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MPs' Scheme of Business Costs & Expenses

The MPs’ Scheme of Business Costs and Expenses (‘the Scheme’) is intended to ensure that MPs are reimbursed for costs necessarily incurred in the performance of their parliamentary functions. It sets out a series of fundamental principles and rules within which MPs must operate, while still allowing them appropriate discretion over making claims.

IPSA reviews the Scheme regularly to ensure the budgets and rules are fair and workable for MPs, their staff, and the public. The Sixth Edition of the Scheme came into effect on 1 April 2014 for the 2014-15 financial year. The Fifth Edition of the Scheme is effective only for claims relating to the 2013-14 financial year.

We have a statutory responsibility to regulate and administer a transparent scheme of business costs and expenses for MPs. Our reviews of the Scheme help ensure that public funds are properly spent and accounted for and that MPs have the support they need to perform their parliamentary functions. As part of each review, we run a consultation seeking the views of the public, MPs and other interested parties about any possible amendments.

For the latest edition of the Scheme, based on the responses we received, as well as the evidence gathered, we considered that only minor adjustments were necessary. IPSA has also reviewed the budget limits to ensure these remain appropriate. IPSA has amended the rules and guidance to help clarify the terms on which MPs engage volunteers. We will update the Model Volunteer Arrangement and further guidance can also be found on the Department for Business, Innovation & Skills (BIS) website: https://www.gov.uk/national-minimum-wage-work-experience-and-internships.

 
Foreword by the Chair of IPSA

This is the latest review of the MPs’ Scheme of Business Costs and Expenses, fulfilling our requirement to review the Scheme regularly.  This year’s review reflects our continuing commitment to introduce improvements into the Scheme, but also the fact that the Scheme is now settled, working well and meeting our values of fairness and transparency. Consequently, the review is limited in scope this year, but still makes important refinements to the rules and the budgets.

This review pays special attention to MPs’ needs for support with their accommodation costs. For those MPs whose constituencies are more than 20 miles from London, working in two locations – their constituency and Westminster – brings with it a need for a base in those two places. We continue to believe that it is right for the taxpayer to support MPs who need overnight accommodation when performing their parliamentary functions. We looked in particular in this review at the level of that support for MPs who rent a flat in London to meet those overnight accommodation needs. Chapter One of our report sets out our conclusions.

We think, however, that how MPs’ needs for work-related accommodation are met is a large issue and one that requires fresh thinking. In April 2013 we will begin an in-depth review of the rules in this area, in order to ensure that we have in place a sustainable, fair, workable and transparent system for meeting MPs’ needs for accommodation. We will consult on this issue in the autumn, giving MPs and the public an opportunity to contribute.

This review has been greatly assisted by the responses that we received. We believe that we have in place a Scheme that is fair, workable and transparent and we commend the review and the new edition of the Scheme to MPs and This review of the MPs’ Scheme of Business Costs and Expenses (‘the Scheme’) fulfils our legal requirement to review the Scheme regularly. We have a continuing commitment to ensure the Scheme is fair, transparent and workable.

The Scheme rules are now widely understood and observed. The primary aim of this year’s review was not to make major changes – they are not needed – but to refine the Scheme rules to ensure they remain appropriate. We have been mindful of the need to control costs, while conscious of our obligation to provide MPs with the support they require to carry out their parliamentary functions. This year’s review was also the main opportunity to ensure that the rules are fit for purpose in the lead-up to the General Election. We do not plan to conduct another comprehensive review prior to May 2015.

The main areas covered in this year’s review included MPs’ engagement of volunteers; expenditure in the lead-up to the General Election; and the rules for MPs winding up their affairs when they leave Parliament. We have also considered the budget limits to ensure these remain at an appropriate level. As part of this review, we took into consideration all of the responses we received to the consultation and we are grateful to all those who took the time to share their views.

The review has resulted in the Sixth Edition of the Scheme, which will come into effect from 1 April 2014 for the 2014-15 financial year.
Professor Sir Ian Kennedy (Chair), Sir Neil Butterfield, Elizabeth Padmore, Anne Whitaker, Professor Tony Wright.

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Summary of the Changes

Below is a summary of the key changes made to the MPs’ Scheme of Business Costs and Expenses (“the Scheme”), following this review and public consultation. Please refer to the Scheme for full details of all the rules and guidance. All changes come into effect on 1 April 2014.

Staffing Expenditure
• Where an MP expects his or her Office Costs Expenditure budget to be exhausted, he or she may claim employment practice liability insurance and staff training costs from Staffing Expenditure.
• For the avoidance of doubt, references to ‘unpaid intern’ have been removed from the Scheme and replaced by ‘volunteer’. There is continued recognition of ‘employed interns’ who are workers and must be paid at least the National Minimum Wage. The Model Volunteer Arrangement has also been amended to clarify its scope and purpose.
• The Staffing Expenditure budgets have been increased by 1% to £145,500 for London Area MPs and £138,600 for non-London Area MPs, to reflect the wider public sector pay policy.
• We have changed the rules to make clear that we will not accept any claims or requests for payments where these would take an MP over the Staffing Expenditure budget within the year.
• In future, where MPs’ staff members choose to opt out of the Portcullis Pension Plan, we will only make contributions to a different plan where we already have an arrangement for payments to that plan.

Office Costs Expenditure (OCE)
• MPs will be allowed to use their IPSA-funded websites to make a statement about the Scottish Independence Referendum if they wish to do so.
• The Office Costs Expenditure budgets have been increased by 2% to £25,900 for London Area MPs and £23,250 for non-London Area MPs to reflect consumer price inflation.

Winding-Up Expenditure, Miscellaneous Expenditure and other matters
• In the event of a recall of Parliament, MPs will be expected to travel standard class or equivalent unless they have no alternative or there is a more cost-effective option available.
• We have clarified the general conditions of the Scheme to prohibit claims for any activities which could be construed as campaign expenditure or election expenses under the relevant legislation.
• MPs who are standing down at the General Election may claim for two return journeys between the MP’s residence or constituency and Westminster during dissolution to wind up their affairs.
• In the event of an early General Election, claims for the purchase of capital items will not be allowed from the date of dissolution of Parliament.
• Guidance has been added for MPs leaving Parliament regarding arrangements to dispose of their office equipment and furniture.

Accommodation Expenditure
• The Accommodation Expenditure budgets for MPs claiming for rental payments in the London Area or within their constituency have been increased by 2.5% to reflect inflation.

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