62. Extract from ACA Repayment Appeals
by Sir Paul Kennedy, January 2010: Ms Julie Kirkbride[200]
The ACA Review points out that you are married to
another MP, Andrew MacKay. You designated your constituency home
as your second home. He nominated it as his main home, and the
flat which you shared in London as his second home. That enabled
you to claim the expenses relating both properties against ACA,
and you did so, your claims being at or close to the full annual
allowance. The Review describes this as "a financial benefit
which appears unintended under the Green Book rules, and as such
to the principles governing it". It is said that had
you made different designations each of you might reasonably have
claimed up to 2/3 of the full allowance on a shared second home.
The Review has therefore concluded that each of you was overpaid
by 1/3 of the maximum ACA for each year of the review period,
a total of £29,243.
The Review goes on to point out that in May 2008
you extended the mortgage on your designated second home (your
constituency home) to fund the construction of an additional bedroom,
mainly for the use of your brother to provide childcare for your
family. The total interest recovered under ACA in relation to
the increase on the mortgage amounted to £2,584.26, and the
Review states that as the accommodation was for a non-dependant
family member the transaction was conflicted. It is clear from
paragraph 8 of the Review that such a transaction would be regarded
as conflicted because it involved a close family relative.
In your Grounds of Appeal to me you take a number
of points in relation to your choice of designated home. You say,
rightly, that nowhere in the Green Books during the review period
was it suggested that married couples should consider their ACA
claims as joint, and capped at a lower level than the maximum
amount. It was only in May 2009 that the Rules were changed to
require Members married to each other to nominate the same main
home, and restricted them to claiming one person's Personal Additional
Accommodation Expenditure (the successor to ACA) between them.
You submit that it can be inferred that you and your husband were
not acting contrary to the rules until that change was made. You
also say that what you did was done openly and with the knowledge
of the Fees Office. When you married your husband he took advice
from the Head of the Fees Office, and you, as a new Member, acted
on that advice. You refer to the doctrine of Estoppel, but it
has nothing to do with the issues with which I am concerned. Even
if the Fees Office gave bad advice, it cannot have rendered valid
and acceptable an invalid claim. I accept of course that the Fees
Office did know what was going on, because it authorised payments
in response to your claims, and I accept that in one sense the
Review decision is retrospective, but I find it a little difficult
to accept your suggestion that your choice of designation represented
reality because your husband's family live in or near your constituency,
hence making it his natural home, whereas you are based in London
as the principal carer for your child.
To my mind the fundamental reason why the arrangements
which you made cannot be regarded as acceptable is that they lost
sight of the purpose of ACA, which was to assist Members to fund
the cost of accommodation when they needed a second home in order
to fulfil their duties. It was never intended to relieve them
of the costs of their main home, and you operated it in such a
way that you achieved that result. Although you have challenged
the approach adopted by the Review, I do not understand you to
challenge the figures if that approach is found to be correct.
I turn now to your appeal in relation to mortgage
interest on your extended mortgage. You explain that your second
home (your constituency home) had only 2 bedrooms. By 2008 you
needed an extra bedroom to accommodate your child's carer, and
at that time you were lucky enough to be able normally to call
upon your brother to provide that service at week-ends and in
the holidays. The edition of the Green Book which was current
at that time stated that ACA was not available to recover -
"interest on any additional mortgages, advances
or loans secured on the same property unless required for the
repair or improvement of that property".
It seems to me that in your case there was no problem,
because the additional loan was used to improve the property,
and you tell me that before the work was undertaken you explained
to a senior Accounting Officer in the Fees Office what you proposed
to do and why. He then, as you put it, "authorised
the extension of the mortgage".
I accept that by 2008 there were restrictions on
transactions with family members. ACA could not be used to meet
the costs of a mortgage or for leasing accommodation from a partner
or family member (see paragraph 3.3.3 of the Green Book), but
I see no reason why that should have been extended to prevent
you from recovering the costs of an additional mortgage required
to enable you to provide a child carer's bedroom just because
at that time it was envisaged that the child carer would normally
be your brother.
Accordingly, I am satisfied that there are special
reasons in your individual case showing that it would not be fair
and equitable to require repayment of £2,584.26. I find no
such reasons in relation to the sum of £29,243. As you have
already repaid £1,811.64 the balance now recommended for
repayment is £27,431.36.
To the limited extent indicated I would allow your
appeal.
200 Published as Appendix 2 to the First Report of
the Members Estimate Committee, Session 2009-10 (HC 348)
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