Source · Select Committees · Public Accounts Committee
Recommendation 32
32
Accepted
In 2019, the previous Committee reported on the reduction in fees for auditing local authorities.90...
Conclusion
In 2019, the previous Committee reported on the reduction in fees for auditing local authorities.90 The Department accepted that audit fees had become insufficient to reflect the increased challenges in auditing local authorities.91 Sir Tony Redmond confirmed that audit fees in real terms had dropped significantly in recent years. He considered that the fall in fees had dissuaded a number of audit firms from bidding in 2017 for the current contracts to audit local authorities.92 The audit firm EY felt that the connection between the underlying cost of the audit and the fee had been lost, and that the fee regime was no longer fit for purpose.93
Government response summary AI-generated
The government has committed to amending regulations to provide the appointing person (PSAA) with greater flexibility in setting audit fees and to adjust the fee-setting deadline to better reflect additional cost pressures.
Summary of the government's response below — read the verbatim text to verify.
Government Response
Accepted
HM Government · verbatim extract
Accepted
3.4 As set out above, the government has committed to amend regulations to provide the appointing person (PSAA) with greater flexibility, including to set standardised fee variations across groupings of bodies, and to amend the fee-setting deadline to allow the appointing person to take account of additional information, to make it easier to reflect additional cost pressures from new requirements.
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