Administration CommitteeWritten evidence submitted by the Independent Parliamentary Standards Authority (IPSA)

Introduction

1. We welcome this opportunity to put forward written evidence to the Committee with our plans for providing financial support to new MPs and to make the induction process as informative and straightforward as possible. This submission draws on our experiences from the 2010 General Election, lessons learned, and our plans for the 2015 General Election. It focuses on the financial support and training that we will provide to new MPs in relation to the business costs and expenses they incur in carrying out their parliamentary functions. It provides an indication of how we plan to approach the next general election and financial assistance which we will offer new MPs.1

2. We understand that new MPs face considerable challenges upon entering office and we will seek, insofar as we can, to make appropriate financial and information resources available to new MPs in 2015. In doing so, we will also need to bear in mind our general commitment to deliver value for money and our specific commitment to deliver savings to the taxpayer across the period of the comprehensive spending review.

3. There are some issues that affect new MPs that are outside IPSA’s control, such as high costs of running an election campaign and sourcing accommodation in the Palace of Westminster. Similarly, there are some issues where our responsibilities and those of the House interrelate, and we are working with House officials to ensure a smooth interface in such cases.

General Election 2015

4. IPSA has begun its preparations for the new intake of MPs, building on its experience of the 2010 general election, the 14 by-elections since, and the bedding-down of the Scheme itself and the online expenses system. MPs need near-immediate access to financial assistance and they require effective, informative training, both on the MPs’ Scheme of Business Costs and Expenses (“the Scheme”) and the online expenses system. Since May 2010, IPSA has introduced a range of improvements to help MPs with both cash flow and information. These have included the introduction of direct payments to a number of suppliers, the extension of the payment card to a wider range of expenses and the introduction of advances to help with cash flow, as well as improved online guidance and a more effective approach to induction. These improvements, along with some additional measures planned specifically for the General Election, are reflected in our election planning and will help to ensure that we provide MPs with the support they need in 2015. We have developed a draft General Election Handbook with our initial plans for 2015 and we are represented in the House of Commons General Election Planning Group to ensure that new and existing MPs’ needs are met and handled in the most efficient way possible. In the following sections we set out our plans for the General Election expected in 2015, which we will continue to develop in the intervening period.

Financial Assistance

5. As in 2010 we plan to attend the New Members Reception Area (NMRA), which usually runs for two weeks from the first Monday after polling day, to induct new MPs. At the NMRA we will gather the information (such as bank details) we need from each new MP so that we can pay their salaries (at the end of May), request payment cards from Barclaycard and set up accounts for them on the online expenses system and direct payment websites.

6. We understand that one of the most significant issues facing new MPs is cash-flow. Election campaigns can be expensive and put pressure on personal finances. Setting up a new constituency office and recruiting staff can be daunting tasks, and regular travel between the constituency and Westminster can be costly. Since 2010, we have introduced a variety of provisions designed to assist MPs with cash-flow and the initial costs of starting up their offices, and these, with some additional financial support, form part of our election planning for new MPs. A summary of the financial assistance which will be in place for MPs joining parliament in 2015 follows.

Pre-loaded payment card and the Barclaycard

7. Since 2010, we have extended the range of expense types payable onto Barclaycard payment cards to include (in addition to travel) utilities such as gas, water, electricity and heating fuels, council tax and business rates, office waste collection, insurance, hotels, TV licences, stationery, and constituency office telephone landlines. We plan to provide each new MP with a payment card to pay for a number of their business costs and expenses. At the NMRA, we will gather the necessary data required by Barclaycard and the Financial Services Authority to generate the payment cards for new MPs, such as their date of birth, nationality and home address.

8. In the interim while Barclaycard are producing their cards, we intend to provide new MPs at the NMRA with a temporary, pre-paid payment card for charging initial travel and hotel expenditure (as claimable under the Scheme) so that they have instant access to funding and do not have to pay these expenses from their personal funds. This is a new provision which we are introducing for MPs for the General Election. MPs will be able to use the temporary pre-paid payment card for charging these expenses until they receive their payment card proper.

Interest-free cash-flow and deposit loans

9. To further assist with cash-flow, we also propose to offer MPs an interest-free advance of up to £4,000, repayable at the end of the Parliament. We introduced these loans shortly after the last election, in response to feedback from MPs. When we meet new MPs for the first time following a by-election, we collect their bank details and help them to complete an advance application form. Funds will be paid into their account that day if possible, or the following working day. We will also complete this process with new MPs during their induction at the NMRA, and pay the funds into their accounts as soon as we can following that meeting.

10. We also provide MPs with deposit loans for their residential or office accommodation. Once MPs have identified their rental properties and provided the details and a draft lease to us, we can provide a deposit loan. This becomes repayable when the tenancy comes to an end, or when the MP leaves Parliament (whichever is earlier). As advances and deposit loans are repayable they are not deducted from MPs’ annual budgets: they are an additional facility to help with cash-flow.

Start-Up Budget

11. In response to feedback we received from new MPs in 2010, in 2011 we introduced a Start-Up budget for new MPs. This budget, currently set at £6,000, is designed to help meet the costs of setting up one or more constituency offices and it is available to all new MPs for a year following the date of their election. It is intended to meet the costs of “big-ticket” items, such as computers, desks, office redecoration, or any additional IT not provided for by the House Authorities. MPs may make purchases against this budget using the online expenses system, or, where appropriate, pay for items directly using the direct payment websites for office suppliers.

