UNCORRECTED TRANSCRIPT OF ORAL EVIDENCE To be published as HC 1484-vi

HOUSE OF COMMONS

ORAL EVIDENCE

TAKEN BEFORE THE

COMMITTEE ON MEMBERS’ EXPENSES

THE OPERATION OF THE PARLIAMENTARY STANDARDS ACT 2009

THURSDAY 3 NOVEMBER 2011

LAUREN EDWARDS, MAX FREEDMAN, LUKE MARCH, SIAN NORRIS-COPSON and LISA TOWNSEND

Evidence heard in Public

Questions 312 - 400

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Oral Evidence

Taken before the Committee on Members’ Expenses

on Thursday 3 November 2011

Members present:

Adam Afriyie (Chair)

Guto Bebb

Cathy Jamieson

Mr Edward Leigh

Priti Patel

Mr Nick Raynsford

Joan Walley

Stephen Williams

Examination of Witness

Witness: Luke March, formerly Compliance Officer for IPSA, gave evidence.

Q312 Chair: Luke March, welcome to our Committee and our inquiry. The context is that we are reviewing the Parliamentary Standards Act 2009 as amended in 2010. We are considering the overall aims of the Act and its operation. Obviously, IPSA is instrumental in, we hope, the delivery of the aims of the Act. Clearly, the compliance function, the regulatory function and the administrative function of IPSA are quite important for any conclusions and recommendations that we make. Thank you for sparing the time to appear before the Committee. First, could you give us a brief overview of your experience and roles in compliance?

Luke March: Certainly. Before I do that, I apologise for my voice. I didn’t have a voice two days ago, so if I get a bit hoarse, I’ll take another sip of water and carry on.

My first role as a compliance director was back in 1988, when I was appointed compliance director of the retail division of TSB Group-before it became Lloyds TSB, of course. I then became company secretary of that group as well. Thereafter, I became the first compliance director of British Telecom, BT Group. I later became its corporate governance director. Then I became chief executive of what was then the non-statutory mortgage regulator, regulating some 13,000 firms. That became part of the Financial Services Authority. Then I became group compliance director for Royal Mail, from which I retired last year.

Q313 Chair: Fantastic. We cannot argue that you don’t have experience. Can you explain why you decided to resign from your role as compliance officer at IPSA? I know that you were very excited about getting the role initially.

Luke March: Yes indeed. There were a number of things. In summary, it did not turn out to be the role that I was expecting to receive. When I arrived, there was an extraordinary climate of suspicion towards the compliance role. It was almost as though they had tried to pretend it had not existed. I was the first substantive appointment as compliance officer, some months after the Act was passed. I did not pick up on the reason for that, but I began to realise that perhaps they were not really interested in the role at all.

The next trigger in terms of what I noticed-much later, of course-was that I discovered that, as explained in the explanatory notes to the Act, I was not supposed to be an employee, yet that is a very key part of ensuring the independence of the role. I did have a contract of employment, so I think that might be an indication that they had not realised that perhaps I should have been a more independent person than I was-legally, as it were.

The next thing was the lack of support. These are very small things, but when you add them all together, you think, "Goodness me, is it really worth the hassle?" I was appointed on 31 March, as you know, which slightly puzzled me at the time, because I was away for most of April on holiday in India, so I thought, "This is very odd." I had not noticed why it was or why it was in the contract, but of course I realised later, as two and two comes to four, that it was the last day of the financial year and, obviously, for the accounts there had to be a compliance officer. I am guessing, because I never actually asked anyone that question. You have probably read the five or six-page report that I have in the accounts based on one day’s work.

Another thing was that my appointment was never announced, which slightly puzzled me. I did actually ask the question, "Would you like to announce my appointment?" In the end, IPSA would not announce it; I announced it. Of course, looking back at what has happened since, they did not hesitate to announce my resignation when I left.

Then I became frustrated by the processes. It appeared to me, as you can guess, having worked in big companies and big organisations-

Q314 Mr Leigh: Could you speak up a bit?

Luke March: I am sorry. It is probably my voice. I was frustrated at the processes and, having worked in large companies, I am well used to processes, but it all has to be proportionate and relative, and based primarily on outcomes and outputs and so on. There seemed to be more obsession with the process than there was with the result, and that was another frustration I had. Bearing in mind I was doing the role on a very part-time basis, I just had to get on with it.

Q315 Chair: From what you are saying, it sounds as though the compliance officer was appointed almost as an afterthought or as a last-minute measure at the end of the year, rather than as a carefully thought-about decision in advance.

Luke March: I don’t know. Perhaps they realised that they had to have a compliance officer by 31 March. Whether I dragged out the process earlier on, I do not know; but that is for IPSA to comment on.

Chair: Thank you. Priti, can I ask you to pick up on the questions regarding independence and the compliance function, which Luke has already touched on?

Q316 Priti Patel: Mr March, I have had the privilege of working with compliance officers in the corporate sector, so I can thoroughly relate to the corporate experience that you have had, which you highlighted.

I would like to go back to the point you touched on about your resignation and, in particular, independence. Compliance officers in large corporations are independent and impartial, and in many organisations they are there also as an adviser, to give good counsel and advice. In what sense were you independent of the IPSA board? Did you feel independent? Did you get any sense that it respected your independence in what you were there to do?

Luke March: Yes. I certainly felt independent of the board; as you know, the function is independent. But there were moments when I felt that questions were being asked-not particularly subtly-about what I was doing and how I was doing it. That was the sort of thing I was beginning to become aware of.

To answer your question about comparisons with the corporate sector, which you clearly know about, I felt more independent in terms of my influence when I was in the corporate sector than when I was in IPSA.

Q317 Priti Patel: We took evidence from IPSA’s interim compliance officer, who effectively said that he is functionally independent. What is the reality in practice of being functionally independent versus the independence that you would have demonstrated in the corporate world, which you have just highlighted?

Luke March: If you relate it to the role of IPSA, because in a sense IPSA is both a regulator and a service provider, I identified that my independence was a bit quirky-let’s put it that way.

Thinking of the cases that I dealt with, I want particularly to highlight the cases I started that have recently been announced. I had started 38 investigations, and when I left, as far as I can remember, about 22 MPs had a case to answer, as I would describe it. The results of the cases that have come out since almost show a particular problem-well, they do to me; I do not know whether you have read the results of those cases. The breaches have been confirmed, but repayments have not been requested. I took a view-I think we have discussed this previously; I certainly discussed it with many MPs and others-that if an MP or anyone receives an amount to which they are not entitled through any expenses scheme, the least you can do is repay it. Isn’t that most basic? I had a lot of difficulty with that, because in relation to some of the things that we were talking about, the sums were very small, as you will be aware; they were quite de minimis. Still, as far as I was concerned, I have not heard a single person disagree with that principle, apart from IPSA, obviously.

Q318 Priti Patel: To explore the actual cases, which we also discussed with the interim compliance officer, to what extent were you free to determine the criteria for resolving and investigating cases?

Luke March: You will have seen the guidelines for the investigation process. I suppose they were one of my frustrations, because the cases that I was talking about are very basic, elementary and straightforward. I did not need a process like that to drive me, and certainly you, scatty.

Q319 Chair: Who designed the process?

Luke March: It was designed by IPSA in consultation with you, I think-with Members and others. In a sense, going forward, IPSA should not be designing a process for the compliance officer. The compliance officer should guide the process and consult IPSA. That is how it should work. I felt as though my hands were tied behind my back because of a process that was completely disproportionate to the issues that I was looking at.

Q320 Priti Patel: As a result of the process itself, did you ever see your role-dare I say this-as advising MPs on how they should be within the rules, or on anything of that nature?

