Select Committee on Members Estimate Committee Third Report

9 - Implementation of this review

Decisions for the House

254.  We suggest that the House be invited to consider one motion in the name of the Leader of the House and others on these lines:

That this House welcomes the …. report of the Members Estimate Committee and approves the recommendations nos …. relating to …. and instructs the Members Estimate Committee to take the necessary steps to implement them.

255.  Amendments could then be moved to canvass other options which this Committee has not recommended. If the House agrees to any such amendment, the Committee will undertake the necessary work to implement that decision and bring forward a technical resolution to give effect to it in time for implementation.

Possible implementation timetable

256.  The Committee recognises that—once the House has reached decisions on this review —it will take time to implement those decisions. Most of these can be carried out on the authority of the decisions the House takes, but some may require a further technical resolutions to be approved by the House nearer the time. The priority is clearly to improve the audit and assurance regime and we would like to see those changes in effect from 1 April 2009. Any structural changes to the allowance system will take longer to implement and we envisage them coming into effect from 1 April 2010.

257.  The Committee suggests the following timetable for implementation of such recommendations of this report as are agreed by the House:

1 April 2008
New £25 receipts threshold comes into effect
Voluntary registration of employed family members

July 2008
Decisions by the House
Implementation of the recommendation that furniture, household goods and improvements to property should no longer be reimbursable - so no expenditure incurred after 3 July 2008 would be reimbursed

1 August 2008
Mandatory registration of employed family members

1 October 2008
New rules on mandatory deposit of staff contracts and better staff record-keeping come into effect

Spring 2009
Pilot of new practice assurance/health checks

1 April 2009
Start of new practice assurance/health checks
Receipts threshold reduced to zero
New rules on operation of Communications Allowance come into effect
Change in names of allowances
Start of 3-year freeze on level of Communications Allowance
Increase in the London supplement perhaps linked to change in eligibility of outer London MPs for ACA
New basis of calculation for winding up allowance

Summer 2009
Publication of Members Estimate Resource Accounts including details of Members' staffing numbers and costs

1 April 2010
Start of new NAO audit (for 2009-10)
Start of any new overnight costs arrangement
Start of change in eligibility of new Members representing outer London constituencies for overnight costs
Start of central funding of constituency offices

End of the next Parliament
New basis of calculation for Resettlement Grant
Change in eligibility for overnight expenses of MPs representing outer London constituencies

Names of allowances

258.  The Committee has referred in paragraph 9 above to the need to distinguish between MPs' pay, the resources needed to do the job and costs which may be reimbursed. The SSRB has pointed to the need to change the vocabulary to make clearer the purposes of these different types of public spending. In particular the word 'allowance' is misleading. While there seems to be general agreement about this, there is less consensus about alternatives. We recognise the need to reconsider the description of allowances available to Members, a matter best decided when the details of the new system are fully worked out for implementation on 1 April 2009. In the table below are set out the current names, the SSRB recommendations and some possible solutions.
Current SSRB recommendation Proposal
Staffing allowanceStaffing expenditure Staff salary budget
Incidental expenses provision (IEP)Other office expenditure Office costs or budget
Communications allowanceCommunications expenditure Communications budget
Additional costs allowancePersonal accommodation expenditure Overnight costs
Winding up allowanceWinding up expenditure Winding up budget

Conclusion on SSRB recommendations

259.  The House referred specific SSRB recommendations to this Committee on 24 January. Most of them have been covered in this review and some are the subject of specific recommendations. For completeness, we set out below the Committee's conclusion on each of the recommendations referred by the House. In each case the SSRB recommendation is set out first in italics.

Recommendation 17: We recommend that the House agree that the ceiling for reimbursement of unreceipted expenditure be set at £50 per member per month.

260.  The principle of this recommendation has already been accepted but the threshold has been set by this Committee at the lower level of £25 from 1 April and we recommend a further reduction to zero from 1 April 2009—see paragraphs 6 and 47.

Recommendation 18: We recommend that the House of Commons request the National Audit Office to audit the expenses of a representative sample of MPs each year.

261.  We support acceptance of the principle of this recommendation but put forward (in paragraphs 64-71) a more radical approach on audit.

Recommendation 19: We recommend that the Staffing Allowance be renamed Staffing Expenditure, and Temporary Secretarial Allowance be renamed Temporary Secretarial Expenditure.

262.  We recommend acceptance of the principle that the vocabulary used for allowances should be improved to give a clearer impression of their purpose but consider 'staff salary budget' is more appropriate.

Recommendation 20: We recommend that the Staffing Expenditure ceiling should increase to allow MPs to employ up to 3.5 full-time (or equivalent) members of staff.

Recommendation 21: We recommend that 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.

Recommendation 22: We recommend that 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.

263.  The House itself agreed this recommendation on 24 January, subject to the decisions of this Committee on timing and administration. On 10 March, the MEC agreed that the staffing allowance for 2008-09 should be the figure of £96,630 (recommended in July 2007 for 2007-08 by the SSRB 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. In this report, balancing recommendations 22 and 24 together, we propose no further action on either recommendation.

Recommendation 23: We recommend that office and 'surgery' lease or rental costs should be met in full up to a maximum area of 800 square feet, this area to be reduced by 100 square feet for each member of an MP's staff who is based on the parliamentary estate. Before renting or leasing premises an MP must obtain a certificate from an independent chartered surveyor stating that the premises are suitable for the purpose and that the cost is reasonable in relation to typical office premises in the constituency.

264.  We accept this recommendation (see paragraph 130) but envisage that Members who choose not to make use of this new scheme would continue to claim for constituency office costs under the Incidental Expenses Provision.

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.

265.  For the reasons given in paragraphs 108-110 balancing recommendations 22 and 24 together, we propose no further action on either recommendation.

Recommendation 25: We recommend that the ceiling for Other Office Expenditure (before any reduction for staff based on the parliamentary estate) should be £13,839.

266.  For the reasons given in paragraphs 108-110 we do not propose acceptance of this recommendation.

Recommendation 26: We recommend that the Communications Allowance be renamed Communications Expenditure and be confirmed at £10,000 a year. It should be uprated in April each year in line with movement in RPIX.

267.  We propose acceptance of the change of name and basis for uprating the Allowance but, instead of reducing the IEP, propose a three-year freeze on the level of the Communications Allowance—see paragraph 142.

Recommendation 27: We recommend that partners of MPs who are named in the PCPF as sole beneficiaries should be entitled to the same travel arrangements available to spouses and civil partners.

268.  For the reasons set out in paragraph 170 we do not propose acceptance of this allowance.

Recommendation 28: We recommend that Additional Costs Allowance should remain at its current rate and should be renamed Personal Accommodation Expenditure.

269.  We have considered several options for the future of the Additional Costs Allowance and made a recommendation for change. These options are set out in paragraphs 218-225.

Recommendation 30: We recommend that, with effect from the general election after next, Resettlement Grant should be paid at a rate of one month's salary for each year of service as an MP, up to a maximum of nine months' salary, to MPs who lose their seats at a general election or whose seats disappear as a result of boundary changes.

270.  We put forward instead a different way of calculating the Resettlement Grant—see paragraphs 251-253.

Recommendation 31: We recommend that the Winding Up Allowance be renamed Winding Up Expenditure and that, after the next general election, the ceiling be calculated as one third of the relevant annual Staffing Expenditure, plus one third of the limit on Other Office Expenditure and one third of the actual annual office rent or lease claimed by each MP concerned.

271.  This recommendation follows from other SSRB proposals and we support it.

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