Briefing / The NHS external audit market: an update on current issues

Over recent years we have increasingly heard from our members that they are finding it difficult to appoint an external auditor, with little or no interest being shown in invitations to tender for external audit services. Some members have also reported that their auditor has resigned or has declined to extend the current audit contract.

There are many complex and intertwined factors leading to the issues in the NHS external audit market, with similar issues being reported in local government. HFMA’s briefing in February 2021, The NHS audit market: current issues and possible solutions explored these issues and covered the tendering process, audit interest, risk, capacity and fees. Issues have also been highlighted for members in a series of blogs including: Targeting sustainable external audit and Year-end audit: targeting a smooth operation.

The public sector external audit market remains an area of significant concern, with some commenting that it is approaching crisis point. In May 2022, 61 finance directors and chief finance officers in England responded to a short HFMA survey to help establish a picture of the latest position on external audit appointments, and in particular any difficulties in audit procurement.

This short briefing provides a reminder of the key issues in the external audit market and sets out the results of the survey. It also includes an update on national plans, along with local good practice actions that can be taken in the short term.