APPENDIX
Memorandum submitted by the Parliamentary
Commissioner for Standards
Complaints against Mr Michael Trend
MP
THE COMPLAINT
1. On 15 December, 2002 the 'Mail on Sunday'
published an article claiming that Mr Michael Trend, the Member
for Windsor, had improperly submitted claims under the Additional
Costs Allowance (ACA) in respect of a London home which he did
not in fact occupy. The article alleged that, although Mr Trend
was claiming the allowance in respect of additional costs incurred
in spending nights in London on parliamentary business away from
his Windsor constituency, he was in fact returning to his constituency
home each evening rather than remaining in London.
An Exchange of Letters
2. The press subsequently reported that, following
the appearance of the 'Mail on Sunday' article, Mr Trend had swiftly
been in touch with the Director of Operations in the Finance and
Administration Department of the House of Commons, Mr Archie Cameron.
Their discussions had resulted in an exchange of letters on 19
December between Mr Trend and Mr Cameron. In the letter to Mr
Cameron, Mr Trend said:
"I am now clear that I had a misunderstanding,
honestly and genuinely held, about the terms of the ACA. As a
result, I made claims on my Windsor residence which I now realise
fall outside those terms. I very much regret this happened and
I would like to offer my apologies to the House. I, of course,
wish to set the matter right at once and I have offered to pay
whatever is outstanding which I understand is £90,277. I
understand that the House authorities are content for me to do
so. I am grateful to you for your help in this matter".
3. In response, Mr Cameron wrote:
"Thank you for your letter of 19th December
in which you state that you now realise that you made claims on
your Windsor residence which were not in accordance with the terms
of the ACA and that you are anxious to pay the sum in question.
I am grateful to you for bringing this matter, which I now regard
as closed, so speedily to a conclusion by making prompt arrangements
to repay the sum in full. Once the sum is paid in full your outstanding
account will be settled".
Complaints by Members of the Public
4. On the day the original 'Mail on Sunday'
article appeared, Mr Kevin Cochrane, a constituent of Mr Trend,
e-mailed my office asking that the allegations as detailed in
the paper be investigated and for information on the procedure
for making a formal complaint. After subsequent telephone and
e-mail contact in which he was advised that, in accordance with
the procedures laid down by the House, I would need a signed letter
of complaint in order to proceed, Mr Cochrane informed my office
on 23 December that a letter had been sent. A formal letter signed
by Mr Cochrane, dated 16 December, was received in my office on
2 January 2003. A copy of this—and of the 'Mail on Sunday'
article of 15 December enclosed with it—is at Annex A.
5. After I received the initial complaint from
Mr Cochrane, I received eight others; four apparently came from
constituents of Mr Trend and four from others. These contained
various combinations of the following elements: concern at the
press reports that improper claims had been made by MPs against
allowances; questions as to whether (whatever disciplinary decision
might be taken by the House) the criminal law should not be invoked
if the reports were substantiated; and a more generalised concern
as to whether adequate financial controls were exercised by the
House authorities over expenses claims made by Members. In addition
an e-mail from another member of the public making similar points
was sent directly to Mr Speaker and forwarded to me, and my office
received an e-mail to which we responded but which was not followed
up by the sender.[4]
CONTEXT
The Additional Costs Allowance
6. In order to assess the allegations against
Mr Trend it is necessary first to understand the rationale of
and conditions attached to the Additional Costs Allowance (ACA),
as well as the provisions of the Code of Conduct approved by the
House and other relevant matters.
7. The purpose of the ACA was set out in a Resolution
of the House in 1971 when the allowance was introduced. The relevant
part of the Resolution read:
"... provision should be made for Members
of this House ... to receive an allowance in respect of additional
expenses necessarily incurred by any such Member in staying overnight
away from his only or main residence for the purpose of performing
his parliamentary duties..."
8. Members with Inner London constituencies
cannot claim ACA and automatically receive a London supplement.
Members with Outer London constituencies can elect to claim ACA
or London Supplement. Members—like Mr Trend—whose
constituencies are outside London can claim ACA either in London
or the constituency. (Ministers and office holders automatically
receive London Supplement (unless they are provided with an official
residence) but they may claim ACA for overnight expenses in their
constituency.)
