Select Committee on Members Estimate Committee Third Report

3  Employment of staff

The current system

72.  Members need to employ staff as caseworkers, office managers, researchers and secretaries. The Member is the employer but the House sets out guidance and pay scales and pays staff directly under a standard contract. Until the end of March 2008, Members could employ the equivalent of three full-time staff with the maximum allowance for staff pay set at £90,505. As at 31 March 2008, there were 2,650 staff employed by Members. Up to 10% of the staffing allowance can be transferred each year into the Incidental Expenses Provision (IEP) for office costs. There is no maximum for the amount of IEP that can be transferred into the staffing allowance. Members are expected to deposit their staff contracts with the Department of Resources.

73.  The staffing allowance is available to meet the costs wholly, exclusively and necessarily incurred in the provision of staff to help Members perform their parliamentary duties. It is the Member's responsibility to ensure that staff paid from the allowance are employed to meet a genuine need, able and (if necessary) qualified to do the job and actually doing the job and that the resulting costs charged to the allowance are reasonable and entirely attributable to the Member's parliamentary work.[13]

74.  The current staffing allowance was established following the 2001 review by the SSRB. Initially different maxima were set for MPs depending on whether their constituency was in London or not. The 2004 SSRB review recommended that this practice continue and it recommended an increase in the allowance to allow the equivalent of three fulltime staff to be employed. The House agreed, however, that all Members should be entitled to the higher level of allowance while at the same time foregoing an increase in the IEP, and that up to 10% of the allowance could be used to fund constituency offices.

SSRB proposals

75.  In 2007, the SSRB concluded that "these arrangements for reimbursing expenditure on staff appear reasonably sound".[14] They noted that "the volume of casework appears to be growing inexorably".[15] The main SSRB recommendations on staffing were:

• the Staffing Expenditure ceiling should increase to allow MPs to employ the equivalent of 3.5 full-time (or equivalent) members of staff
• the ceiling on Staffing Expenditure for the equivalent of 3.5 full-time staff where all those staff are based outside London should be £96,630
• the ceiling on Staffing Expenditure for the equivalent of 3.5 full-time staff should be increased by £1,720 for each full-time equivalent member of staff based in London, up to a maximum of £102,650 where all staff are based in London.[16]

76.  The Members Estimate Committee agreed on 10 March 2008, in accordance with the decisions of the House on 24 January, that the staffing allowance for 2008-09 should be the figure of £96,630 (recommended in July 2007 by the SSRB as a 2007-08 figure for staff based outside London) uprated by 3.7% in accordance with the Average Earnings Index to £100,205; that this should take effect from April 2008; and that the timing of the implementation of the SSRB recommendation for a higher rate for staff based in London should be considered with other aspects of the Review of Allowances in July. Members have been advised not to make commitments beyond this.

Reports from the Standards and Privileges Committee

77.  Shortly after the House referred the SSRB recommendations to the Members Estimate Committee, the Standards and Privileges Committee produced a report concerning the use of the staffing allowance to employ relatives.[17] An element of the individual case concerned was the absence of records of work carried out by the relative employed under the allowance.

78.  The Standards and Privileges Committee has since produced two reports on the employment of family members and the Register of Interests. The Committee proposed a new category in the Register of Interests for family members employed and remunerated through the Staffing Allowance. This was agreed by the House on 27 March and took effect on a voluntary basis from 1 April. It will become compulsory on 1 August 2008.[18]

The Committee on Standards in Public Life

79.  In its 'Principles to govern a review of MPs' allowances', the Committee on Standards in Public Life said: "Members of Parliament should be able to select their own staff including, arguably and where appropriate, family members. But the need for each post should be clearly established and staff should always be employed against a contract setting out their duties. They should be able to demonstrate that they have appropriate skills for the job; and their salaries should be commensurate with their responsibilities, experience and skills. Observance of this should be auditable. Ideally all such payments should be made centrally and direct to the staff member concerned. In accordance with best practice, employment of all staff should be supported by a statement of objectives and by periodic appraisal."[19] The Chairman of the Committee on Standards in Public Life has said "the current ability of MPs to use public money to employ members of their own family is an unusual arrangement which might not be allowed elsewhere".[20]

What happens in other organisations

80.  The Committee has not identified any private, public or third sector model which is analogous to the employment of staff in support of MPs, but some further information about the practice in other bodies comprising elected Members is set out below.

