MP expenses body 'must cut costs'

7 July 2011 Last updated at 15:54 GMT Many MPs have criticised their new expenses system The MPs' expenses body is safeguarding public money but must do more to streamline its procedures and cut costs, the National Audit Office says.

The Independent Parliamentary Standards Authority (Ipsa) was praised for boosting public confidence badly dented by the 2009 expenses scandal.

But most MPs told the National Audit Office they were now under-claiming and covering legitimate costs themselves.

The NAO added: "Both sides should make greater effort to find common ground".

Ipsa was set up following the MPs' expenses scandal with the aim of restoring public faith in the way MPs were claiming taxpayers' money, and started work after the general election.

'Adversarial relationship'

But it has since been criticised by some MPs for being overly bureaucratic, too expensive and too slow to respond to claims.

The NAO report said this "adversarial relationship" was "not conducive to the public good for this to persist".

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The new scheme does not given enough importance to to helping MPs spend in a cost-effective way”

End Quote National Audit Office It said ?118m had been paid out by Ipsa to MPs in 2010-11, ?43m of which went on MPs' salaries, ?56m on staff salaries and ?19.5m on other expenses.

The public spending watchdog praised Ipsa for establishing itself so quickly and boosting public confidence in the scheme in an "impressively short period" and said it had "convincingly" demonstrated there had been no systematic abuse of the new scheme by MPs and 98.6% of claims had been paid out accurately.

But the NAO added: "The new scheme does not given enough importance to helping MPs spend in a cost-effective way."

The report noted 38% of claims made had been for sums smaller than the amount they cost to process and questioned whether the checking process had to be so thorough.

It also noted 100% of claims - of which 134,696 were processed in 2010-11 - had been checked at least once, and some more, but only 0.5% had been rejected.

'Purchasing power'

It recommended a more "risk based approach" - for example, identifying low risk claims and carrying out spot checks, rather than physically checking every single claim that comes in - as they were published anyway.

MPs also had little advice on how to cut their costs, the report said, and were offered "a high degree of flexibility" in the way they bought goods and services - rather than buying in commonly used services - like transport - centrally and making more of "bulk purchasing power".

And it estimated MPs had been paying out about half of their basic pay on items, which they then had had to claim back - although Ipsa had extended its use of advances, payment cards and direct payment.

"The scheme as a whole will offer better value for money if Ipsa accelerates the streamlining of its own procedures and gives greater priority to minimising the costs necessarily falling on MPs," the report said.

It says Ipsa should work with MPs to come up with a plan to reduce the amount of time MPs were spending on their claims.

The NAO report said a majority of MPs surveyed - 70% - agreed major changes had been needed on expenses and 75% believed all claims should be backed up by evidence of money spent.

But 85% said the new system was such a burden it was hindering them in doing their jobs - and despite some changes, they were still finding it "hard to operate" and "laborious".

They told the NAO they were spending four hours a month on dealing with expenses, and their staff 12 hours a month - time which the NAO calculates costs ?2.4m a year.

And although the report found most MPs had not claimed the maximum expenses allowed - the vast majority, 91%, believed they were having to subsidise their own work themselves.

Under the new scheme - 15% less had been paid out in expenses than was done under the old scheme the previous year. But as MPs' claimed more money was coming out of their pockets, it was hard to say "whether the reduction represents a genuine efficiency improvement".

MPs were under-claiming for various reasons, the report says - including because the process was too complex and because of concerns about the claims being published.

The reasons for the stand-off between MPs and Ipsa were likely to include a dislike of change among long-serving MPs, a reluctance to be seen to be claiming too much and the complicated claims process.

NAO head Amyas Morse said: "To improve the present uneasy relationship between the authority and many MPs, both sides should make greater effort to find common ground."

A spokesman for Ipsa welcomed the report's findings but said it acknowledged that while progress had been made "there is more for us to do" and said it was already acting on some of the NAO's recommendations.

He added: "As a regulator created to establish a system of meeting MPs' costs and expenses in which the public can have confidence, the recognition that we have made considerable progress is very significant. The report itself also contributes to our goal - providing assurance to the public that the new system is working well."

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MPs approve expenses review date

7 July 2011 Last updated at 20:06 GMT Ipsa was created by the 2009 Parliamentary Standards Act following the expenses scandal MPs have agreed changes to a committee which will seek to change their independently run expenses scheme.

The old Members' Allowances committee - which has been dormant since the new scheme began - is being renamed the Members' Expenses Committee.

It will review the Parliamentary Standards Act 2009, which set up the new expenses body, by 31 December.

After the expenses scandal, all parties agreed that the old system of self-regulation of expenses must end.

The Independent Parliamentary Standards Authority has been running the new expenses scheme since the general election.

'Needs amendment'

But many MPs have expressed anger at the way the new system has been run complaining it is too bureaucratic, too complex and time consuming and that they are having to fund some of their expenses out of their own pockets.

Although Ipsa is independent - MPs have decided to review the legislation which set it up, with a view to making changes.

Shadow Commons deputy leader Helen Jones said the scheme "clearly needs amendment": "It is imperative that we get to a sensible position which both maintains confidence in the scheme and does not use up too much time of honourable members, who are, I think, fast becoming the highest paid data-inputting clerks in the country."

A National Audit Office report out on Thursday says Ipsa is safeguarding public money - but should do more to address the amount of time MPs and their staff were spending inputting claims and the "labour intensive nature of certain elements of the claims process".