9. Members with homes in both the constituency
and London are required, in writing, to tell the Finance and Administration
Department which home is their main home or residence. The main
home does not qualify for ACA. The latest edition of the Green
Book (which sets out details of allowances for Members) says:
"... a nomination form (available from the Fees Office)
must be completed to register the address of your main home, and
whether you will be claiming ACA for London or the constituency.
Please let the Fees Office know of any subsequent changes".
10. Similar statements have appeared in earlier
versions of the Green Book. Mr Trend entered the House on 28 April
1992. The edition of the Book issued to all Members on 12 May
of that year said:
"The Additional Costs Allowance (ACA) reimburses
Members for expenses necessarily incurred in staying overnight
away from their main residence in either London or the constituency
(but not both) for the purpose of performing their Parliamentary
duties."
"On entering the House for the first time
Members should complete an option form ... which registers with
the Fees Office the address of the main home and of their intention
to claim ACA in either London or the constituency. This will remain
in force unless changed by circumstances (ie becoming or ceasing
to be a minister or office holder), or a new form is completed
and returned to the Fees Office consequent upon a change in the
address of the main residence."
11. Additional Costs are those necessarily incurred
in staying away from the main home for the purpose of performing
parliamentary duties. These include:
- Mortgage interest (but not capital) and the costs
involved in purchasing accommodation;
- rental costs;
- hotel costs;
- utilities (heat, light, etc);
- council tax;
- food;
- non-capital repairs, decorations and furnishings.
The Green Book says that supporting evidence must
be provided by the Member for major items of expenditure such
as mortgage interest or rent. The amount which may be claimed
by a Member under the allowance has increased annually: in 1992-93,
the total which could be claimed was £10,786; during the
current financial year, claims totalling up to £19,722 may
be submitted.
12. Claims for ACA are usually submitted monthly
in arrears. The latest edition of the Green Book tells Members:
'your signature on the claim effectively certifies that the
amount claimed has been spent on the additional costs necessarily
incurred in staying overnight away from the main home'.
Code of Conduct
13. The Code of Conduct for Members of the House
includes a provision that:
"No improper use shall be made of any payment
or allowance made to Members for public purposes and the administrative
rules which apply to such payments and allowances must be strictly
observed".
The Code also provides that:
"Members shall at all times conduct themselves
in a manner which will tend to maintain and strengthen the public's
trust and confidence in the integrity of Parliament and never
undertake any action which would bring the House of Commons, or
its Members generally into disrepute".
The Law on Obtaining by Deception
14. As Mr Cochrane and a number of other members
of the public who wrote to me have pointed out, in addition to
being a possible breach of the internal discipline of the House,
the misuse of parliamentary allowances may in certain circumstances
raise issues in relation to the criminal law. At Annex C is a
briefing note prepared by the House's Legal Service's Office on
the law on obtaining by deception. I return to this question later.
I mention the point at this stage simply to mark the potential
seriousness of the 'Mail on Sunday's' allegations.
A Procedural Point
15. There is one other preliminary point I should
make. As paragraph 84 of the Guide to the Rules for Members makes
clear, I would not normally regard a complaint founded upon no
more than a newspaper story or television report as a substantiated
allegation. I have thought it right to proceed with inquiries
in this case for 3 reasons:
(a) the exchange of letters between Mr Trend
and Mr Cameron indicated that something was amiss, whether as
the result of a misunderstanding or otherwise;
(b) in the circumstances of this case, it would
be difficult, to say the least, for either a Member of the House
or a member of the public to provide evidence additional to that
published by the 'Mail on Sunday'. At the heart of the allegations
are interactions between Mr Trend and that part of the Finance
and Administration Department which administers Members' allowances
(popularly known as the Fees Office), interactions which in normal
circumstances properly remain confidential;
(c) the allegations are serious. It is in the
interests of all concerned—including the House and the public—that
they are seen to be properly investigated.
MY INQUIRIES
Mr Trend's Account of Events
16. Accordingly I wrote to Mr Trend on 6 January
explaining my decision to proceed with inquiries and seeking his
comments on the issues raised by the complaints. A copy of my
letter is at Annex D. Following that letter, Mr Trend came to
see me on 13 January and showed me a preliminary draft of his
reply. I explained the process of inquiry to Mr Trend and encouraged
him to amplify certain points in his draft response. This he did,
sending me on 21 January the letter reproduced at Annex E. That
letter led me to put certain questions to Mr Trend (Annex F),
to which he replied on 27 January (Annex G). I interviewed Mr
Trend (who was accompanied by another Member acting as his friend)
in the presence of my PA, on Monday 3 February. Mr Trend also
came to see me on 5 February (accompanied by his friend) to offer
his comments on the factual sections of this memorandum.