The Scottish Parliament

81.  The recent review of allowances in the Scottish Parliament covered similar issues on staff employment. It recommended clearer provision for staff costs, with constituency MSPs normally able to employ two staff up to a total cost of £60,000 per annum. It also recommended a system similar to that in the House of Commons where the Parliament plays a central role in paying staff, setting pay scales, advising Members and administering the staffing system.

82.  The Scottish Review also tackled two issues which have come up in this review: whether the House should employ all Members' staff and whether MPs should be permitted to employ relatives. On the first point, the review concluded "…..the [Scottish Parliament] could be placed in a difficult position if it took on the employer role for Members' staff. It would not be possible … to monitor the performance of a member of staff or deal effectively with any breakdown in the working relationship between a member and an employee. It would also not be practical for Members to act as 'managers' of staff on behalf of the [Parliament]. Members should continue to employ their own staff."[21]

83.  The issue of employing relatives was also considered by the independent review in Scotland. It concluded "We do not consider it right to disqualify relatives from being employed purely on that basis …we believe that Members should take a cautious approach in considering whether or not to employ a close family member".[22] The review's solution was transparency through registration.

Experience in other parliamentary bodies

84.  The Committee has been told that staff working directly for elected members of the Greater London Assembly are employed centrally by the Assembly. About 68 staff—fewer than three per member—are employed in this way and they comprise about one tenth of the total GLA staff. Recruitment of staff to work for Assembly members is conducted through a policy of fair and open competition. Assembly members do not have the power to make appointment decisions but are able to review the job applications, listen to and observe selection interviews and give their views afterwards. Family members may apply, but would be expected to go through the same appointment process and be appointed on merit. Recruitment is to a specific post (e.g. as a personal assistant), with the recruitment pack specifying which Assembly member has the vacancy at that time. Staff can be moved, firstly within a party group. The GLA does not ask for applicants for these jobs to be politically neutral nor to be politically affiliated with the party they apply to work with and they do not enforce this contractually. The advertisement nevertheless makes it clear which member and party they will be working for, at least initially.

85.  Of other Parliaments, the Committee understands that the New Zealand parliament employs staff centrally in a similar way to the GLA and that Members are not permitted to employ relatives. In most other Parliaments there is no bar on the employment of relatives though there are exceptions to this general approach in the US Senate and the German Bundestag. The Committee has not been able to find a model elsewhere which combines central employment by Parliament with an individual Member's ability to appoint and direct his or her own staff.

Views expressed by Members

86.  The overwhelming view expressed to us by Members was a desire to retain the ability to appoint and direct their own staff. Some interest was expressed in the idea of the House employing Members' staff centrally. One view is that the current arrangement, with the House providing standard contracts, setting pay ranges, offering personnel advice and paying staff directly, comes close to central employment. In the survey of Members' opinion conducted by Hay for the Baker review of a new pay mechanism, 218 MPs responded to a question about whether Members' staff should be employed by the House, not by the Member. 35% of Members favoured such a proposal but 55% were against it.

Advice from the Department of Resources

87.  The Department has offered various models for how central staffing might be run—with Members' staff employed by the House of Commons Commission, a new statutory body or an employment agency. The Committee notes that there is also pooling of staff within parties, such as the Parliamentary Resources Unit.

88.  The Department of Resources has also revised its guidance to Members on the employment of staff. It has on several occasions drawn to the attention of the Advisory Panel on Members' Allowances the significant minority of Members who have yet to deposit their staff contracts with officials. We return to the issue of staff contracts in paragraphs 99 to 103.

Opinion of the Committee

89.  Much of the interest in MPs' expenses over the past few months was triggered by an instance of irregularity in employment of staff. MPs need the support of staff in Parliament and in their constituencies, who work as caseworkers, office managers, researchers and secretaries.