Luke March: It was not my role to do that, but as you can guess, I did find myself doing it from time to time. I can think of various cases where I told MPs that if they did what they were suggesting they were about to do they would be rapped on the knuckles pretty fast. For example, I noticed from an MP’s expenses-I was actually looking at something else in relation to him, or was it her?-that they had claimed to go from their constituency to here, which is normally permitted, on what I assumed to be parliamentary business. I then noticed that they made the journey back to their constituency a fortnight later. My brain said, "I wonder whether they went on holiday," and of course they had. Do you see what I mean? I told them that I had noticed and said, "Don’t do it again. You are not helping yourself."

There was another case where somebody was claiming for a number of constituency offices, which, as you know, you are entitled to do. I asked him why he needed so many constituency offices. In one particular case, he went there just to pick up the mail. He never saw anyone there and he never sat anyone there. I told him that it was irresponsible and a waste of public money. Things like that happen. I am afraid I do not hesitate when something is so ridiculous.

Q321 Priti Patel: During the investigation process with regards to cases, at what point did you publish the names of Members of Parliament?

Luke March: I personally never published any names because I had not got to the end of what I call the first stage of the process, as it was then, which was basically to establish the facts. In a sense, that is something that I had done when I left. I had virtually got to the end of the whole process and I was very close to announcing the final situation.

Q322 Mr Raynsford: You have told us about your previous experience. The question I want to ask arising from that is are you aware of any other organisation that structures its compliance function in the same way as IPSA?

Luke March: As a regulator?

Mr Raynsford: Yes.

Luke March: No. I will answer that in the context of a regulator doing any service work for the individuals it regulates, which is what I call the service provision bit. I identified a huge conflict in that: are you a regulator or a provider of services? It does not work, so the answer to your question is that the compliance role in a regulator is normally in the enforcement division. That is certainly so from my experience of many regulators.

Q323 Mr Raynsford: We had a previous witness-you may not have seen their evidence because I do not think that it has been published-who said that IPSA’s compliance officer is effectively an investigations officer.

Luke March: Yes, I did see that, but it is a bit better than that. I would describe it more as an ombudsman or an adjudicator. I am talking about an adjudicator position such as the one in the Inland Revenue.

Q324 Mr Raynsford: But one of that witness’s points was that the compliance officer should rightly have a role advising the board and advising Members of Parliament about their claims. To do that the compliance officer clearly has to have a combination of independence and the sense of being part of the organisation.

Luke March: Yes, and as I was just saying, as an enforcement director, which is the equivalent role in any other regulator, you are, more often than not, a member of the board and you would, therefore, be doing that. You would also get involved in advising. All the policy part of a regulator, actually, would be involved in advising the authorised people about how they should behave.

Q325 Mr Raynsford: In your view, is there any reason why the compliance function in IPSA could not operate on that basis?

Luke March: With IPSA retaining all its existing responsibilities? That might be a bit tricky. But it certainly needs to be closer to the whole organisation.

Q326 Mr Raynsford: Closer to the board?

Luke March: Correct.

Q327 Joan Walley: I think in response to Priti Patel’s question you used the word "quirky" to describe the situation whereby IPSA is both regulator and administrator. You have concentrated on that just now, but what other organisations operate in the same way? Surely there is a conflict of interest, so how can it be resolved properly?

Luke March: The simple way, of course, is separating things, so that the service provision work is actually done by another organisation. That could be done anywhere, quite frankly. I think that I made the suggestion in a previous discussion with you that it could happen in the House, as long as there was an independent regulator who regulated the service provision part. That is what the regulator has to do; they have to regulate the provision of the service, which is the payment of expenses. The payment of expenses can be outsourced. Many public companies outsource their payroll, because that is what this system is-a payroll and expenses system. As you probably know, I chair the board of a hospital. We have a payroll and expenses system. It is fairly straightforward.

Q328 Joan Walley: You can envisage that it would not necessarily have to be independent of the House?

Luke March: It does not need to be independent of the House, as long as it is properly regulated by somebody who is outside the House. That is the important part.

Q329 Mr Leigh: What do you think of the taxpayer’s value for money?

Luke March: In respect of what?

Mr Leigh: In IPSA.

Luke March: The whole of IPSA?

Mr Leigh: Yes. Just give us your view.

Luke March: From my commercial experience and even from my public sector experience in the NHS, IPSA is expensive, but that is probably because the rules are so prescriptive. I think that is the issue. It has been said by others that IPSA’s actual system is a very common database system. But as we all know, it is when you start playing around with systems that things can get a bit awkward and can become very expensive to run. So yes, compared to any other payroll and expenses system that I know, IPSA is Rolls-Royce.

Q330 Mr Leigh: It is a combination of the prescriptive nature of the rules and-presumably-the fact that they check and verify every single claim. If IPSA moved away from that and had a sort of risk-based validation, do you think that it could fulfil its statutory obligations under the Act?

Luke March: I think that it could because, in a sense, the system is so good. I will give you an example. The majority of the cases that I completed and that have now been announced were all to do with websites. What a minor issue that is. But it was a breach. I identified it as a breach simply by pressing keys on a system-I did not press the keys, but IPSA did-and that identified all the MPs who had claimed for their websites. It did not take very long, because there were not all that many of them, for us to look at every single website and to identify the breaches. That sort of thing can be done very quickly.

Q331 Mr Leigh: As you know, IPSA publishes bi-monthly and that, of course, could be open to misinterpretation. Do you think that that could undermine public confidence in Parliament?

Luke March: I don’t know, actually.

Q332 Mr Leigh: For instance, if it was real-time publication-

Luke March: Real-time, I should think, is horrendous to manage.

Q333 Mr Leigh: So we can’t do that. How do you overcome that then?

Luke March: You don’t have to publish every other month. You could publish quarterly or whatever is the right way to do it. It is the amount of information that you are publishing that matters. I don’t know the amount of information that needs to be published, because comparing MP with MP is quite difficult and one area that is, of course, missing, and that I identified quite quickly, is that your expenses in the House here are not included in that. Some of you do not have constituency offices at all and therefore, in my words, you are "cheap", and you know how that can be interpreted, misinterpreted or whatever. If you are going to do this properly, you should actually have the total expenditure for your role as a Member of Parliament in one place, so it is up to you how you resource it and where you invest-either in the constituency or here.

Q334 Mr Leigh: There are some supplements payable by IPSA-for instance, to London MPs-which are flat rate and taxable. Did you come across any compliance problems that you could share with us?

Luke March: No, I do not think I did. There is something teasing the back of my mind, but I cannot remember what it was. I am sure there is something, but I cannot remember it.

Chair: Cathy, would you like to pick up on the complexity or the lack of complexity of the rules?

Q335 Cathy Jamieson: I have a few questions, but I will try to keep them as brief as I can. First of all, I would be interested to know what conclusions you arrived at regarding, overall, the rules of IPSA’s scheme on the basis of the cases that you investigated; in particular, whether you thought they were too complex.

Luke March: It is a question of the definition of the word "complexity".

Q336 Cathy Jamieson: Were they unnecessarily complex?

Luke March: My view was that the rules were too prescriptive-more prescriptive than necessary. I always took the view that, provided you could prove that you were doing something in accordance with your duties as a parliamentarian, then that was a valid claim. I have always hoped that expenses could be capped, so that you had a clue as to how much you might be allowed to claim for. But within that, provided you could prove with evidence-the key thing is evidence-that it was in accordance with your parliamentary duties, then I personally could not see any objection to that.

Q337 Cathy Jamieson: In picking up the point that you made about rules being too prescriptive, what specifically would you suggest would help to simplify that process? In particular, would an extension of the supplement, such as the London area living payment that is already in operation, be one of the ways in which that might be done?