17. Putting together the contents of Mr Trend's
letters of 21 and 27 January and his responses during our discussion
on 3 February, his account of events is as follows. At the time
of his election to Parliament in April 1992, Mr Trend's main residence
was a house he owned in North London. Following his selection
as a candidate in April 1990, he had rented, first a flat and
then a house in Windsor but continued to own the London house.
In April 1994, he bought his present house in Windsor.
18. In 1993 he sold his London house (although
he continued , in error, to pay the ground rent on it for several
years afterwards) and thereafter made his London home with a friend,
where he stayed whenever he wanted. The frequency of his overnight
stays in London has varied. In the 1992 Parliament, (during part
of which he served as a Parliamentary Private Secretary), he stayed
overnight in London frequently; in the next Parliament less often;
and since 2001 rarely, although with the recent change in the
House's sitting hours and the earlier starts this entails, he
expects to need to stay in London more frequently in future.
19. Mr Trend says that he attended a briefing
given by the Department of Finance and Administration for new
Members about allowances and other financial matters shortly after
his arrival in the House in 1992. The Department confirms that
this is likely. In his letter of 27 January he goes on:
"My understanding of ACA following that briefing
was in substance ...that since I was an out-of-London MP with
two places of work, I could claim ACA in respect of accommodation
either in London or in my constituency; that I needed to nominate
one of my addresses as 'home' for the purposes of the allowance,
and that I would then claim ACA in respect of expenses incurred
in the other. I did not understand that I was supposed to assess
whether London or Windsor was my 'main residence' , and that only
my 'main residence' could be designated as 'home' for ACA".
20. When Mr Trend entered the House in 1992,
he nominated his London house as his main home and claimed ACA
in respect of the house he then rented in Windsor. Following his
purchase of a house in Windsor in April 1994, he says:
"For the purposes of ACA, my 'home' continued
to be London, and I claimed the allowance in respect of the Windsor
house".
21. Mr Trend says that between 1992 and 1994
he had several conversations with the Department about ACA and
checked the arrangement he had made with them whenever his circumstances
changed. In particular he remembers clearly the conversation he
had with the office at the time of his move to his present address
in Windsor, in which he pointed out the precise nature of his
circumstances. He continues:
"I was told that my claim for ACA could properly
continue, and indeed the Fees Office advised me that, because
mortgage interest was an expense properly chargeable against the
allowance, I should go for an endowment mortgage rather than a
repayment mortgage.
It was at all times my honest and sincere belief
that my claiming ACA was in accordance with the rules. This belief
was supported by my conversation with the Fees Office".
Mr Trend is certain that he was given the advice
about what type of mortgage he should take out by the Department.
22. I asked Mr Trend whether he had any record
of his conversations with the Department. He replied that they
were all on the telephone and that he had no details either of
dates or of the names of the people he spoke to. He is confident,
however, that when he informed the Department that he was buying
a house in Windsor:
"... there could have been absolutely no
doubt that the Windsor house was going to be my main residence".
23. I also asked Mr Trend how he could understand
that his main home could continue to be in London for the purposes
of ACA, even after he had bought his house in Windsor. Mr Trend
replied:
"This was not my understanding. Had I asked
myself, after I bought the house in Windsor, whether London or
Windsor was my 'main residence', I would certainly have said that
it was Windsor. I did not ask myself that question, because ...I
did not understand that ACA could only properly be claimed in
respect of a property that was not my 'main residence'.
I believed that I could properly continue to designate London
as 'home' for the purposes of ACA, even though, in domestic terms,
Windsor had become my 'main residence'."
24. When the 'Mail on Sunday' published its allegations,
Mr Trend's reaction was that the allegations were wrong: he had
never claimed ACA on his London address. He and Mr Cameron were
in touch immediately and he went to see Mr Cameron to confirm
that his understanding was correct. It was during this conversation
that he first became aware that he had misinterpreted the significance
of identifying his 'main residence' for the purposes of ACA. Prior
to that he had never discussed the definition of his main home
with the Fees Office at any time.
25. Having learned from Mr Cameron that, the
Windsor house having become his 'main residence', he should not
have claimed ACA in respect of it, Mr Trend says that he was dismayed
because he had always believed his conduct was perfectly proper.
