8 Costs
92. The costs of the House becoming the employer
of Members' staff cannot be predicted with certainty, and to some
extent would depend on exactly how the proposal was implemented.
For example, raising the employer's contribution to the pensions
of Members' staff to the same level as for House staff (from about
10% to 22%) would cost about £6 million per year,[80]
and a case can be made for this additional expenditure, but it
is not part of our proposal.
93. An obvious additional cost would be extra human
resources and administrative staff to manage 2,700 employees.
Ratios of HR and administrative staff to employees typically vary
from 1:50 to 1:100,[81]
which in the case of Members' staff would mean from 27 to 54 staff—or,
taking account of the three staff of the Personnel Advice Service
who currently offer employment advice to Members, an additional
24 to 51. Assuming an average grade of civil service Higher Executive
Officer (or House of Commons B2 grade) at a cost of £40,000
per annum per member of staff (including pension costs and ERNIC),
the total extra staff cost alone would be between £1 million
and £2 million per year. Given that Members' staff are managed
in small teams, have a high turnover and are scattered throughout
the country, we would expect the cost to be towards the upper
end of that range. There would also be an additional burden on
the Legal Services Office.
94. The potential costs of Employment Tribunal proceedings
are even less predictable. Each Tribunal case which goes to trial,
whether won or lost, is estimated to cost about £8000 in
legal fees, but the more significant aspect of cost would be any
damages or the need to pay off potential litigants. Employment
Tribunal awards (unless based on discrimination) are capped at
£66,200, and settlements are commonly in the £15,000-£30,000
range. As indicated above, the House has deeper pockets and is
at least as vulnerable to reputational damage as individual Members,
so the number of cases and size of pay-offs could increase from
their current levels, though our proposal for Members to indemnify
the House could reduce the cost to the House.[82]
95. Another major cost would be that of staff whose
employer has left the House but whom it has not been possible
to reassign to another Member. It is difficult to estimate the
cost, but in an election year with, say, 150 Members leaving the
House there could be 600 staff to be reassigned. Assuming that
in the first month half were successfully reassigned the initial
wage bill for the remainder would be about £1 million per
month. This would diminish over time, but the total cost would
be significant. Of course, the number of such employees would
depend on political circumstances and the willingness of new Members
to take on existing staff.
96. The requirement for equal treatment in areas
such as pay would be likely to result in some levelling up of
pay, but it is not possible to quantify this cost.
97. Other additional costs would include the new
statutory body, health and safety audits of premises and a possible
increase in overtime payments if hours were better audited.
98. We conclude that the additional costs of the
House employing Members' staff directly would be high.
80 Information from the Department of Resources. Back
81
Information from the Department of Resources. Back
82
Para 41 above. Back
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