Luke March: It could be done like that, provided you can show that you actually incurred that cost. That is always the difficulty with allowances, isn’t it? You should not get it as of right unless you incur something. One that I can think of, which I do not think has been settled, is that if an MP is lucky enough to own accommodation in London, I just find it daft-that is the only word I can use-that they are not allowed to live in it. In other words, you have to rent something else and then rent that one out. I struggle with the logic. Do you see what I am thinking?

Cathy Jamieson: I think we all see.

Luke March: Perhaps I should have the answer to that, but I have never been able to work that one out. Another one-which I know is controversial, but I struggle with it because I think I know a bit about how you work and the pressure under which you operate-is whether you are travelling first or second class in rail fare. My view is that so long as there is a cap and everyone knows what that cap is, how you travel is entirely up to you as far as I am concerned. You could travel by car or by plane, so long as you do not incur a greater cost. It would have to be averaged out across where you live and things like that. Another one is about staffing, I suppose. Should we care whether you employ four staff at £30,000 a year, or two staff at £60,000? I could not care tuppence, quite frankly, so long as you do the job within the cap, if you see what I mean. How you do your work is entirely up to you in my book.

Mr Leigh: Would you like to become chairman of IPSA? [Laughter.]

Chair: I think you can ignore that question.

Q338 Cathy Jamieson: Thank you for your straightforward language, which I think my constituents would absolutely understand, and that is very important when dealing with these things. I wonder if I could just press you on another couple of points. In your view, did you think that MPs were generally complying with IPSA’s rules? Are you concerned that IPSA may want to move to a claim system based on the discretion of an MP without making the system less complex? If that is making sense.

Luke March: To answer your key point, MPs were obeying the rules. The incidents that I came across were ignorance more than anything else, because the rules are so prescriptive. But do not forget-again, this is something that I would have had difficulty with IPSA about in terms of its most recent announcements on the results of those claims and cases-it is the MP who is accountable for submitting their expenses. IPSA has absolutely no responsibility for that. This takes us back to the checking. If IPSA does not check anything, you are fully responsible, and, in a sense, you are fully responsible anyway for your claims and for proof of them. Don’t you think that’s right?

Q339 Cathy Jamieson: The key area that we are keen to tease out is whether there is something in the system or in any potential changes to it. How would we minimise the likelihood of MPs making honest mistakes and subsequently being accused of wrongdoing?

Luke March: By simplifying the rules. Easily. Everyone thinks that means it will be a free-for-all again. No, there would not be a free-for-all, because the enforcement division, as with any other regulator, would be on you, frankly, like a sack of potatoes. It would investigate, do various checks and sample checks, as is the case with every other regulator and compliance officer, and as I have done in other places.

Q340 Guto Bebb: I want to play devil’s advocate in relation to your comment about having a cap within which an MP can do whatever he or she wants. Is there not a danger that, by giving an MP that flexibility and that cap, they will spend up to the cap?

Luke March: There is always that danger. But do not forget that you have to produce the evidence, that your evidence will be in public and that your constituents will have a field day. On the claims that I rejected from the many that I looked at-from the 38 down to the 22, or whatever the figure was-that was because I could tell that political opponents were trying to have a field day on things that were absolutely nonsensical. So yes, I think you will be even more accountable than you are today. But if you can justify it to yourself-that is the key part-I think you can justify it to every newspaper, in addition to your constituency.

Q341 Mr Raynsford: What is your overall view of the effectiveness of IPSA as an organisation and of how far it has satisfied its statutory obligations?

Luke March: As you know, it had to put in a comprehensive expenses system in a very short time after the public backlash in the past. With all the will in the world, I do not think that anyone could have done it much quicker than it did. You can argue with hindsight in all sorts of ways as to whether it is the right system, but at least it is a system and a robust system. I think it has undertaken its statutory objectives in the most sensible way it can.

Q342 Mr Raynsford: One of those statutory objectives is to enable MPs to do their parliamentary functions in a cost-effective and generally effective way. Do you think that really is satisfied?

Luke March: I think I have expressed my views about the cost-effectiveness-I think it probably is not. In terms of enabling you to do your work, I met every single MP who asked me to meet them and in a number of cases I could not resist saying, "Take me through the system," because I had seen the system from the IPSA end, but not from the MPs’ end as to why they would struggle with it. All I can say is that it was the most horrendous experience. I do not think they were doing it deliberately just to make it difficult for me, but they were struggling. You always have that when you are not used to an IT-based expenses system. I have to admit that I really prefer a paper-based system. Nobody has managed to get this quirk sorted out with IT systems, because you still need the evidence and the evidence is in paper. Those of us who have been in banks and other heavily regulated businesses know that the moment you put the invoice or whatever it is into a database, people will say it is a forgery. Can you see what I mean? Therefore, you go back to the original the whole time to be absolutely certain that you have the right invoice.

Q343 Mr Raynsford: If I may pursue this a little, you quite rightly highlighted the importance of a system that was robust, in the context of what had gone before. You have generously said that IPSA would have found it difficult to do any better, given the timetable, but you also in your earlier evidence highlighted the extent to which you as compliance officer did not feel really able to advise the board on changes that would make the system work better. While accepting the earlier difficulties, do you not feel that IPSA could have gone further in the course of, say, the past nine months to make the system work more cost-effectively and more effectively?

Luke March: I think that is stage 2-we are now in stage 2-and that is exactly what it should be doing. Stage 1 was to get this show on the road. Don’t forget, the show on the road was only operational May last year I think. We are talking about a very, very short time. The time is right now to look at it all from both sides, not only from your side but in terms of accountability to the public and the public purse, and to make sure that that balance is right. What I am saying is that I don’t think the balance is right now.

Q344 Mr Raynsford: Do you see any risk, in terms of IPSA’s responsibility to maintain public confidence, of a move in the kind of direction that you have been talking about in your evidence this morning?

Luke March: It depends how it is explained. So long as you get as many people as possible on side, explain it very fully, explain the checks and the balances and show that, in terms of the public purse, disclosure, disclosure, disclosure is the key, and that is not changing. Whatever you do with the system, so long as you are disclosing it, you can show that there are other benefits to the taxpayer and that you can therefore serve your constituents in an even better way.

Q345 Cathy Jamieson: I want to try and get to the nub of what you believe are the changes needed to the current system to ensure that the compliance function operates more effectively. I have three points and I will just put them to you, because I know that you have perhaps answered some of the issues already. First, should a distinction be drawn between IPSA’s compliance and regulatory functions and, in your view, have those separate roles perhaps become confused and overlapping? Can you be specific about the role that you think IPSA’s compliance officer ought to play and whether any legislative changes are required in order to enable that to work more effectively?

Luke March: I can answer the last bit: yes, there would need to be legislative requirements because the compliance officer is an officeholder under the Act. So yes is the answer to that one and, answering the main point of what you asked, the answer is also yes. The compliance officer, who should effectively be what is described in other regulators as the enforcement officer or director, and the policy side, which is the regulatory side of IPSA, should be together. That is exactly the model that is well established by endless regulators that you have set up. It works well in that context-I have seen it work well-so why can it not work in this environment as well? You then have the payroll and expenses system run at arm’s length. I suppose you could run it at arm’s length in the same organisation but I think that you might actually find a cheaper way of doing it-that’s the truth.

Q346 Chair: Thank you. One last question, which may be a little bit unfair to you. The aims of the Act are pretty clear, and we are going to try to articulate those in our report but, if the IPSA board fails to achieve the aims of the Act-you are saying you are on stage 2 now but let us say that in a year or a year and a half from now public confidence or value for money has not improved-ultimately, who is responsible for making sure that IPSA is doing the right job?