He nonetheless accepted what he was told and determined to put
the matter right without delay by repaying 'the whole sum'. That
led to the exchange of letters with Mr Cameron. His outstanding
account—totalling £90,277.00—was repaid in full
on 23 December 2002.
Comments by the Department
26. At the same time as writing to Mr Trend about
the complaints against him, I wrote to Mr Cameron asking for the
Department's account of the nature of the claims made by Mr Trend
under the ACA and in what respect they believed these claims were
invalid. I have also invited the Department's comments on the
explanation of events offered by Mr Trend. The main points to
emerge are as follows.
27. Mr Trend had certified to the Department
as recently as 30 November 2000 that his main residence was in
London and that he wished to claim ACA for his constituency home.
(A blank copy of the form of certificate completed by Mr Trend
is at Annex H). However, Mr Trend had explained during his conversation
with Mr Cameron on 16 December 2002 that his family home was in
Windsor and that this had been the case since 1993 when he had
sold his London house. Mr Trend stayed overnight in London from
time to time but had only to meet limited expenses when doing
so. His claim for ACA contravened the rules not because he was
claiming on a property in London (as the 'Mail on Sunday' incorrectly
assumed) but because it was made in respect of his main home in
Windsor.
28. The Department does not have records going
back before April 1996. £90,277.00 is the total amount of
ACA claimed by Mr Trend between April 1996 and November 2002.
The Department is unable to assess accurately how much ACA was
claimed by Mr Trend between 1993 (when he sold his London house)
and April 1996. Nonetheless the amount of ACA claimed erroneously
by Mr Trend is likely to be more than the amount he has repaid.
However, no allowance has been made in either period for any expenditure
Mr Trend might have been able to claim had he correctly identified
Windsor as his main residence
29. Since the Department does not keep records
back to 1992, it has no record of any of the conversations which
Mr Trend says took place with its staff about ACA. In particular,
there is no record now available of the conversation, describing
his precise circumstances, about the move to his present address
in Windsor, when Mr Trend says that he was told he could continue
to claim ACA as before. Mr Cameron has commented to me on this
point:
"If such advice had been given it would have
run directly counter to the written rules. If I had been aware
that a member of staff had given such advice I would have considered
disciplinary action. I expect my predecessors [Mr Cameron was
appointed to his present position in November 1998] would have
done the same".
30. The Department also has no evidence either
to support or to contradict Mr Trend's assertion that he was advised
to take out an endowment rather than a repayment mortgage. Mr
Cameron has pointed out that no member of staff of his department
is qualified, or ever has been, to provide financial advice of
this or any other kind, and that "staff at all levels
are aware of this restriction". However, Mr Trend has
made clear to me in conversation that he never intended to imply
that he had received financial advice in this sense from the Department's
staff. What they did do, in an attempt to be helpful, was advise
Mr Trend on what would be reclaimable under the allowance. Mr
Cameron accepts that a conversation of that nature and about what
might have been most convenient for the Member, would not have
been inappropriate and could have happened.
31. On Mr Trend's assertion that he was not aware
that he could only claim ACA for accommodation away from his main
home, Mr Cameron has commented in a letter to me of 29 January:
"I find this surprising. I attach a copy
of the ACA claim form used in 1992, which clearly directs Members
to satisfy themselves that their claim fell within the terms of
the relevant Resolution of the House"
to which I have referred in paragraph 7 above. The
Resolution was reproduced on the front of the book of claim forms
sent to Members. That particular form ceased to be used in the
mid 1990s. Nonetheless Members continued to be asked which address
they wished to nominate for the purposes of ACA and on 30 November
2000, Mr Trend signed a form which certified that his main residence
was in London and that he intended to claim ACA in the constituency.
Comments by Mr Trend
32. When Mr Trend came to see me on 5 February
to offer his comments on the factual sections of this memorandum,
he told me that:
(a) he felt there was an ambiguity in the way
in which the terms 'home' and 'main residence' have been used
over the years in relation to the Additional Costs Allowance;
(b) he did not recall ever having been briefed
about the implications of the House's Resolution of 1971 which
had introduced the allowance;
(c) although the Green Book says that a Member
must provide supporting evidence for major items of anticipated
or actual expenditure under the ACA, he had never been asked to
supply such evidence. If he had been asked for it the problem
might in his view have been rectified sooner;
(d) his understanding of the certificate which
he signed on 30 November 2000 nominating his friend's London home
as his (Mr Trend's) 'main residence' was consistent with his understanding
at that time of the elective nature of the allowance arrangement.