Deputy Commons leader David Heath said the government was "keen that the committee is set up without any more unnecessary delay and gets on with the important work the House has tasked it with."

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Peer jailed for fiddling expenses

1 July 2011 Last updated at 16:46 GMT Lawyers for Lord Hanningfield said his age and poor health meant it was "cruel" to jail him Former Tory peer and Essex Council leader Lord Hanningfield has been jailed for nine months for fiddling his parliamentary expenses.

Paul White, 70, was convicted in May of six counts of false accounting relating to nearly ?14,000 of claims.

White has said he will seek leave to appeal against the verdict. If granted, the Court of Appeal will hear the case.

He had claimed money for overnight stays in London when he had actually returned home to Essex.

Peers, who are not paid a salary, were able to claim up to ?174-a-night when attending Parliament if their main home was outside the city.

Mileage claims

But during his trial in May, the court was told White submitted false claims for hotel bills including one when he was actually on board a flight to India at the time.

He also fraudulently claimed for train fares and car mileage.

White is the sixth parliamentarian to be jailed for expenses fraud. Tory peer Lord Taylor and four former Labour MPs - Eric Illsley, David Chaytor, Jim Devine and Elliot Morley - were all given prison sentences.

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Great trust was placed in peers to be honest in their claims for expenses. Lord Hanningfield and others have broken that trust”

End Quote Mr Justice Saunders Chaytor and Illsley have since been released under the home detention curfew scheme.

Passing sentence at Maidstone Crown Court, Mr Justice Saunders said the case could be "distinguished to some extent" from those of the former MPs as there were "ambiguities" in the expenses system in the Lords

"As I said in the case of Lord Taylor, the evidence I have heard suggests that the expenses scheme in the Lords was treated more flexibly than in the Commons," he said.

But the judge said it was clear that White had claimed for expenses "he did not incur" and his dishonesty had had "serious consequences" for the reputation of Parliament.

"He knew when he accepted a peerage that the job of a working peer was unpaid and he did not have to accept the honour," he said.

"It is not for me to say whether peers should or should not be paid but whatever you think of the scheme, it was not for any peer to take money to which he was not entitled, on the basis that he believes he is worth it."

"Great trust was placed in peers to be honest in their claims for expenses. The public expects no less of them. Lord Hanningfield and others have broken that trust."

'Cruel and unjust'

Lawyers for White said the offences had taken place "in six months of the prosecution's own choosing".

"The reality is that this man has actually given his own money for public service for all the 40 years he has been involved in it," said defence counsel Alun Jones QC.

White's poor health meant it was "cruel and unjust" to imprison him, he added: "It would only seek to appease a public opinion that has been moulded by the publicity over the past two years."

The BBC's Helen Fawkes said the judge had taken White's reportedly fragile mental state and his age into account before handing down the nine-month sentence - the shortest jail term of any resulting from the parliamentary expenses scandal.

She said the judge was told that the former peer had been diagnosed with clinical depression and had expressed suicidal ideas at the prospect of being sent to prison.

Mr Justice Saunders acknowledged a jail term would be harder for White than "for others who are mentally and physically fitter" but said there had to be consistency in sentencing across different expenses cases.

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Expenses fraud MP 'kept claiming'

2 June 2011 Last updated at 15:23 GMT Eric Illsley was jailed in February and released in May Former Labour MP Eric Illsley was paid thousand of pounds in expenses - after pleading guilty to expenses fraud.

Illsley admitted his guilt on 11 January but refused to resign his seat until 8 February, two days before he was jailed.

He sucessfully claimed ?2,253 for photocopier hire and ?19.95 for food and travel in the intervening period.

The expenses watchdog Ipsa said under the rules, he was entitled to claim up until the point he was no longer an MP.

Illsley was paid a total of ?6,766 for claims submitted in January and February, but Ipsa said there was no provision in its rules to claw the money back.

He was jailed for a year after admitting to expenses fraud totalling ?14,000. He was released last month and is serving the rest of his sentence under a home detention curfew.

The details of Illsley's claims were included in the latest tranche of expenses figures released by the watchdog - revealing money paid to MPs in January and February this year.

In total, almost 25,000 claims were submitted and ?3.2m was paid. Eighty four MPs had a total of ?4,633 they asked for rejected.

Technicalities

Ipsa also revealed that MPs have spent ?880,000 on official payment cards - similar to credit cards - since May 2010.

The cards - which have a monthly credit limit of ?4,000 - were originally meant to pay for travel alone, but can now also be used for hotels, utilities and other bills.

BBC Radio 5 live's political correspondent Chris Mason said the figures should be treated with some caution because the totals relate to claims handled in the two-month window, rather than expenses actually run up in that period.

He also pointed out that a number of the rejected claims were thrown out on the grounds of administrative errors or technicalities.

In one case, Lib Dem Transport Minister Norman Baker had a ?15 bill for a "restaurant meal" turned down because it was not categorised as a legitimate expense.

The reason was that MPs can claim for dinner if the House of Commons sits later than 7.30pm and on the day in question, it rose at 7.29pm.

Overall, the most common reason for claims being rejected was "insufficient evidence" - in other words, non-provision of receipts or tickets for travel.

Ipsa was created after the expenses scandal in 2009.

Its rules was relaxed in March following complaints from MPs that it was too bureaucratic and "anti-family".

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