Luke March: That is almost as difficult a question as asking me who I might have been accountable to. I asked many people in this place, who I thought would know more about the Act than I did, as to who I was accountable to and I did not get a clear answer. This may be the same problem. In a sense, IPSA is accountable to the Speaker’s Committee-is that right? It is part of the constitutional accountability.

Chair: Luke March, thank you very much indeed. That has been very helpful. I appreciate your time, thank you.

Examination of Witnesses

Witnesses: Lauren Edwards, Political Officer, and Max Freedman, Chair, Unite Parliamentary Staff Branch, gave evidence.

Q347 Chair: Thank you for very much indeed for taking part in our inquiry, and thank you for the work that your organisation does on behalf of the staff of Members of Parliament. If being a Member of Parliament is a harrowing job, working with a Member of Parliament is probably even more harrowing, so thank you for the support you give to members of staff.

Our inquiry is looking at the aims of the 2009 Act, as amended in 2010. We are asking ourselves whether, in the operation of the Act through IPSA and other bodies, the aims of the Act are being achieved. Your input on that front would be very helpful from the perspective of how MPs’ offices are functioning, how their staff are feeling and how they are responding to things. As a general question to start off with, in your view, what impact has IPSA and its scheme had on MPs’ staff and can you take the opportunity to introduce some of the general points made in your written evidence?

Max Freedman: Thank you for seeing us and hearing from us. I am chair of the branch. I would like to start by saying that it changes all the time but there are roughly 2,500 members of staff for MPs. Our branch itself has more than 500 members who are fully cross-party. We do our best to represent MPs’ staff in relation to all the various concerns they have.

There are two different categories in terms of the impact that IPSA has had on staff. First, in terms of work load, we have some evidence that a lot of the work on the processing of the expenses has fallen on the shoulders of staff and added greatly to their work load. The second aspect is what IPSA has meant for the terms and conditions of staff in relation to the staffing budget, redundancy-that has been downgraded-issues over bonuses that have fluctuated over the past year and pay disparity. There are a whole gamut of issues that I am sure we can get into at some stage if you would like us to.

Lauren Edwards: I want to reiterate the point in our written evidence about why we want ourselves and MAPSA to be included as groups that IPSA must consult when it changes or amends the scheme in any way. That basically comes out of the current situation whereby meetings with us are IPSA’s gift to give. We can put pressure on it through MPs with whom we work and through the press, but we have found that it is quite difficult to get more regular meetings than we get at the moment with the people who are actually the decision makers. We have been asking for about a year for a meeting with just one of the board members. That has so far not come forward.

Q348 Chair: You have not had a meeting with a board member in the last year?

Lauren Edwards: We have never had a meeting with a board member, no.

Max Freedman: We had Jackie Ballard in one meeting. We have had three or four meetings over the past 18 months with staff of IPSA, but one of our concerns is what are they able to say to us and who is making the decisions. Because when they say something, it goes up to the board and they are the ones actually making the decision. So we would like to meet with the board.

Q349 Chair: And you would like to be statutory consultees preferably, under the Act. Would there need to be a change to the Act to do that?

Lauren Edwards: Yes. We mention ourselves and MAPSA because we are the two cross-party groups that operate here on behalf of staff and we both have a memorandum of understanding with the House authorities, so that when changes are made here, we are consulted. It is only fair that that applies to IPSA as well.

Q350 Chair: Another general question and then I will hand over to you, Edward, on bureaucracy. Have you noticed any change in the mood of your staff and their observations of the Members they work for since the arrival of IPSA on the scene?

Max Freedman: It has been a major issue of conversation over the past year and a half or so. We did a survey of staff back in January/February. I will not pretend it was comprehensive, but we sent out an e-mail through the chief executive’s office asking people to engage in the survey. We had 536 responses-that is as big a survey as any I am aware of on a range of issues to do with IPSA. At the end of the survey we asked how staff would rate IPSA out of ten. It was a fairly crude measure, but out of 500-odd responses, IPSA averaged 3.29-not a wholehearted endorsement of the way that it has been operating so far.

Q351 Chair: But I take it that IPSA must also have carried out such a survey to find out the impact on members of staff.

Max Freedman: IPSA has not surveyed staff at any stage. It has surveyed the public and asked a variety of questions, including about their attitudes towards MPs’ staff, but it has not actually surveyed the staff themselves. It is currently going through a process of staff review, which involves going to a variety of offices, speaking to staff and watching how they work, but that is the first time in 18 months that it has tried to engage with how staff operate.

Chair: Your survey, which I have just had sight of, is incredibly helpful. It is very in depth and gives a real insight into what is going on. With one in five of MPs’ employees filling it in, it will be quite instructive. Thank you.

Q352 Mr Leigh: There is a dispute between IPSA and the National Audit Office about how long MPs and their staff spend administering expenses. Whose figures are more accurate?

Lauren Edwards: I understand from Sir Ian Kennedy’s previous evidence that he said it was about 15 minutes a day.

Chair: I shouldn’t respond, but yes.

Lauren Edwards: Which does not really tally with either our survey or with anecdotal evidence that we have from people. If you look at what proportion of staff dealt with expense claims under the old system-around 70% spent less than an hour doing that.

Max Freedman: An hour a week.

Lauren Edwards: Yes, an hour a week dealing with it. Now, it is far higher.

Q353 Mr Leigh: Can you put any more flesh on the bones? You say it is far higher-

Max Freedman: Our survey was obviously self-selecting, but as far as we are aware it provides the only data that anyone really has. It says that before the election, 70% of staff claimed that they spent less than an hour a week dealing with expenses. Under the new system, only 8% of staff say that they spend less than an hour a week; 58% report spending three or more hours a week; and 26% report spending five or more hours a week. Those are the responses we have received, and it is the best information we have. It shows a big change.

Q354 Mr Leigh: That is for the average number of staff for an MP-roughly three people.

Max Freedman: Yes. We have various issues about numbers of staff-

Q355 Mr Leigh: This is a simple question but it needs to be answered for the record. How does the extra bureaucracy arise? Why are some people spending five hours a week on it?

Max Freedman: Duplication. I am fortunate in that I am one of the few staff who do not have to deal with expenses, so I don’t know all the details.

Lauren Edwards: It is when staff are not able to do the job that they are employed to do. A lot of the time, people such as parliamentary assistants have to take on some of these roles, so they are not able to serve constituents. They have to process what are essentially an accountant’s duties. To be honest, we have not had a lot of complaints from our members about things like duplication of paper and the online stuff. It is more about niggly little things where IPSA is just not adhering to the rules but is nit-picking about small things such as claims being returned. For example, if someone pays a fee for the maintenance of a website, they have to put in that fee every month, even though it is a yearly claim and they have an invoice that states that. It is things like that form being returned because the domain address is not on the actual claim form, even though IPSA has information about what the domain is for in its records. It is niggly things like that; things being rejected for small reasons rather than because of duplication.

Max Freedman: And also, I suspect, the difficulty in trying to contact IPSA about those things, and the fact that it now answers the phone only in the afternoon. That is certainly a bugbear for staff. They are trying to do this on top of their other duties, and it has been shoehorned into particular times of the day.

Q356 Chair: It sounds as if the introduction of the new scheme-obviously, it will be busier in the initial period-has meant that MPs’ staff spend a significant amount of time dealing with the administration of claims, rather than constituents, which is really the job they have been employed to do.

Max Freedman: Absolutely.

Q357 Chair: Is that a fair statement?

Max Freedman: It is. As well as meaning that less time is available to work for constituents, which is what we are employed to do, it means that everyone gets a false view of the actual cost of IPSA and the IPSA scheme, because the cost of the staff hours that go into it at our end is not included in any of the detail.