It was not until he had seen Mr Cameron on 16 December 2002 that
he had understood the proper significance of the certificate.
FINDINGS OF FACT
33. There is no dispute about the main facts
of this case. On his election to the House in 1992, Mr Trend nominated
his London home as his main residence for the purpose of ACA and
claimed ACA in respect of his accommodation in his Windsor constituency.
He acted properly at this point. However, he sold his London house
in 1993 and in 1994 bought his present home in Windsor. Nonetheless
he continued to certify that his main home was in London and to
claim ACA in respect of his accommodation in Windsor.
34. In acting in this way Mr Trend did not observe
the rules concerning payment of ACA. Mr Trend has acknowledged
this in his letter of 19 December to Mr Cameron, in his letter
of 21 January to me, and during my subsequent conversation with
him. He asserts that this happened because he misunderstood the
nature of the rules. Crucially, he believed that he could nominate
either his London or his Windsor address as his
home for the purposes of ACA and that it did not matter which
of these in practice was his main residence. He did not understand
that ACA could only properly be claimed in respect of a property
that was not his 'main residence'. As Mr Trend explained
the position to me during a telephone conversation subsequent
to our meeting on 3 February:
"I was never asked what my 'main residence'
was in terms of my family life. If I had been, that would have
alerted me to the issue. I much more viewed the matter as there
being an option as to which home I nominated. That is how it was
generally understood".
35. When, following publication of the 'Mail
on Sunday's' allegations, he saw Mr Cameron who pointed out the
correct position to him, Mr Trend apologised and has since repaid
in full the sum specified by the Department (totalling £90,277.00).
In his letter to me of 21 January Mr Trend summed up the position:
"My mistaken understanding of the effect
of the rules concerning ACA was a belief honestly and genuinely
held. However, I deeply regret having found myself in this position
and have sincerely apologised for it".
36. There is one other factual point on which
I touch for the sake of completeness. In an e-mail to me of 8
January, Mr Cochrane, the principal complainant in this case,
suggested that, as Mr Trend had initially told the 'Mail on Sunday'
that he had a London home but had subsequently admitted claiming
ACA erroneously and having sold his London house some 9 years
ago, Mr Trend had lied when challenged by the newspaper in order
to cover up his actions. Given that Mr Trend had never claimed
ACA on any 'home' he had in London and understood the house he
stayed in when in London to be his London 'home', I do not think
that it can be said that Mr Trend lied as Mr Cochrane alleges.
It should also be recorded that Mr Trend did not attempt to disguise
his position during the critical conversation with Mr Cameron
on 16 December 2002 in which the precise nature of his error in
claiming ACA was revealed.
CONCLUSION
37. The allegations in this case are serious.
A substantial sum of public money is involved. The Member's reputation
for honesty is at stake. Something more than applying the civil
law test of the balance of probabilities is, in my view, appropriate
when assessing the evidence. The Committee has previously taken
a similar view in other cases (see, for example, paragraphs 16-20
of the Second Report for Session 2000-01, HC 89[5]).
In particular, when considering the issue of possible dishonesty,
the proof required should be one of a high degree of probability.
Indeed the criminal law itself may be relevant (see paragraphs
45-46 below).
38. Mr Trend is obliged by the Code of Conduct
approved by the House not to make improper use of any payment
or allowance he receives as a Member for public purposes, and
strictly to observe the administrative rules which apply to such
payments and allowances. The evidence is clear that Mr Trend has
failed to observe those rules in respect of the Additional Costs
Allowance. His failure has not arisen because he was wrongly claiming
on his London home whilst travelling back to his Windsor constituency,
as Mr Cochrane and others who have complained to me following
the article in the 'Mail on Sunday' on 15 December have alleged.
Rather it has arisen because, having initially claimed ACA properly
on his home in Windsor during the time when his main home was
in London, he continued to certify that his main residence was
in London long after he and his family had moved to Windsor and
he had sold his London house, wrongly continuing to claim the
allowance on his home in Windsor.
39. Mr Trend says that this happened because
of a genuine misunderstanding. He did not understand that he was
supposed to assess whether London or Windsor was his main residence.
