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".

Continue reading the main story

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."

View the original article here

UK Libya operation costs '£260m'

23 June 2011 Last updated at 12:21 GMT Liam Fox: "We place a higher value on human life than the Gaddafi regime does"

UK military operations in Libya could cost about ?260m over six months, the defence secretary has said.

In a written statement to MPs, Liam Fox said that if the Nato-led mission lasted that long, costs would be "in the region of ?120m".

He added that up to ?140m would also be spent replacing munitions.

The UK has been contributing to the operation to enforce a no-fly zone since 19 March. Overall costs will be met by Treasury reserves.

Earlier, Dr Fox said avoiding civilian casualties drove up costs but the spending showed the UK held the "higher moral ground".

When military strikes against Col Muammar Gaddafi's forces began, Chancellor George Osborne estimated that the cost of British involvement would be "in the order of tens of millions of pounds, not hundreds of millions".

But last week, Treasury Chief Secretary Danny Alexander said the cost could run into "hundreds of millions" of pounds.

Valuing human life

Ahead of his announcement, Dr Fox people would "have to take into account that we have used more expensive precision weaponry so that we minimise civilian casualties in Libya.

"And if we are going to fight operations in the future based on minimising civilian casualties, there is clearly a financial price to pay."

He added: "I think that shows that we are on the moral high ground and that we place a higher value on human life than the Gaddafi regime."

Shadow defence secretary Jim Murphy said Nato allies had to do more to reduce the British contribution.

'Fragile' morale

He said: "Many people at home will be thinking 'Why is it always Britain that has to do this?' and I think it is important that Britain does contribute, but I think we want to see some more of our Nato allies, particularly the European Nato allies, do more of the campaign [and] more of the fighting."

In a later statement, Mr Murphy added: "We want the government to be clearer on what stresses and strains operations in Libya are making on the core defence budget, and whether our standing commitments are, or will be, affected by the ongoing conflict."

Pressed by shadow chancellor Ed Balls about the issue of costs during Treasury questions in the Commons on Tuesday, Mr Osborne said the cost was being met by the Treasury special reserve and was "very much lower than the ongoing operation in Afghanistan".

Earlier this week Air Chief Marshal Sir Simon Bryant, the RAF's second-in-command, said morale among RAF personnel was "fragile" and their fighting spirit was being threatened by being over-worked because of operations in Libya.

But Prime Minister David Cameron said on Tuesday that military leaders were "absolutely clear" the mission could be kept going for as long as necessary.

View the original article here

Bid to cut Whitehall buying costs

2 June 2011 Last updated at 23:54 GMT Prime Minister David Cameron appointed retail tycoon Sir Philip to lead a review The government is to centralise the buying of goods and services across departments in a bid to save ?3bn.

The move follows a review by tycoon Sir Philip Green who said Whitehall was not making the most of its scale, buying power and credit rating.

Sir Philip found various departments had signed multiple contracts with major suppliers at different prices.

Cabinet Office minister Francis Maude said departments paying different rates for the same goods was "bonkers".

The plan is to create a central government procurement team which would buy goods and services such as vehicles, stationery and office furniture at a single set price.

Continue reading the main story

Sir Philip Green is one of the UK's most successful retailers.

With a personal fortune of more than ?4bn, he owns the Arcadia Group, whose fashion chains include Topshop, Burton, Dorothy Perkins, Evans and Miss Selfridge.

In 2009 Arcadia made pre-tax profits of ?213.6m, 13% higher than the previous year.

Sir Philip also owns department store chain BHS, whose fortunes he has transformed since he purchased the then-ailing company in 2000.

He prides himself on his ability to trim costs from his businesses.

However, Sir Philip's appointment raised eyebrows.

His wife Tina is the direct owner of Arcadia, and she is officially a resident of Monaco. This enabled her to gain a tax-free ?1.2bn dividend in 2005.

Sir Philip also made headlines in 2004 when he made a failed hostile takeover bid for Marks & Spencer.

Sir Philip, the owner of retail giants Topshop and BHS, said the government's ?2bn telecoms bill could be cut by up to 40%, and he pointed out that some departments had spent ?73 on boxes of paper while others had got them for ?8.

Other examples included different departments and agencies paying between ?350 and ?2,000 for the same laptops and between ?85 and ?240 for the same printer cartridges.

Spending 'madness'

Sir Philip said civil servants should treat the buying of goods and services as if they were spending their own money.

Mr Maude, who is also Paymaster General, said: "It is bonkers for different parts of government to be paying vastly different prices for exactly the same goods.

"We are putting a stop to this madness which has been presided over for too long. Until recently, there wasn't even any proper central data on procurement spending."

He said centralised procurement could save more than ?3bn a year by 2015 - a saving of 25%.

Mr Maude said "significant changes" had already been made over the past year to cut procurement spending by ?1bn.

He also stressed the government's commitment to buying more goods and services from smaller suppliers.

View the original article here