Q358 Mr Leigh: Can I just ask one question? I hope you do not mind me asking, but you know your members, and a lot of the staff are youngish, aren’t they? What do they say to you? Presumably, people come into this job, which is not very well paid, because they are interested in politics. What do they say about doing this stuff?

Max Freedman: The turnover has always been quite high in Parliament anyway. More and more, we are getting people coming in who are not used to the old system or familiar with how it used to work, so these things are almost accepted as part of the job. Certainly, very few people come to work for an MP to process expenses claims; that is not the idealism that has driven them into the job.

Chair: I am conscious that Stephen will have to leave shortly. Do you have any questions, Stephen?

Q359 Stephen Williams: Yes. Sorry, I will have to leave to go downstairs for an urgent statement shortly, but I want to ask you about the staff budget. As you just said, no one works here to process expenses, and they probably do not work here for the money either. However, IPSA have restricted our flexibility as MPs over the staff budget because of what they did to pension contributions. How much disquiet have you heard from your members about that decision?

Max Freedman: A huge amount of disquiet straight from the off. As you say, the pension contributions were included in the budget, when previously they were not. Even though the budget increased slightly, it did not make up for what happened, and we have some detail on that. IPSA said what it did was made up for by the fact that it had removed some of the things that were previously counted in the budget. But we managed to get down some parliamentary questions that demonstrated that in 2009-10, 14 MPs claimed for professional advice, 22 claimed for cleaning, seven claimed for janitorial or reception services, seven claimed for maintenance services for computer hardware, one claimed for interpreting and translation, four claimed for recruitment and 30 claimed for training. Those are the factors that were taken out, but they made a negligible difference to the budget, so there was a straightforward cut in what was available, and we have evidence of staff hours being reduced and redundancies taking place as a result.

Q360 Chair: In addition to the extra administration?

Max Freedman: In addition to the extra administration. You can well imagine how most staff received all of that.

Q361 Stephen Williams: What about the pay scales? IPSA suggested mandatory pay scales for new staff joining an MP’s office. Given the turnover, every Member of Parliament will have a mix of staff, with some employed before 2010-if the Member was elected before then, as most of us here were-and some new staff joining under the IPSA regime. Has that caused any ill feeling or bad blood among your members?

Max Freedman: It has. Again, according to our survey, 9% to 10% of respondents said they worked in offices where there was pay disparity for people doing the same jobs, because some were on the new IPSA contract and others were on the previous contract. That is unsustainable.

Q362 Stephen Williams: I have one final question, and then I will have to go. Your branch and Members of Parliament such as me have raised the issue of interns many times. Do you think IPSA should provide a separate budget for the engagement of interns?

Max Freedman: We do. In IPSA’s first ever consultation, in January 2010, it recognised that, legally, there is not really any such thing as interns; they are employees when they are given hours of work and tasks to do, so as far as we and the law are concerned, they are entitled to the national minimum wage. Despite stating that initially, IPSA has taken no steps towards really resolving the issue. It brings up all the issues of access and who is able to get the starting jobs in politics, if you will. We very much think that IPSA should provide a separate budget line to enable people from worse-off backgrounds to have an opportunity.

Q363 Priti Patel: I have lots of questions. I thought your paper was really helpful and full of insights. I have also had a look at your survey and many of the comments there. As a new MP, I am interested in a couple of structural things. One is the fact that IPSA is responsible for paying staff salaries and for the contracts-the structural side. I am interested in that for your members with regard to the relationship with Members of Parliament who effectively employ your members, even though IPSA is there. Does the current system give MPs’ staff an ambiguous employment status, and what has that meant for the relationship between employee and employer-the employer being the Member of Parliament?

Max Freedman: It has led to a lot of confusion along the way and quite a lot of disquiet. Anecdotally, and this is subsequent to the survey so we do not have much information on that in terms of raw numbers, we know of MPs putting in for pay variations for their staff who have had them rejected by IPSA. That leads to the question of who is employing these staff anyway. Whose right is it to make those decisions? One thing that is dear to our hearts, if you will, is that for years we have been pressing for an HR contact point. We do not care who provides it, whether it is the House, IPSA or somebody else. But when we speak to the House they say, "That’s IPSA’s role" and when we speak to IPSA they say it is the House’s role.

One element in the survey back in January was that since the election, half of all respondents said that they felt they needed some HR support or advice at some stage. That is simply not being provided. When IPSA was first created I thought it was a wonderful opportunity to modernise some of the employment structures in this place. I had a conversation with Ian Kennedy right when it was starting up. I expressed that view to him: this was a real opportunity to make Parliament a modern organisation. But there has been no movement whatsoever on creating an HR point. At the moment if anyone has any issues or concerns, they are directed to us, whether they are members or not and we are an unrecognised trade union. So we give support but we are volunteers. There is only a certain amount of support that we can give people. I think that the House or IPSA, or somebody is letting people down in not providing that level of support.

Q364 Priti Patel: Your members’ comments in the survey are really insightful, as is your submission. Do you think IPSA has a full understanding of the people aspect around terms of employment? We have heard so much evidence over the past few weeks about the impact of IPSA on Members of Parliament from a health and well-being point of view, and obviously that would affect staff as well. I have seen that clearly in the comments that have been made. Do you think IPSA has a genuine understanding or appreciation of the people side of things?

Max Freedman: I don’t think that has been their priority. They are now obviously undergoing this staff research survey, but that is 18 months too late in my opinion. I know they had to set up in a hurry but with 2,500 staff you could almost say we are their largest stakeholder, yet we have been very much left until the end in terms of worrying about how we fit into the picture. The 3.29 average speaks for itself in terms of how staff regard that they are considered by IPSA.

Q365 Priti Patel: Presumably that could all be improved with better engagement, which is obviously what you are looking for as well, with increased understanding by IPSA in terms of staff and experience through dialogue.

Lauren Edwards: One of the major impediments when you try to engage with IPSA on those issues, whether I do that as an employee of the MP I work for or with my union hat on, is that their duty is to be the paymaster, to administer the system. That is the argument they trot out each time for why they are not responsible for an HR department or any of the rest of it. The feeling among a lot of staff is that when it suits IPSA for the MP to be the employer, that is fine but when it does not, they shift. It is very ambiguous in terms of what they will take on. If they do not want to take on something then that is the role of the MP as the employer.

Max Freedman: They do actually plead the Parliamentary Standards Act when they do it. They say it is not within their remit under the Act to provide HR support or anything like that. I guess you are the correct body to explain that to.

Q366 Priti Patel: In your submission you touch on fairness for less well-off members with families as well, and obviously staff are impacted by things such as the child care supplement. That is a classic area that is effectively an HR issue, which you say that IPSA does not seem to have the capability to address.

Max Freedman: There have been a variety of child care issues. It is understandable that errors are made in the setting up of an organisation swiftly but, initially, when they were referring to maternity care as a contingency and so on, that was very offensive to a lot of members of staff. The suggestion is that the payment might not be a statutory obligation, but the cuts in the child care supplement, which-as far as we are aware-have been done purely for budgetary reasons are not welcome either. I do not know if you want to add to that, Lauren.

Lauren Edwards: We have a two-tier system yet again, as well as the pay disparity. If members of staff were employed before 2010, they have the salary supplement for child care and if they were employed after May 2010, they have the salary sacrifice scheme. We have a particular member, who had the supplement and whose MP retired in 2010. She then worked for the successor MP. Because TUPE does not apply, as it considers each MP to be the employer, she is now on a different contract. None of her terms and conditions was transferred across. She was not recognised for longevity of service. She is now also on the salary sacrifice scheme and is finding it very difficult to make ends meet because obviously she had enrolled her children in a form of child care that was sustainable for her under the old system.

