The Audit Commission is to retender £25m of local audit contracts in a bid to find further savings.

The contracts amount to around 30% of total audit work carried out in England and are currently held by Deloitte, Grant Thornton, KPMG, PwC and PFK.

They relate to local authority and primary care trust accounts which were outsourced to the firms in 2006 and 2007, before the abolition of the Commission was announced in 2010.

Since then the rest of the Audit Commission's audit work has been outsourced to the private sector in a move which is expected to produce £250m in savings over five years and see statutory audit fees cut by up to 40%.

As a result, the Commission says that it has now decided to terminate the earlier contracts and re-tender them, with the new arrangements coming into effect for the 2015/16 accounts.

Audit Commission chair, Jeremy Newman, said: 'We are not complacent and we've taken a step that we anticipate will reduce audit costs, passing on even more savings for local public bodies.'

Following the most recent round of tendering two firms, Ernst & Young and Mazars, entered the local public sector audit market for the first time.

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