12. The Start-Up budget is therefore a new budget since May 2010, in addition to the regular annual budgets. By providing a dedicated Start-Up budget, we are ensuring new MPs can claim additional financial support to assist them with the one-off, but often significant, business costs and expenses associated with setting up an office from scratch.

Direct payments

13. Since 2010, IPSA has introduced a range of direct payments to a number of suppliers on behalf of MPs. These remove the need for MPs to pay, claim, or provide evidence, and are charged against the applicable budget in the Scheme. Direct payments currently include: train travel, where MPs can use their IPSA account on the Trainline website; office supplies from Commercial, Banner, and QC Supplies; residential and office rent; pooled staffing resources; and the costs of employment practice liability insurance.

Training

Inductions for MPs at the NMRA

14. Based on our current election plans and our experience of inducting new MPs following by-elections, we propose a two-stage approach to inductions in 2015 to ensure we provide immediate support on cash flow, as well as effective information and training. Both stages of the induction will be carried out by an experienced member of IPSA’s staff to ensure that questions can be answered immediately wherever possible.

15. At the first stage of induction, at the NMRA we will provide new MPs with an initial half-hour briefing. At this session, we plan to:

ensure they have access to funds without delay by giving them a pre-paid payment card and helping them complete an application for their advance loan;

collect the information we need to pay them and to set them up on the expenses system and for direct payments;

provide MPs with a copy of the Scheme and answer any urgent questions they may have about their expenses;

advise MPs on the relevant processes for placing staff on IPSA’s payroll; and

advise them on next steps.

16. New MPs will also require thorough training on the rules in the Scheme, along with training on claiming business costs and expenses on the online system. As the second stage of induction, we therefore plan to offer all new MPs a second, longer one-to-one training session with an IPSA staff member on the Scheme and online expenses system.

One-to-one training

17. The proposed one-to-one sessions will last for approximately 90 minutes and the MP will receive training on the Scheme, how to claim and any other issues they want to cover relating to their expenses. During this time MPs will be assessing their staffing needs and this session will include information on the various provisions in the Scheme for employing staff, contracts and putting staff on the payroll. We are also in discussion with the House Authorities to ensure that our induction process provides joined-up provision of information to MPs and data-sharing where appropriate: for example, on staffing and employment issues which may relate to both IPSA and the House of Commons Personnel Advisory Service (PAS).

Wider training to support parliamentary functions

18. Some new MPs may wish to undertake training on a variety of subjects to assist them in carrying out their parliamentary functions. Where this training is not provided centrally by House Authorities or another source, MPs may claim for the costs for training courses, and any necessary travel and subsistence, from the applicable budgets in the Scheme.

Training for MPs’ staff

19. Many MPs choose to delegate authority for their business costs and expenses to a staff member or “proxy”, although they retain the responsibility for all claims submitted on their behalf. To ensure that these proxies have an understanding of the provisions in the Scheme and are familiar with operating the online expenses scheme, we intend to carry out a number of regional training sessions for MPs’ staff. Assuming a May 2015 election, these sessions will be planned to take place from June onwards, once MPs have recruited their staff. Locations, dates and venues will be decided upon after polling day, once the geographical spread of new MPs is known. A booking form for the sessions will be made available on the IPSA website for staff to request a place. The sessions will be free to attend and the costs of any necessary travel and subsistence may be claimed from IPSA. We will also run staff training sessions on the Parliamentary estate for those staff based in Westminster or for those for whom a London-based session would be most convenient.

20. Written guidance on the Scheme and “how to guides” on subjects such as making claims or using direct payments and the payment card are always available on the IPSA website for MPs and their staff. We also provide additional information where this might be helpful through our email bulletins; more specific guidance or updates to cover improvements and end of the financial year deadlines and processes; and drop-in sessions for MPs and their staff.

Accommodation Review

21. Later this year we intend to commence a review of MPs’ accommodation (both residential and office) to explore the budgets for accommodation and related issues. We know that locating suitable accommodation within budget and providing the necessary documentation to IPSA are challenges for new MPs and we will look at ways to help MPs to make this process as efficient as possible.

Conclusion

22. In 2010 Parliament experienced one of the largest turnovers of MPs, with 233 new MPs entering office at a time of immense public scrutiny. New MPs, mindful of the experience of the last Parliament, had to get up to speed with their new roles as elected MPs, and returning MPs had to become accustomed to a new system and set of rules. Three years since the previous general election, Parliament and IPSA alike have a better understanding about being accountable for business costs and expenses and the support required for MPs carry out parliamentary functions, respectively.

23. Alongside our General Election Planning for MPs, we are putting processes in place for those MPs who choose to stand down in advance of the General Election and for those that are re-elected.

24. We will require additional funding to prepare for and implement measures for the election and this will be reflected in our 2014–15 and 2015–16 Estimates to the Speaker’s Committee on IPSA.

25. Finally, the Committee may wish to note that we will be announcing, later this year, details of the new remuneration package for MPs. This revised package will be implemented from 2015.

20 March 2013