Conclusions and recommendations
1. The new system for paying MPs' expenses
is robust and has improved public confidence, but there is significant
scope to improve its cost effectiveness.
IPSA is committed to reducing its operating budget by 5% each
year during the course of this Parliament. It is striking, however,
that 38% of claims submitted are for less money than the average
cost of processing the claims. IPSA should reduce this percentage
substantially, and set performance targets, such as average cost
per claim, by which its value for money can be judged. IPSA should
report progress publicly.
2. Public confidence in the system for MPs'
expenses has markedly improved, but further simple steps by IPSA
could help to build on these gains. The
level of interest in MPs' claims has reduced, from over 10,000
unique hits on the IPSA website in response to expenses data published
in December 2010, to fewer than 100 following the publication
of data in July 2011. This, along with the results of an NAO survey
which showed that 55% of the public felt the situation regarding
MPs' expenses had got better in the last year, is welcome evidence
of improved public confidence. To improve public confidence further,
IPSA should draw a distinction between salaries and expenses in
its public communications and make clear that all expenses claims
paid are within the rules, and that rejected claims, unless otherwise
stated, are the result of administrative errors rather than deliberate
misbehaviour.
3. IPSA's validation processes are disproportionate,
in particular on low-value and low-risk claims. The
level of error that IPSA detects through its validation is extremely
low and currently its approach does not distinguish enough between
high-risk areas of expenditure and those where the risk of error
or abuse is inherently low. IPSA should develop a more risk-based
approach to validation, tailored to the size and nature of the
different claims it receives.
4. Eighty-five per cent of MPs say that dealing
with expenses hinders them from performing their duties in Parliament
and to their constituents. The combined
amount of time spent by MPs and their staff dealing with expenses
could cost in the region of £2.4 million a year. While it
is inevitable that MPs will need to spend some time dealing with
expenses if the system is to be robust, this is too much. IPSA
acknowledged that currently the balance is not right and set out
a number of initiatives to reduce it. IPSA should monitor the
time MPs and their staff spend dealing with expenses in future,
using the data in the NAO survey as a benchmark. It should set
out clearly the steps it will take, and by when, to reduce the
time it takes to make claims in future.
5. Guidance for MPs and their staff on making
claims is not sufficiently clear and accessible and they do not
always receive consistent advice from IPSA staff.
IPSA acknowledged that it would be more helpful if MPs could access
guidance on making claims from within the expenses system itself
and if all guidance was consolidated in one place and easily searchable.
When MPs or their offices talk to IPSA staff, they often have
to repeat information they have provided before about their circumstances,
as IPSA systems do not retain it. IPSA should undertake a cost-benefit
analysis to evaluate whether an account management model would
be a more efficient way of organising contacts between MPs and
IPSA staff in the future, factoring into its analysis the current
burden on MPs and their staff.
6. The expenses system is still relatively
new and there is much scope for future improvement as it develops.
IPSA made a number of commitments, including
carrying out a review of the sufficiency and appropriateness of
MPs' staffing arrangements, reviewing the resourcing of the Compliance
Officer function, considering options for taking advantage of
bulk-purchasing arrangements and improving the payment card reconciliation
process. In developing these improvements, IPSA should engage
with Parliamentary committees and other informal groups that have
been set up to consider expenses-related issues, and this Committee
looks forward to seeing the results.
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