90.  MPs' staff are—almost without exception—very able, committed and professional employees, who work long hours at salaries which are sometimes below their market worth. MPs, however, are sometimes rather less than model employers. They have varying degrees of experience and aptitude in human resource management, and as they are frequently stressed by their own workloads and the complexities of juggling multiple commitments, they can be difficult people to work for. They rely heavily on the personal loyalty and dedication of their staff. We recognise that there is scope for improvement in standards of employment practice and return to this later.

CENTRAL EMPLOYMENT OF MPS' STAFF BY THE HOUSE

91.  Some have suggested that MPs' staff should be employed centrally by the House. The Greater London Assembly operates such a system, as do a few legislatures overseas. We have considered whether this is an alternative which the House of Commons might consider, and how such a scheme might operate in practice. Many Members have expressed their wish to retain the responsibility for selecting, appointing and directing their staff. We have been unable, however, to identify any model in which such responsibility can be combined with the House acting as employer.

92.  It is important to make the point that MPs themselves are not employees of the House, but rather independent office holders. Their role is to represent their constituents, and also fearlessly and independently to hold the executive to account, and—when they deem it necessary—to "rock the boat". The willingness to ask awkward questions, ruffle feathers and talk out of turn are qualities which the public often admires in an MP. It is vitally important to this work that their staff should be entirely and unambiguously committed to the individual MP and the causes being championed, rather than to the House of Commons as a corporate body. The value which MPs place upon their independence leads many to a concern that central employment of staff might undermine this: a large number of Members are opposed to this proposal.

93.  The only other model we identified when examining practice elsewhere was that of giving political parties the funding and responsibility for collective employment of staff to work for their MPs. For all the same reasons of protecting their independence, MPs might well consider this arrangement even more objectionable than employment by the House.

94.  Alternative models of employment is an issue to which the House may want to return at some future stage, but we do not recommend any change at this time.

EMPLOYMENT OF RELATIVES

95.  There has been public debate and concern about MPs employing members of their family or their partners. While such a thing might be virtually unheard of in most aspects of the public service, or indeed in large companies, it is entirely commonplace in small and family firms. In some ways, the culture of an MP's office operation is not unlike that of a small firm.

96.  We observe with confidence that many MPs' spouses working either in the House or in constituencies—or both, like the Member—are first class employees. Many of them work similar long hours to the Member, serving and making themselves available to constituents way beyond what could be expected of any other employee. They will often share with their spouse mutual knowledge of the work undertaken by the Member, knowledge of the constituency, and the requirement to live in two places. They are often very high calibre people who may have sacrificed promising careers elsewhere to help their spouse make a success of their parliamentary work, and in so doing accept salaries below their market value. So it would seem entirely perverse to rule out employment of some of the best employees who could possibly be found and who represent excellent value for taxpayers' money.

97.  If a relative is capable, qualified and able to do the job then there should be no restriction. But the MP should be able to demonstrate, as part of the practice assurance process, that the relative is genuinely carrying out the role, has a proper contract and relevant job description and is paid at a fair rate. This practice assurance will be a new form of scrutiny of MPs' actions in employing staff.

98.  Furthermore, in the interests of transparency and public reassurance, we welcome the recent change to the Register of Members' Interests proposed by the Standards and Privileges Committee and endorsed by the House, that the employment of relatives as staff should be fully disclosed in the Register of Members' Interests, together with their category of employment. This requirement, currently operating voluntarily, becomes mandatory from 1 August 2008.

IMPROVING EMPLOYMENT PRACTICE

99.  The House's Department of Resources has recently revised its guidance to Members on the employment of staff, although this has yet to be promulgated pending the outcome of this review.[23] This guidance reiterates the requirement to deposit with the Department appropriate staff contracts: a significant minority of MPs have yet to deposit their staff contracts with officials. The guidance also indicates that Members should keep more comprehensive records of work undertaken by their staff, their qualifications, hours of work, holiday and sickness records, and also annual appraisals, so that work practices within the House correspond more closely to practices in the public and private sectors.

