Grant Thornton has won the largest contract to audit local authority accounts, Public Sector Audit Appointments (PSAA) has announced.
The six lots that were put out to procurement last year have been awarded to five firms and a consortium. They will then be allocated councils, police and fire authorities that have signed up to the audit scheme by the end of the calendar year, following consultation to ensure any conflicts of interest are avoided.
PSAA was established after the abolition of the Audit Commission left councils with responsibility for appointing their own auditors.
In total 484 of 493 eligible bodies opted into PSAA’s scheme which it says will save the sector £6m a year on the five years of the contracts, equivalent to a reduction in fees of 18%.
steve freer web
PSSA chair Steve Freer said: “At the outset our objectives included maintaining high standards of audit quality and attracting very competitive prices. We are extremely pleased by the outcomes on both criteria.
“The process has also encouraged firms to think creatively about opportunities to achieve social value benefits. As a result it is clear that the contracts awarded will lead to the creation of 400 new finance apprenticeships over the five-year period - another terrific outcome.”
Grant Thornton won lot one, valued at £14.4m per audit year. The second biggest lot, worth £10.9m, went to EY; while lot three, worth £6.6m, went to Mazars. Lots four and five, each worth £2.2m, went to BDO and Deloitte respectively while lot six, which does not have a fixed value, has been awarded to a consortium of Moore Stephens and Scott-Moncrieff.
The overall reduction in fees means some firms will see a reduction in their audit income.
However Gareth Davies, head of public services at Mazars, said his firm had secured a larger contract through the procurement. He added: “We look forward to continuing to support local authorities and taxpayers with high quality public audit.”
PSSA was established by the Local Government Association which lobbied for changes to legislation to allow the creation of a sector-led body to appoint auditors on councils’ behalf.
LGA chair Lord Porter (Con) said: “It’s been a long journey, but I am extremely pleased that so many local authorities will reap such positive rewards – in terms of both quality and value for money.”