Q367 Priti Patel: Finally, on the whole issue about the functionality of IPSA, how helpful do your members-the staff across Parliament-feel IPSA are in processing claims, in terms of engagement and dialogue, in light of the fact that they do not open their phone lines until 1 o’clock in the afternoon. Can you just elaborate on some of the comments and sentiment of your members on that front?

Lauren Edwards: We had an all-staff meeting in June this year to follow up on how people were feeling after the survey that we had done earlier in the year. There have been some improvements, but they are very minor in the scheme of things. I would characterise that meeting as "anger". People were furious, especially those who have worked here for 20 or 30 years. They feel that they have been penalised as a result of the actions of some Members of the last Parliament. Their terms, conditions and pay and how they feel about their job have been changed since May 2010 when the scheme came in. There is a lot of anger, and people feel that they have been unfairly penalised.

Q368 Mr Raynsford: Can I just pursue this a little bit? You have highlighted the problem of not being able to get a response from IPSA to queries until the afternoon, but can you say a bit more about how easy it is to get responses from IPSA when there is the need to clarify whether or not a claim is appropriate or when advice is needed on other issues?

Max Freedman: There was certainly a very big problem for a long period of time when the system was first set up. The phones were continually jammed, it was impossible to get through. People were waiting on the phone all day. I used to give the advice: "If you need to speak to IPSA, don’t try to phone the helpline; phone the press team, because they always answer and they can transfer you internally."

My understanding is that there has been some improvement. IPSA say that they answer calls only in the afternoon so that in the morning they can do all the processing and be ready to sit by the phone. But what people say to me does not reflect a growing love of the system.

Lauren Edwards: We have also found that sometimes Members get conflicting information from the information line. There is a problem with that because staff will not give you a named contact. I’ve had it myself-I have said, "I can’t speak at the moment, but give me your name and I will call back and ask for you when the lines are open tomorrow." They will not give a named contact, so you have trouble accessing the same person and you have to explain the whole situation again to whoever you speak to later on.

In some incidents, the advice that people were given depended on who they spoke to on the phone. That advice might have been about whether something in a claim sounded all right or was a little precarious. There is inconsistency in some of the advice that members have received through the helpline.

Q369 Mr Raynsford: Do you have any specific demonstrations of that? It is obviously very serious indeed if separate Members are getting different advice from IPSA about whether certain claims might be acceptable or not.

Lauren Edwards: Most of the incidents have been with pay rises. The MP will say, "I want to put in a pay rise that is within my budget." It depends, from my experience, on the forcefulness of the MP in putting it in. If they say "Is it all right if I give my staff member a 2% pay rise? I’ll still be in my budget; they will still be within their pay scale", and if they say it in that hesitant way, often the response will be, "Well, no; with regard to the public sector pay freeze you shouldn’t be giving any pay rises at all." If the MP puts the form in and says, "I’m just putting this in. You are going to pay it," it is more likely to be paid. That is the example I have come across. I do not know about Max.

Max Freedman: In addition, as an annexe to the survey that we did, we have about 70 pages of comments from staff, many of which give individual examples of that kind, so it might be worth trawling through some of those.

Q370 Chair: As a final question, in one or two other surveys we have seen-the National Audit Office and some internal surveys with the political parties-we find that 91% of MPs say they are not claiming what they are legitimately supposed to be able to claim, so there appears to be a deterrent effect. From the staff that you are working with, and the information you have, are staff conscious that certain claims are not being made because of the potential risk or difficulty, or time taken?

Max Freedman: Those sorts of claim rarely come to us. What we would see more often from our perspective is MPs not putting in, for example, for a pay rise for their staff, or for whatever kind of bonus there is-I know we cannot call them bonuses now, but whatever the scheme is. Because of the fear of publicity, they do not want to be seen as spending. There are staff who may well deserve to get a pay rise who are not getting one because of that public fear.

If I can touch on one thing I wanted to say, because I can never emphasise it enough: the redundancy package has been downgraded. What used to be allowed was up to a 15% bonus, which could be matched, and that has now gone to statutory. Because of that and the fixed-term Parliament you have a lot of staff who know exactly when their employment is likely to terminate, and retention is going to be a real problem, because they are going to say, "Well, I’m not actually going to get the redundancy that I’m entitled to, and it’s six months before the election is going to be called. I am going to jump ship now." That is going to be a real bubble in 2014.

Lauren Edwards: Could I just briefly touch on the issue there? With the contingency budget in terms of the staffing, we have found there are a lot of offices that need extra staff. They are incredibly overworked. They are deterred from putting in a contingency claim for more staff, even though they have to provide evidence, and they need them, just because it would seem to be asking for extra money.

What some people are doing-there is evidence in some of the survey comment-is taking on unpaid interns, which puts Members really at risk of national minimum wage claims further down the line, because they are in some cases breaching national minimum wage law if they are taking on people and giving them hours but not actually paying them any money.

Also, I think IPSA could be more proactive in letting MPs know what they are entitled to, so one of the things we have come up with is constituency office safety issues. There is a budget there for them to have the police come and check the safety of the property and to suggest improvements that can be met out of a budget; but a lot of people are not aware of that. A lot of staff are not aware of it. We wrote this year to various MPs, to let them know about it, and to try to push it, and we have asked IPSA to do the same in their bulletins, but so far they have not. But again, that is because they see themselves as a paymaster, rather than a proactive organisation.

Chair: Thank you very much for your evidence, and for your survey. I think this will certainly appear quite prominently in the report that we provide.

Examination of Witnesses

Witnesses: Sian Norris-Copson, Chair, and Lisa Townsend, Executive Member, Members’ and Peers’ Staff Association, gave evidence.

Chair: Welcome, and thank you for taking the time to come in. We very much look forward to the supplementary evidence that you will give us during questioning today, because we are keen to hear about the experience of people who work with MPs and others on the parliamentary estate. I shall go straight to Guto, who will ask about the bureaucracy surrounding the current system.

Q371 Guto Bebb: Obviously, the question does relate to the bureaucracy surrounding the IPSA claims system. In your view, do the problems arise primarily from the claims system put in place by IPSA, or is the demand for evidence the reason why the system appears to be more complicated?

Sian Norris-Copson: Both, I would say. I was using the computer system yesterday-you may have heard the swearing coming from the direction of Portcullis House; compared to other computer systems and databases out there, it is very old-fashioned and clunky, and one of the main problems that we all have is time. I put off using it for as long as I can. I know that doesn’t help, but it is just not an attractive system to use in the first place.

The evidence-receipts etc.-that we are asked for is all completely reasonable, but the system is sometimes very inconsistent, especially with the payment card. You have the reconciliation issue. You have on the card statement what it has been used for. Obviously, it’s a flight, a ticket or something like that, but sometimes you are still asked for quite a lot of evidence for that. If someone has lost their train ticket or has not managed to get a proper receipt, the chances are that you will send that in to IPSA, it will come flying back, you get into trouble and the process just gets extended and extended. It has got better, to be sure. We would agree with that.

Lisa Townsend: Yes, it has. The site is not remotely intuitive in terms of using it, which is one of the problems, so on its own the training required to get to a state where you can use it is an issue. Passing it on to anyone else in the office is too much hassle.

In terms of the evidence, the one consistent problem seems to be stationery, not from Banner’s side, but from IPSA’s side. I’m talking about the evidence that it requires. "Have you really bought stationery?" "Well, yes, because we’ve shown that we’ve bought stationery." "Yes, but we’re not sure you’ve actually bought stationery." "But we have, because this is what the invoice says and it’s quite clear what it is." Three times in the same month, I have had them come back to ask for the same invoice.