He did not understand that he could only claim the allowance on
the home which was not his main residence. He believed
that he had the option of nominating either Windsor or London
as his main home, regardless of which of these was in practice
his main residence. He says that his understanding was supported
by several conversations he had with the Finance and Administration
Department between 1992 and 1994, when he was in the process of
selling his London home and buying a house in Windsor, and that
in those conversations he did not disguise his true circumstances
from the Department.
40. From the point of view of establishing the
truth or otherwise of Mr Trend's account of events, it is unfortunate
that the Department does not currently possess records on any
Member's allowance claims prior to April 1996. Nor can Mr Trend
produce any documentary evidence of his conversations with the
Department. In the absence of such firm evidence, it is difficult
either to substantiate or to disprove Mr Trend's account of events.
41. There is, however, clear evidence that as
recently as 30 November 2000, Mr Trend certified that his main
residence was in London. Mr Trend says that he did not understand
the significance of the certificate. However, it is difficult
to understand how he felt able to sign a certificate giving the
home of his friend in London as his main residence when, on his
own admission, he stayed there only occasionally. It is also difficult
to square Mr Trend's understanding of the nature of the Additional
Costs Allowance with the purpose of that allowance as set out
in the House's Resolution of 1971, or with the guidance about
it in successive editions of the Green Book.
42. Some may be tempted to draw the conclusion
from this that Mr Trend deliberately set out to abuse the allowance.
I do not think that the evidence available is sufficient to substantiate
that charge. However, it is certainly sufficient to justify the
view that Mr Trend was, at the least, careless or negligent in
relation to the claims he made. And it is clear that in failing
to observe the rules which apply to the allowance, and thereby
misusing it, he breached the Code of Conduct.
43. I conclude that, whilst the complaints as
put to me by Mr Cochrane and others were strictly incorrect and
can not be upheld in the terms in which they were made, Mr Trend
had claimed ACA in breach of the rules relating to that allowance.
Under the system relating to Members allowances, he took personal
responsibility for the accuracy and appropriateness of his claims
on each occasion he made them. In weighing the consequences of
his breach of the rules, the Committee will no doubt wish to have
regard both to the seriousness of this matter (a seriousness that
is compounded by the fact that the present system for paying MPs
allowances rests on continued confidence that Members have certified
their claims correctly), and to Mr Trend's decision to contact
Mr Cameron immediately the 'Mail on Sunday' article appeared,
his honest admission of his position during his conversation with
Mr Cameron on 16 December 2002, his ready apology and his prompt
repayment of the sum he was told he owed the Department.
POST SCRIPT
44. There are two further matters arising from
the complaints I received on which I think it appropriate to comment:
(1) the possible relevance to this case of the
law on obtaining by deception;
(2) the adequacy of the controls applied by
the Department of Finance and Administration.
The Criminal Law
45. I mentioned earlier (see paragraph 14) that
a number of those who wrote to me following the Mail on Sunday's
allegations suggested that Mr Trend might have committed a criminal
offence in effectively defrauding the public purse and that he
should be prosecuted for this. They pointed out that others who
were found by their employer wrongly to have claimed expenses
or allowances might well have been prosecuted for this. They argued
that there should not be one standard for MPs and another for
other citizens in this respect.
46. The decision whether Mr Trend or any other
Member who may be shown to have wrongly claimed parliamentary
allowances should face a criminal prosecution is one for the police
and the prosecuting authorities, not for me. As the briefing note
on the law on obtaining by deception at Annex C makes clear, there
are a number of ingredients to the offence which would have to
be proved if a prosecution were to succeed; achieving this would
not necessarily be easy. However, the point that needs to be made
here is that claiming an allowance is not a proceeding in Parliament
and the provisions of parliamentary privilege do not apply. Members
of Parliament are no less subject to the criminal law in this
respect than anyone else. They must have its provisions in mind
at all times like anyone else, and decisions about whether it
should be invoked against them must be taken applying the same
tests as would be applied to any other citizen.
The Adequacy of Controls Applied by the Department
of Finance & Administration
47. This case inevitably raises questions about
the adequacy of the checks applied by the Finance and Administration
Department to claims by Members in respect of the ACA. Some of
those who wrote to me following the allegations against Mr Trend
suggested that I should investigate all the claims made by Members
in respect of the Additional Costs Allowance. Others have suggested
that I should examine in detail the adequacy of the financial
controls applied by the Department.
