The Government will provide funding to councils to cover the costs of additional audit fees, with a first tranche of £49 million for qualifying local authorities in 2025/26.
The funding is to help build back reassurance for local authorities affected by the audit backstop process, designed to clear the current backlog in council audits.
Cllr Pete Marland, Chair of the LGA’s Economy and Resources Board, said government had responded positively to the LGA’s concerns on councils’ audit costs, but said it was crucial the amount of funding available is kept under review against actual costs, to “ensure it meets the long-term needs of making the audit system sustainable”.
The Government has also published the outcome of a consultation on local audit reform and set out more details of how the new regulatory body –the Local Audit Office (LAO) – will operate as part of efforts to address the “broken” local audit system.
It said the LAO will “hold responsibility for quality oversight of local audit”, which will include overseeing an inspection programme, enforcement, and appropriate elements of supervision.
Cllr Marland added: “The LGA strongly believed each council should retain the right to appoint its own audit committee chair and it is good we have been successful in making this case. However, the new mandatory requirement for every audit committee to include at least one independent member will mean the Government will need to ensure guidance addresses specific concerns that we raised in our consultation response.”