Parliamentary standards: annual review of the MPs' expenses scheme

Comments from ACCA to the International Public Sector Accounting Standards Board, February 2011.

General comments

We believe that this consultation is timely and will help IPSA to develop its approach for an effective and efficient MPs' expenses scheme in the future. We support the development of a 'principles' based approach opposed to one that is rules based for MPs expenses, and set out our reasons below. We strongly believe that accountability and transparency should be the underpinning factors of the new scheme together with efficiency and simplicity. The scheme should be designed to be as streamlined as far as possible and the need to make expense claims minimised. Also, we recommend that when making changes to the existing system, IPSA should identify best practice 'principles based' expenses systems that operate in both the private and public sectors to see what lessons can be learnt.

We haven't attempted to address all of the 30 questions below. Instead we have responded to a few specific issues raised. Overall, in our view the expenses system needs new thinking on its design rather than just tweaking around the edges. It needs to go much further than what is proposed.

Specific Issues

Q1. What are your views on the choice between having an Expenses Scheme based on prescriptive rules and a Scheme which relies much more on MPs taking greater personal responsibility for their claims, within a framework of general principles? 

As stated above, we are supportive of a principles based framework supported by examples of what MPs can and can't do in relation to making claims. In our view the expense system should be flexible enough not to stop an MP doing what he/she is supposed to be doing. A principles based system has both the benefits of being less bureaucratic and more readily understandable than the current scheme. In contrast, a rules based system (such as the one that exists) may provide less scope for misinterpretation, but will be costly to maintain and will be overly prescriptive, thus adding to the complexity.

We note that there are already some high level principles set out in the existing expenses scheme, such as MPs behaving with probity and integrity and not exploiting the system for personal financial advantage. We believe that these could be strengthened further with some lower level principles, such as what and what cannot be incurred in specific circumstances. These would be supported with case studies and examples as to how this would work in practice. There are many examples of expense schemes in both the public and private sectors which IPSA could draw upon to develop an effective expenses scheme for MPs.

Q2. What impact do you believe the MPs' Expenses Scheme and the specific issues within this consultation may have on equality and diversity within the House of Commons?

We are pleased to see that a full equality impact assessment (EIA) will be performed before the introduction of any new expenses scheme. We would expect that specific issues relating to MPs age, gender, transgender, marriage and civil partnership, sexual orientation, pregnancy and maternity, disability, race/ethnicity and religion and belief will be considered as part of the EIA, particularly, those issues that could have an adverse impact on existing MPs or potential MPs.

Q11. Should the CORE and GAE budgets be merged? What should the overall budget be? 

We agree that both budgets should be merged as this would simplify the system, reduce administration costs and provide some flexibility for MPs to manage their budget within an overall limit.

Q12. Should there be a change to the 90 day rule for making claims? If so what would be the best alternative?

Over a number of years there has been a strong emphasis on public services (including Parliament) to produce timely and accurate financial accounts. Reporting timescales have become much shorter. With this in mind, the same standards of timeliness should apply to MPs submitting claims. Three months (90 days) is considered generous in most private and public sector organisations. Rather than dispensing with the 90 day rule or increasing it, we would advocate IPSA explore shortening the timescales to facilitate budget monitoring.

Q13. Should MPs be able to delegate authority to submit claims to their proxies?

We believe there is a case for recognising proxies to submit claims, but that it must be the decision for the individual MP and he/she who have to accept full accountability.

Q14. Should MPs be able to redact any information on the evidence provided to support a claim? If so, should the type of evidence where this is permitted be limited to a specified list of items? 

We agree that there will be times when MPs will need to redact information to protect personal details. This issue is a good example of what could be included in a principled based system supported by case study examples on what and what could not be redacted e.g. bank account or credit card details. A list could be provided.