100.  The guidance makes Members aware that the failure to deposit staff contracts and job descriptions, and to maintain proper records, might affect the payment of staff salaries directly by the House. Examining all of these aspects of good employment practice will be included within the scope of the work of the practice assurance teams described earlier.

101.  We believe that further support to Members as employers can and should be provided in future. This might include more support and advice with recruitment processes, provision of software for record keeping, and promoting even more readily available help and advice.

102.  There is a strong case for information about spending on Members' staff salaries being published in a more accessible way and sooner after the end of the financial year to which they relate. The SSRB recommended a change of name to 'staffing expenditure'. The Committee prefers 'staff salary budget'. The Committee will also seek ways to publish details of spending under this heading from 2009 before the summer recess, possibly in the Members Estimate Resource Accounts.

103.  We recommend that, for payments from the staffing allowance, it should be mandatory for Members to deposit staff contracts and job descriptions with the Department of Resources and that this should be rigorously enforced.

EMPLOYMENT OF STAFF IN LONDON: THE SSRB PROPOSAL

104.  As well as its proposal to increase the provision for MPs' staffing to the equivalent of 3.5 full-time staff, which was implemented with effect from 1 April 2008, the SSRB suggested a further increase in the Staffing Allowance of £1,720 for each full-time equivalent member of staff based in London. This was to be in tandem with a reduction in IEP in respect of London-based staff. The House remitted to this Review of Allowances consideration of the timing of the implementation of those recommendations.

105.  We understand that the SSRB wishes to ensure that MPs with staff in their constituency offices are not disadvantaged compared to MPs who chose to have staff on the parliamentary estate, since the cost of the latter is borne by the House administration and does not come out of the MPs' allowances. We respect the need to ease pressure on, and recognise the costs of, limited space in the Palace of Westminster. Proposals with similar objectives were advanced in the SSRB report of 2004 but rejected by the House.

106.  We believe that some of the support which many MPs need from their staff really has to be provided on site in the House. So, while there may be a case for discouraging the location of excessive numbers of staff in the House, we believe that the idea of creating an incentive for MPs not to employ any staff at all in Westminster is ill-conceived.

107.  We are advised by the Department of Resources that during the period (2002-05) when variable Staffing Allowances did operate on the basis of numbers of employees based in London, there was a degree of dispute, controversy and confusion, not least where staff worked in both places at different times.

108.  Elsewhere in its report the SSRB proposed a reduction in the allocation of constituency office resources in respect of each member of staff a Member employed at the House of Commons.[24] By proposing further finance for London staff on the one hand, but reduced constituency office resources in respect of Westminster-based staff on the other, the SSRB could be said—in a sense—to be proposing giving with one hand but taking away with the other. We believe that these recommendations—one increasing Members' resources and the other reducing them—should be balanced out and not implemented.

109.  We recommend that the SSRB proposal that Incidental Expenses Provision should be abated for every work station in London should not be implemented.

110.  We recommend that no further steps should be taken to implement the SSRB proposal for a further increase in the Staffing Allowance for each full-time equivalent member of staff based in London.

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13   The Green Book p 20. Back

14   SSRB, para 5.12. Back

15   SSRB, para 5.20. Back

16   SSRB, recommendations 20 to 22. Back

17   Standards and Privileges Committee, Fourth Report of Session 2007-08, Conduct of Mr Derek Conway, HC 280. Back

18   Standards and Privileges Committee, Seventh Report of Session 2007-08, Employment of family members through the Staffing Allowance, HC 436, para 5. Back

19   CSPL principle, 22. Back

20   Standards and Privileges Committee, Seventh Report of Session 2007-08, Employment of family members through the Staffing Allowance, HC 436, appendix 2. Back

21   Scottish Review, para 5.8. Back

22   Scottish Review. paras 5.10 and 5.13. Back

23   Members of Parliament as Employers-good practice guide. Back

24   Recommendation 24: We recommend that Incidental Expenses Provision should be renamed Other Office Expenditure and that the ceiling be reduced by £2,500 for each member of an MP's staff with a workstation on the parliamentary estate. Back

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Prepared 25 June 2008