The government has committed to sort out the ‘broken local audit system’ with plans to set up a statutory and independent Local Audit Office (LAO) as a matter of urgency.

This will have five strategic responsibilities - coordinating the local audit system, contract management, ownership of the Code of Audit Practice, quality oversight and reporting. The body will be up and running by autumn 2026 once relevant legislation has been passed.

The provisional timeline expects the LAO to be ‘fully resourced’ by 2028 when it ‘begins contract management with other elements of its oversight, as set out in the transition plan to give the market clarity and time to adjust’.

It will also make it mandatory for local bodies to have an audit committee, and has set out a local audit vision with eight core principles, focused on totally reforming local audit.