3 Funding and the Independent Parliamentary
Standards Authority (IPSA)
26. IPSA was provided with space within the New
Members Reception Area (NMRA) so that new MPs could quickly register
with them in May 2010. IPSA is represented on the General Election
Planning Group for 2015 and intends once again to be present in
the NMRA.
27. Ruth Fox and Matt Korris of the Hansard Society
have suggested that IPSA suffered severe reputational damage among
new MPs in the early weeks of the 2010 Parliament; our own experience
confirms that.[20] More
than half of new MPs reported significant levels of dissatisfaction
from their early contacts with IPSA and 85% were dissatisfied.
We have been told that IPSA's induction processes were over-bureaucratic
and complicated, and that in 2010 IPSA's rules on reimbursing
payments made by new Members caused significant financial hardship
for some new Members as they sought to employ staff, source office
equipment and simply send letters or make phone calls.[21]
One Member told us that he was out of pocket at one stage by £5,000;
another that the financial pressure caused by set-up costs was
difficult for new Members without private means. [22]
28. IPSA's Chief Executive, Andrew McDonald,
accepts criticisms relating to the 2010 induction period: "I
am quite clear that there were elements of our service in the
summer of 2010 that fell below a level that we would want to deliver."[23]
He wrote to all Members in the autumn of 2010 to apologise for
that, and IPSA has since used the experience gained then, and
at 16 subsequent by-elections, to refine its processes and to
offer improved services to new Members.
29. IPSA is planning a new, two-stage induction
process for new Members and for the staff who act as 'proxies'
in filling out Members' claim forms. Stage one, in the first few
days after election, will be a brief introduction to the claims
system, with a second, longer and more detailed session on the
scheme and its rules to follow later. This twin-track approach
results from feedback about the sheer amount of information new
Members have to absorb during their first days and weeks in Westminster,
at a time when they may not yet have a permanent office base,
or residence, in London. Training sessions for staff will also
be held in the regions, seeking to address another of the 2010
criticisms.
30. IPSA will also extend its telephone answering
times post-election to offer a more convenient service to new
Members. The fact that Members may usually call IPSA only between
1pm and 5pm each working day remains contentious; Andrew McDonald
says that IPSA's judgment is that it can most effectively offer
support that way, given its limited resources. Morning calls will,
however, be enabled post-election, and this is welcome.
31. We recommend that a dedicated
phone number, adequately staffed, should be established by IPSA
which is open at least 9am - 5pm each working day specifically
to support new Members in the first three months after the election.
This should be in addition to its telephone service for returned
Members.
32. IPSA, to be fair, was itself a new body in
2010, created in a few months from a standing start to devise
and operate an entirely new system. Among the more significant
changes that have occurred since May 2010 is a shift towards direct
payment of Members' expenses claims, rather than their reimbursement
(with 53% of claims now paid direct, as opposed to 15% in 2011).[24]
This reduces the need for Members to make payments from their
own pocket and wait for reimbursement. IPSA also repays reimbursable
expenses in an average of about 9.4 working days now, against
a target of 12 days.[25]
IPSA will also make new arrangements to ensure that new Members
have immediate access to a pre-paid payment card for initial expenses,
particularly travel and accommodation in London, before permanent
payment cards are operational, and that interest-free loans and
start-up budgets will be available for 'big ticket' office furniture
and equipment and for deposits on rented offices. The cards themselves,
once fully operational, are able to pay for a wider range of equipment
and other costs than was the case in May 2010.[26]
IPSA has taken welcome steps
to learn lessons from a less than satisfactory induction performance
in 2010, but 2015 will be a further test that a more customer-focused
ethos has become embedded.
33. It remains the case that the majority of
Members of Parliament, new and returning, require both offices
and living accommodation in London and in their constituencies.
There are significant costs attached to the provision of both,
and pressures can arise on new Members in particular as they seek
to begin a new job, employ new staff and move home. MPs currently
earn £66,396 a year, and more than half the MPs entering
Parliament in 2010 reported that they had taken a pay cut to do
so.[27] One who contributed
to our inquiry talked of the "huge financial pressure"
that arose from setting up an office, employing staff, finding
somewhere to live, travel costs and so on.[28]
As some Members, not anticipating this situation, declared in
2010 election manifestos that they would not claim expenses, or
only the bare minimum, this has put them under additional financial
pressure.
