Experts have warned councils could be hit by a £75m increase to their audit fees as details of the next five-year procurement were announced.
Public Sector Audit Appointments (PSAA) said total fees may increase by £75m from £50m in 2022-23 to £125m in 2023-24.
PSAA chair Steve Freer admitted the increase in audit fees was ‘dramatic’ and the body did not have ‘levers to mitigate the very significant increase in audit fees anticipated in 12 months’ time’.
A PSAA spokesperson said: ‘At this stage our advice to bodies is to anticipate a major reset of total fees for 2023-24 involving an increase in the order of 150% on the total fees for 2022-23.
‘We appreciate that the extent of this likely increase in audit fees will pose a significant funding challenge for local bodies already facing a daunting range of financial pressures.’
The increase in the bid prices PSAA received for the work comes after the chair of the Public Accounts Committee, Dame Meg Hillier, raised concerns about the ‘challenges surrounding local audit, including the backlog of unfinished audits, capacity in the local audit market and the slow pace of system reform’.
PSAA said there was ‘limited capacity’ in the market and the ‘challenging backcloth’ had led to a ‘less competitive’ procurement round.
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