Local Audit Backlog in England: Non-compliance Lists

Effective local audit provides transparency, accountability, trust and confidence in local bodies to spend taxpayer money wisely. Close to 500 local bodies in England are required to publish their audited accounts annually.

However, the Government inherited a broken local audit system in England, evidenced by an audit backlog that peaked at 918 outstanding unaudited accounts in September 2023. More recently, the whole of Government accounts for financial year 2022-23 was disclaimed in autumn 2024, primarily due to a lack of audit assurance on local government accounts.

In July 2024, I outlined proposals to clear this unacceptable backlog and give taxpayers’ the confidence they deserve. These measures were implemented in autumn 2024 via amendments to the Accounts and Audit Regulations 2015 and through the Comptroller and Auditor General’s new code of audit practice. Without these measures, audits would continue to be delayed, and the local audit system would move further away from timely, effective audit, with significant additional cost to the taxpayer. The measures are supported by all key local audit system partners.

The Government appreciate the efforts that bodies and auditors are undertaking to support the drive to fix the foundations. The outcome of the 13 December 2024 backstop shows a shared commitment to restoring sound financial practice to the sector.

The 2015 regulations, as amended, require bodies to publish audited accounts (including the audit opinion) on their website by the statutory backstop dates below:

Financial year

Backstop date

Up to and including 2022-23

13 December 2024

2023-24

28 February 2025

2024-25

27 February 2026

2025-26

31 January 2027

2026-27

30 November 2027

2027-28

30 November 2028

The 2015 regulations also specify circumstances in which bodies may be exempt from meeting a backstop date (these are in line with exemptions for auditors set out in the code of audit practice). Where such an exemption exists, bodies must publish an explanation on their website on (or as soon as practicable after) the relevant backstop date, and publish audited accounts as soon as practicable.

If a body is not exempt and fails to comply, it must publish an explanation on its website on (or as soon as practicable after) the relevant backstop date, send a copy of this to the Secretary of State and publish audited accounts as soon as practicable.

Following the 13 December 2024 backstop, the system has taken a significant step forward. The vast majority of bodies (approximately 95%) have now published audited accounts for all years up to and including 2022-23. 233 bodies (approximately 50%) have published all audited accounts for years up to and including 2022-23 with unmodified opinions.

In line with expectations, around 200 bodies (approximately 45%) have published at least one disclaimed opinion due to the backstop. Across all years, close to 400 backstop disclaimers have been published.

Six bodies were exempt from this backstop date.

In the interests of transparency, my statement of July 2024 committed to publishing lists of bodies and their appointed auditors that do not meet backstop dates. I can confirm that the Government have today published two lists on gov.uk as follows:

a list of 21 bodies yet to publish all audited accounts for financial years up to and including 2022-23 as of 19 February 2025, and;

a list of 47 bodies that had not published one or more audited accounts for financial years up to and including 2022-23 by 13 December 2024, but had published all audited accounts as of 19 February 2025.

The publication of audited accounts is a joint endeavour between bodies and audit firms, and is shaped by a complex array of factors. Accordingly, today’s publication does not provide detailed commentary on individual circumstances as to why a body did not publish all its audited accounts by the backstop. It does, however, include factual context on whether the body published its unaudited draft accounts by 31 October 2024 to allow the 30-working-day statutory public inspection period to conclude ahead of the backstop date.

Bodies and audit firms named in the lists were contacted prior to publication, including to help reinforce the legislative requirements and, where relevant, to emphasise the importance of publishing audited accounts as soon as practicable. The Government will continue to engage with bodies with outstanding accounts as appropriate.

The deadline for publication of audited accounts for 2023-24 was 28 February 2025. The Government will update on the outcomes of this backstop in due course.

Clearing the backlog is a vital priority. However, to fix the broken local audit system, systemic reform is clearly also needed. In December 2024, the Government published a strategy for overhauling the local audit system in England: https://www.gov.uk/government/consultations/local-audit-reform-a-strategy-for-overhauling-the-local-audit-system-in-england/local-audit-reform-a-strategy-for-overhauling-the-local-audit-system-in-england#local-audit-office-remit-1

The Government committed to a series of measures as well as consulting on others, and we are carefully considering responses to those consulted on as part of the strategy (the consultation closed on 29 January 2025). The Government response, which will set out next steps, will be published shortly.

Overhauling the broken local audit system demonstrates our determination to drive sustained improvement and ensure that local government is fit, legal and decent. It is the least taxpayers can expect, and this Government fully intend to use all levers available to fix the local audit system and give the sector the firm foundations that it requires.

[HCWS492]