34. One Member made the point that most new MPs
had given up previous employment or taken leave for the period
of the campaign, leaving them without earnings in the weeks before
arriving at Westminster, as well as waiting some weeks for reimbursement
for necessary spending.[29]
A member of our Committee told us that they were significantly
out of pocket after booking a hotel for the first few weeks which
did not have a parliamentary rate. Andrew McDonald told us that
IPSA wants to provide a seamless information service to new Members
about hotel services and rates.[30]
The Fixed-term Parliaments Act of 2011 means that the date of
the election in 2015 is more certain than it has been for previous
elections. This means that IPSA could identify hotels now that
would offer appropriate rates for 2015.
35. We recommend that IPSA
work with the House Service to ensure that new Members have access
to information on which hotels offer parliamentary rates and how
they can be claimed in order to facilitate temporary living accommodation
in the first few weeks on arrival in Westminster.
36. John Sills, Director of Policy at IPSA, likened
the situation of new MPs arriving in London to that of a business
expatriate. After the election an MP comes down to London for
the first time and does not really know where to find somewhere
to live and is having to do so when they have many other things
to do as a new MP. He said the approach of providing services
similar to those of a business expatriate was one IPSA wanted
to explore.[31]
37. We recommend that IPSA
seriously explores the model often used by businesses with expatriates
relocating to other cities or countries (i.e. provision of an
initial budget and the services of an estate agent). If it is
established by May 2014 that such a scheme is not viable, then
we strongly recommend that the amount on the pre-paid payment
card is appreciably increased from £500 to cover the initial
reimbursable costs for the first few weeks, including potential
hotel bills.
38. There is considerable pressure on office
accommodation within the Parliamentary Estate with little capacity
for flexibility. Some Members require space for more than two
staff, including interns and inevitably that puts pressure on
accommodation. Our predecessor Committee in the 2005 Parliament
set as a guideline that Members should expect to accommodate no
more than two staff on the Estate;[32]
although that average has been maintained among the 650 Members,
there are some Members who have substantially more members of
staff routinely in their Westminster offices.
39. Matt Korris of the Hansard Society told us
that IPSA's approach to funding office accommodation in effect
encourages Members to base staff at Westminster "for free"
in accommodation directly provided by the House rather than in
their constituencies where they will have to pay for and have
reimbursed the costs of renting and equipping a constituency office.
The cost of being based in a constituency is also increasing for
some Members as 'host' organisations, such as the local political
party, can no longer afford offices where a Member might rent
space. Members therefore need to fund their own offices with their
own name above the door.
40. IPSA are due to review Members' accommodation
this financial year.[33]
The Accommodation and Logistics Service of the House is taking
a keen interest in that review as it is hoping it will look at
all factors that affect Members and their accommodation needs,
both personal and office accommodation in Westminster—including
addressing the question of this perverse incentive to base staff
at Westminster.
41. Matt Korris pointed out that most voters
would probably prefer the bulk of an MP's staff to be based in
the constituency and that "free" accommodation at Westminster
is in fact paid for by the House Service, and therefore from the
public purse. Given the central London location this will carry
a premium. Some Members, particularly those with constituencies
comparatively far from London, have also noted that an inability
to locate their staff in the "free" offices at Westminster
means that their published expenses claims can be significantly
higher than the claims of those whose constituencies are closer
to central London.
42. IPSA appears not to accept that there is
any hidden incentive for Members to locate staff at Westminster
rather than in their constituencies, but John Sills, Director
of Policy, does agree that the question has been raised and that
it is causing concern to some Members and within the House.[34]
43. We recommend that a dialogue
takes place between IPSA and the House Service in order to develop,
before May 2015, a payment system related to office accommodation
which reflects the variety of ways in which Members want to run
their offices. Unintended but inefficient incentives to base staff
at Westminster should be addressed.
20 Ruth Fox and Matt Korris, A Fresh Start? The
Orientation and Induction of new MPs at Westminster following
the 2010 General Election, Parliamentary Affairs (2012),
No. 65, p. 564-5 Back
21
Ev 46 [Kate Green MP], Ev 47 (Dr Therese Coffey MP] Back
22
Ev 47 [Alex Cunningham MP] Back
23
Q 40 Back
24
Q 32 Back
25
Q 50 Back
26
Ev 36 Back
27
Hansard Society, A Year in the Life: from member of public
to Member of Parliament; interim briefing paper, June 2011 Back
28
Ev 46 [Nicky Morgan] Back
29
Ibid. Back
30
Q 38 Back
31
Q 38 Back
32
Administration Committee, Third Report of Session 2005-06, House
of Commons Accommodation, HC 1279, para 105 Back
33
Notes of discussion, 28 January 2013 http://www.parliament.uk/business/committees/committees-a-z/commons-select/administration-committee/formal-minutes/session-2012-13/ Back
34
Q 46 Back
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