48. It is not within my remit (or resources)
to mount an audit of all Members' claims, nor is it part of my
expertise to advise the Department in detail on its financial
control or audit arrangements. These arrangements are regularly
the subject of discussion between the Department and the National
Audit Office. Nonetheless the public requires assurance that the
tax payers' money which is rightly being set aside to enable Members
to discharge their demanding role is being properly expended,
and the Code of Conduct specifically refers to the improper use
of such allowances made to Members.
49. The Department's records relating to Mr Trend's
claims for ACA go back to the financial year 1996-97. In keeping
with their current policy on records retention, they have destroyed
earlier records. It is not therefore clear what, if any, documentary
evidence Mr Trend submitted between 1992 and early 1996 in support
of his claim for ACA, although in conversation with me he said
that whilst he believed he had properly met the Department's requirements,
he did not recall having submitted any.
50. The evidence on the file in support of the
ACA claims consists of monthly signed statements of amounts of
expenditure incurred on Mr Trend's Windsor residence, and a form
completed and signed by Mr Trend in November 2000 stating that
the address where he stayed in London was his main home. There
is no evidence on the file that Mr Trend was asked to provide
additional information to support his claim, nor does he recall
ever having been challenged to provide any. However, even had
he produced such evidence, it would not have exposed the fundamental
flaw that his main residence was in Windsor not in London.
51. The onus for ensuring that his claims were
correct—and in particular related to a property which was
not his main home—was on Mr Trend, not on the Department.
According to Mr Cameron, the Department relies on Members disclosing
the full facts of their own circumstances in establishing their
eligibility to claim ACA. Any changes in those circumstances must
be reported to the Department as they arise. In the case of Mr
Trend, the Department had received as recently as November 2000
a certificate from him that the house where he occasionally stayed
in London was his main home. In a letter to me of 29 January,
Mr Cameron comments on this point:
"Whether a particular property is the main
home is generally a matter of fact and we had no reason to suppose
that he was not spending significant amounts of time [in London].
The information we received about the Windsor home is not in dispute,
and further documentary evidence would not have uncovered the
initial erroneous claim."
52. I asked Mr Cameron what steps his Department
had taken or intended to take to remedy any errors in claims under
the ACA and to try to ensure that errors are avoided in future.
Mr Cameron responded:
"I have already initiated a programme to
review Members' ACA claims to consider any apparent inconsistencies
or gaps in the information we hold that could suggest errors or
misunderstanding of rules, and the need for follow up action.
We are also clarifying the rules in the new version of the Green
Book due shortly ...
We already have in hand a redesign of the ACA
claim form. The main changes will be:
- to include a clear statement of the rules
governing ACA, including a description of what is the main home
for this purpose;
- to include the address of the home (purchased
or rented) for which ACA is claimed;
- a strengthening of the certification of the
claim form to align it with that required for the Incidental Expenses
Provision and travel claims;
- a specific monetary threshold above which
receipts will be required to support expenses claimed;
- specific expenses which will not be admissible
as claims against this allowance.
These changes will require to be approved by the
Speaker".
53. This action is welcome and may help prevent
wrongful claims arising in future. However it is for consideration
whether the system for ensuring the accuracy of claims for allowances
by Members does not need to be strengthened further to ensure
(a) the more active provision of advice to Members and their staff
so as to try to help them ensure they are making correct claims;
(b) routine provision by Members of sufficient corroborative information
to support their claims; and (c) effective auditing of claims,
not by imposing more bureaucratic regulation on Members in the
form of demands for more and more documentation the benefit of
which may be at best marginal, but through active and thorough
"health checks" on Members' use of expenses.
54. These are matters which are for the Speaker's
Advisory Panel on Members' Allowances to take forward in the first
instance. They would need to consider issues such as the extent
to which the arrangements would be voluntary and how far accountability
should pass from Members to the House authorities. Whatever the
precise solutions adopted, at the end of the day, the House must
be able to show that the requirements for auditing which it imposes
on itself are no less effective than those it would expect of
others responsible for the expenditure of public money.
10 February 2003 Sir Philip Mawer
4 A list of the names of those who complained in addition
to Mr Cochrane is at Annex B. Back
5
Second Report: Complaint against Mr John Maxton and Dr John
Reid, Session 2000-01 (HC 89). Back
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