LGA response DLUHC request for views on deadline draft unaudited accounts

The 31 May deadline should be extended to 30 June for preparing draft (unaudited) accounts for the 2022/23 year and onwards until the current crisis in local audit has been resolved .

About the Local Government Association

  • The Local Government Association (LGA) is the national voice of local government. We are a politically led, cross party membership organisation, representing councils from England and Wales.
  • Our role is to support, promote and improve local government, and raise national awareness of the work of councils. Our ultimate ambition is to support councils to deliver local solutions to national problems.
  • This response has been cleared by the lead members of the LGA’s Resources Board.

Individual questions

Question 4. Do you agree that the deadline for category 1 authorities to publish their draft accounts should remain at 31 May?

No. The 31 May deadline should be extended to 30 June for preparing draft (unaudited) accounts for the 2022/23 year and onwards until the current crisis in local audit has been resolved. It is important for work planning purposes, taking account of available resources in councils and in the audit market, to have a settled deadline from year to year. We would argue the deadline should not revert to 31 May or be reviewed again until the current crisis is resolved. We note that the audit deadline has now been fixed for six years

Question 5: Do you have any further comments about the proposal for this deadline to remain at 31 May?

As is recognised in the consultation document, the deadlines were extended for 2020/21 and 2021/22 to reflect the extraordinary pressures affecting the audit market. Local audit continues to be in crisis and these pressures are still there, as is reflected in the report on the Timeliness of local auditor reporting from the National Audit Office (NAO) published on 25 January 2023. Only 12 per cent of local authority audited accounts for 2021/22 were signed off by the extended November deadline, and at the end of 2022 well over 600 audit opinions were outstanding; while nearly 400 of those related to 2021/22, some went back several years.

In December 2021 in Measures to improve local audit delays the Government committed to consulting on reverting back to the 31 May deadline for publishing draft accounts. The current consultation, published on 16 February 2023 to run for two weeks, is intended to fulfil that commitment. This is too short a consultation period for such an important consultation and one that was promised more than a year ago.

The deadline for published audited local authority accounts was moved to 30 September for 6 years, until the end of the next appointing period. This was a necessary move to enable the new audit contacts to be procured and was welcome. This will impact on the timetable for audit work and so is relevant to the deadline for the draft accounts.

Under the proposals in the current consultation, the deadline for preparing draft (unaudited) accounts will revert to 31 May from 2023, having been 31 July in the past two years. For the past two years most councils have been able to finalise their draft accounts by this published deadline of 31 July but will be under greater pressure to do this for their 2022/23 accounts if the deadline reverts to 31 May 2023. A deadline of 30 June would be more realistic. Given the extension of the audit deadline to 30 September it is unlikely that audit work will be planned to commence soon after 31 May and so reverting to this earlier deadline will cause an unnecessarily tight turnaround for councils. 

A 31 May deadline will mean that councils and their hard-pressed finance staff will work under pressure to finalise the accounts by 31 May and then will probably have to wait more than a month before the audit commences. A deadline of 30 June would make more sense for all concerned.

The early tight deadline of 31 May could also impact on the quality of draft accounts delivered for audit which could in turn, perversely, create more work and actually lead to further delays.

We now call on DLUHC to extend the 31 May deadline to 30 June for preparing draft (unaudited) accounts for the 2022/23 year and onwards.

Consultation document


Bevis Ingram, Senior Adviser Finance

Email: [email protected]