Q372 Guto Bebb: Is that because it has been lost?

Lisa Townsend: At their end, quite possibly, but of course they won’t tell you that. They will not actually say they have lost it. Instead, they say, "It wasn’t complete when you sent it."

Q373 Chair: On what percentage of occasions or how often are things lost or apparently lost?

Lisa Townsend: In any given month, I probably end up doing three resubmissions.

Sian Norris-Copson: That particular aspect has got worse. In the beginning, we were all struggling through, and they never refused anything or lost anything. But that has got worse and I do not know why.

Lisa Townsend: Our members are certainly saying that as well-that it is the biggest difficulty.

Q374 Guto Bebb: On the specific issue of the evidence requirement, has there been, in your experience, an increase in claims being rejected because even though an invoice has been supplied, it has not been deemed sufficient by IPSA?

Sian Norris-Copson: Yes.

Lisa Townsend: Yes.

Q375 Guto Bebb: Is there any explanation for that from IPSA?

Lisa Townsend: No.

Sian Norris-Copson: No.

Q376 Guto Bebb: Even though an invoice has been supplied, that has not been deemed sufficient. The incidence of that has increased.

Sian Norris-Copson: Yes.

Lisa Townsend: Yes. What is particularly frustrating is the lack of communication about it. You get an e-mail-as you know, because the e-mail will go into the Member’s inbox-saying, "We need you to clarify something." You phone them after 1 o’clock or before 5 and say, "What do you need clarifying?" Then it takes them five minutes to locate your file and then there is often confusion about exactly what needs resubmitting. Usually, that is six weeks after you submitted the claim in the first place, so why has it taken them six weeks to realise that something is missing?

Sian Norris-Copson: By that time, it has probably gone over the 90-day limit, so then you have to be nice to them, so they say "Well, we might just change the date." "Yes, if you could." But you need written permission to resubmit your form with a new date, so by this time it’s all-

Q377 Chair: Could you run through that again? You are saying that on many occasions, or a large percentage of occasions, it takes them more than six weeks to process something. Then you run out of time and they ask you to change a date to try to make it work.

Sian Norris-Copson: The computer system will not let you put it through. It will say, "This has gone over 90 days," and you cannot actually press the button that says submit. So you have to ask them for permission to change the date. Of course you could do it yourself.

Chair: That is really curious. I wonder whether that shows up in their statistics. That is something we will have to look into in some of the other evidence.

Q378 Guto Bebb: Since the system came into being, IPSA claim to have brought forward a number of changes that have made the system simpler and more effective. Are there any changes that you would specifically identify as having been helpful?

Lisa Townsend: Direct payment has been helpful. It does not change the evidence requirement, but that is fine. It is easier in the sense that we are not now having to put in Hillgate Travel or Banner, because you go to the card statement and it is already there. So that helps. That is definitely useful.

The phone lines have been more of a problem. Any member of staff you speak to will tell you that only being able to call them between 1 and 5 is not particularly helpful for us.

Sian Norris-Copson: Especially when the website is fairly useless, I have to say. If you just want to find a specific answer to something-can I pay my intern x amount?-it is impossible, impossible, to find. Over the last few days I have been using it, and it is not even working. You get to the front page, and beyond that nothing happens at all. It is a very, very bad system. It would not be so bad that the phone lines are only open for four hours a day if you could find what you wanted very easily on the website, but you can’t.

Q379 Guto Bebb: When you do get through, do you get useful advice from them? Or are they reluctant to provide advice?

Lisa Townsend: It varies.

Sian Norris-Copson: It does, yes.

Lisa Townsend: One of the problems is the inconsistency. I spoke to somebody a couple of weeks ago in payroll who was brilliant. She was fantastic. She understood what I was saying. She had complete common sense and fixed the problem. I took her name, because unfortunately it is so unusual.

Sian Norris-Copson: That is what you have to do, particularly their number.

Lisa Townsend: Yes, but that is unusual. Part of the problem is the inconsistency, which is from IPSA’s end, so in terms of training, it has to be from IPSA’s end. You will speak to one person and get one answer, and then you’ll phone back in two weeks and get a different answer.

Q380 Guto Bebb: We have read evidence from the National Audit Office on the time spent by MPs and their staff dealing with the system, and we have some contradictory evidence provided by IPSA. What sort of time contribution and commitment is required to run a typical MP’s expenses?

Sian Norris-Copson: The answer is that there is no typical time. We were just talking about this, and we are not actually aware of what the disagreement is. The answer is that there is no typical time, but most people would say that it takes them a lot longer than it used to.

Q381 Guto Bebb: In comparison with the system prior to 2010.

Lisa Townsend: Yes.

Sian Norris-Copson: Yes.

Q382 Priti Patel: I am interested in staffing, the budgets for staffing and things of that nature. I want to hear from you, in relation to your roles here, whether there has been an overall reduction in staffing budgets. What has the impact been on the offices of Members of Parliament? Are they hiring fewer staff because of the complexities and IPSA?

Sian Norris-Copson: I know that in these times we cannot expect huge increases in our budget. What was a large part of the problem, as you probably heard from Unite, is making us take our pension contributions out of the staffing budget. Obviously that made a huge difference, and we have a small rise this year, but we have certainly not found that enough to take on interns or extra staff. Some offices do not use their whole budget. We know that, and it is a point that IPSA will always make when you say, "Could we have a little bit more?" They will say, "Not everybody uses their budget, so therefore you don’t need it," which is not really good enough.

Q383 Chair: Can I just jump in here? There is quite a lot of evidence that 91% of Members are not actually claiming what they are entitled to claim under the system. In your experience, are the Members that you are aware of claiming the full amounts? Are you claiming everything that is allowed, or is there a deterrent effect with the pain in claiming and other things?

Lisa Townsend: I certainly have had staff members saying to me, "I haven’t had a pay rise in however long-none of the staff have-and we’d like to take somebody else on, but we can’t pay them any more because the Member I work for wants to ensure that he, or she, is not at the top end of MPs who are claiming". Therefore, that MP makes sure that there is always at least £7,000 left over in the budget, so that when their local or regional paper publishes the league table of regional MPs, they are not near the top.

It is frustrating. It is very frustrating. It is certainly a deterrent, and not just with the staffing budget. We know it is not just with staffing. There are other budgets where people are doing the same, so they are looking at their office costs budget, their subsistence budget or whatever it is, and saying, "When the league table comes out in my regional paper, I do not want to be near the top of it, so I will always make sure that I don’t claim anything close to the maximum for that reason."

Q384 Chair: From your observations and experience, does that apply even to their personal travel claims and accommodation? They are just not claiming their bills.

Lisa Townsend: Everything.

Q385 Chair: Would you say that was widespread?

Lisa Townsend: It is certainly widespread among the Members I have spoken to.

Sian Norris-Copson: Yes, you asked what evidence we have that MPs are afraid of claiming, and of course we do not have evidence, but we have a lot of anecdotal tales. People really are afraid of any adverse press.

Lisa Townsend: And rejected claims, which is the big one of course; people not putting things in because you get two different answers from IPSA, and you are not entirely sure whether it will be allowed and you just do not want the media furore over a rejected claim. We had one Member in particular who had a very difficult day over something that was rejected. IPSA admitted it was their fault that it was rejected-pure paperwork; human error-but of course it was too late for the Evening Standard and the Mirror by that stage and the story was already out. That has really put that office off claiming things.

Chair: That is very helpful, thank you.

Q386 Mr Raynsford: We have talked a bit about pay and you have mentioned the problem of pension contributions. Are there other areas where terms and conditions of Members’ staff have been adversely affected or affected by the new IPSA regime?

