July 2025, includes the proposed legislation needed to implement this strategy. The establishment of a new single body, the Local Audit Office (LAO), is central to progress. The LAO is intended to streamline and simplify the system. It will assume the functions of appointing and contracting auditors for local authorities and it will 20 MHCLG, Local audit reform: a strategy for overhauling the local audit system in England, December 2024 21 Q 11 22 Q 14 23 Q 24 24 Q 14 12 adopt ownership of the Code of Audit Practice and have powers to interpret and apply ISA requirements for the local audit context. Once established, the LAO will also take on oversight from MHCLG of the remainder of the backstop programme.25