Mr Andrew Mackay and Ms Julie Kirkbride - Standards and Privileges Committee Contents

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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