Lisa Townsend: Initially, we know maternity was, but I gather that has been fixed-and child care. I gather that certainly the maternity issue has been fixed now.

Q387 Mr Raynsford: I do not think child care has been fixed.

Lisa Townsend: No, I do not think it has been completely fixed, but I gather that there are talks.

Sian Norris-Copson: We were not aware particularly of any other things.

Q388 Mr Raynsford: Okay, thank you. Do you see problems in the split of responsibility, with IPSA being essentially responsible for paying salaries and determining staff contracts, but with the MP being formally the employer? Does that actually give rise to problems because of the ambiguity about who the real employer is and the status of you, as employees?

Lisa Townsend: The biggest problem has been HR. We have had the conversation with IPSA, and I am quite sympathetic to IPSA’s argument on this, which is, "HR is not within our remit and we’re not here to provide HR", but unfortunately, nor is the House. We are left with a big HR black hole, which is one of the things that MAPSA has tried, where we can and without any resources, to fill.

Q389 Mr Raynsford: Can you give some examples?

Lisa Townsend: Members’ staffers who have been really rather badly treated by Members of this House and the Lords have come to us and said, "Who can I go and talk to?" and the answer is nobody, unfortunately. The Member has somebody to talk to if the staffer comes to them and says, "I’m taking it to tribunal", but unfortunately, the staffer has nowhere to go. I understand and I am sympathetic to the fact that IPSA does not want to fill that role, but from a staffing point of view it leaves us with a problem.

Sian Norris-Copson: The other particular problem we have had, which people have come to us about, is over not being able to have pay rises, even if the MP has room left in their staffing budget. IPSA say that nobody can offer a pay rise, but actually, there is not really a reason, apart from the economic situation or, again, adverse publicity. That has been a difficult one to bridge. We get the really stupid situation now where some staff-as you know, the contracts are different-have said, "The only way I can get a pay rise, because I am on an old contract, is to resign, reapply for my job and get a new contract under the new pay scales. I will then get a pay rise."

Q390 Guto Bebb: On that specific point, obviously guidance was provided by IPSA that because of the public sector pay freeze, anybody earning more than £21,000 a year should not be given one. Do the staff in the House who work for MPs consider themselves to be public sector staff?

Lisa Townsend: No, we do not.

Q391 Guto Bebb: Have you as an organisation ever compared the benefits that you receive, in terms of pensions and so forth, with what is provided by the public sector?

Lisa Townsend: We have had that conversation with IPSA. We have said that some consistency would be nice. We accept that there is a public sector pay freeze on; we accept the publicity surrounding that. It doesn’t look good for you or for us if we look for more money. However, we get penalised on one hand for being public sector in the pay freeze, but we do not get the benefits of being public sector employees. That seems a little unfair to us.

Q392 Guto Bebb: What was IPSA’s response to that comment?

Lisa Townsend: They didn’t have one, actually.

Sian Norris-Copson: "Tough," probably.

Lisa Townsend: Yes, it was basically, "You have to accept there’s a pay freeze on. There’s nothing we can do about it."

Sian Norris-Copson: But of course, at the same time, what a lot of MPs used to do was pay bonuses to their staff if they had room left in the staffing budget. Of course, they are not allowed to do that any more either.

Q393 Mr Raynsford: You say they are not allowed to?

Lisa Townsend: This is one of the arguments we have had with IPSA.

Q394 Mr Raynsford: Have you been given instructions on that?

Lisa Townsend: Yes, we have had guidance.

Sian Norris-Copson: Yes, absolutely. You are allowed to pay a good-will payment.

Lisa Townsend: A £20 M&S voucher was the example from IPSA. They suggested a £20 M&S voucher at Christmas.

Sian Norris-Copson: If you were to ask for it, they just wouldn’t sanction it.

Q395 Mr Raynsford: Do you have evidence of inconsistency here? I can tell you for a fact that some staff have received significantly larger sums.

Lisa Townsend: Yes, we know. There are staff who are getting it, because the Member of Parliament is doing it. This is one of the problems, of course: we operate like 650 small businesses, which is sometimes great and sometimes difficult, because of the inconsistencies that that obviously throws up.

Q396 Mr Raynsford: Finally, can I raise the question of contracts? Do you believe that the contracts, as currently approved by IPSA, reflect accurately the job that you do?

Lisa Townsend: Do you mean the job description?

Mr Raynsford: Yes.

Lisa Townsend: No, they don’t. IPSA is generally quite sympathetic to remodelling, but no, they don’t. The reality is that most of us do different things. Unfortunately, that has thrown up a problem with the pay scale system and how vigorously enforced it is. I don’t think it was two years ago, if I am honest. I know of jobs advertised for what is essentially a parliamentary assistant, but they cannot pay the minimum £22,000, so they advertise it as something else to get away with paying £19,000 or £20,000. But that is actually not the job that the person who gets it undertakes, which is very unfair for staff.

Sian Norris-Copson: It is the same thing with the job description. You could not fill it out accurately. You’re fitting in with them, rather than-there probably ought to be more flexibility-the other way around. We are forced to-not fiddle, but-

Q397 Mr Raynsford: Were a case like this applied elsewhere, it would be perfectly normal for the staff member to go to the employer and say, "I think this is actually not a correct description of my job. Will you please correct this?"

Lisa Townsend: Some will do it. I think Sian and I would both be perfectly prepared to do that, but we all know of junior members of staff who wouldn’t, because it is their first job in Parliament, they have fought 100 other people to get there and the last thing they want to do is rock the boat.

Q398 Priti Patel: I have two questions. One is about the structural aspect of IPSA. Obviously, IPSA has been up and running for a while now. What type of advice do they give around associated expenses, claims and problems? Has the advice improved since they started? Lisa, you had one good example a couple of weeks ago. I would like some general comments and observations about IPSA’s attitudes towards MPs and members of staff.

Sian Norris-Copson: Do you mean on the phone, when anyone rings up, or when we have meetings with them?

Q399 Priti Patel: Both, actually. Obviously, you are doing your job when you are on the phone to them, when you finally break through and get through to them. Secondly, you’ve touched on the HR point, which we have heard for the second time today. It requires some engagement and dialogue with them. How constructive are they in engaging with you as a body? Are they listening to you and taking on board the points that you are making?

Lisa Townsend: They are doing a very good job of ticking their engagement boxes. They will invite us in once every few months. The discussions were quite hostile at the start. I think we find that we are meeting a little bit more in the middle now, so that has helped. There are still some issues that they will not discuss with us at all.

Sian Norris-Copson: They get quite defensive. We have never had a meeting with the board, for example. That would probably be quite interesting. There are obviously a lot of problems between them and the board as well. You can pick that up when you are in meetings with them, so obviously there are problems there too. In general, we just do not feel they understand us. There is a staffing review going on at the moment, but that seems to have hit a brick wall. We are not quite sure what is happening to that, except that at some point it will be thrown open to public consultation, which I have had a bit of a whinge about here. I am not sure how that is going to help. We do not feel they engage fully with us, and we actually do the job. I think we would feel it more helpful if they spent more time talking to us.

Q400 Priti Patel: Do you think it is deliberate that they are not talking to you?

Sian Norris-Copson: It could feel like that. They make a bit of an effort. They announced the staffing review at a meeting we had with them earlier in the year. I think they thought we knew about it. The lack of communication is a real problem, which puts our backs up and does not help. I think they are probably trying to help a lot more than they were, but I guess they have restrictions on what they can and cannot do, too.

Chair: Thank you very much indeed for the work you do on behalf of Members’ staff, and thank you for taking the time to come in today. I hope that as a result of your and other evidence we will make some progress in the not too distant future.

Prepared 8th November 2011