Audit fees for local public bodies are now at a 25-year low, and the government is set to save up to £440m by extending current contracts until 2020, rather than the 2017 cut-off, according to the Audit Commission
The Commission, which is due to be abolished next March, has launched its final consultation on its work programme and scales of audit fees. This shows fees will reduce by 25%, following the retendering in March 2014 of the work done under its older contracts. This comes on top of a 40% drop in fees in 2012.
The Audit Commission say this translates into a £30m reduction in audit fees from 2015 to 2017, taking total fees to the lowest level since the Commission took on NHS audit in 1990. It also calculates that if the government chooses to extend both the 2012 and 2014 contracts beyond 2017 to 2020, and locks in deals at these rates, the total saving to audited bodies from 2012 would be £440m.
Jeremy Newman, chairman of the Audit Commission, said: ‘We have driven down prices for audit services, showing again that bulk procurement is the best way to maintain a competitive market and provide taxpayers with value for money. Fees should be preserved at this level for 2016/17 and we hope the government will take the opportunity we have secured to lock in and extend the savings we have achieved up to 2020.’
In addition to cutting audit fees, the Commission is returning £6m to its audited bodies in rebates, having also made a £8m rebate in March, as a result of reductions in anticipated. redundancy costs.
From 1 April 2015 a transitional body, Public Sector Audit Appointments Ltd (PSAA), an independent company set up by the Local Government Association, will oversee the Commission’s audit contracts until they end in 2017.
