Statement for Media Briefing: 11 March 2008
I am pleased to have this opportunity to present the findings and recommendations of the Independent Review Panel set up to examine the allowances currently available to members of the Scottish Parliament.
I reported to the Scottish Parliamentary Corporate Body, who commissioned this report, earlier today and it is now for the SPCB to consider the report in detail and take action as it sees fit. I hope that the report will assist them in their aim of encouraging greater public confidence in the system of expenses operating here at Holyrood.
The report comes in two parts. This document (the main report) which has now been circulated to you and background papers including the minutes of the panel’s discussions which can be accessed via the web address shown at the bottom of page 3 of the main report.
My intention is to outline the main tenets of the report at this media briefing, to answer your questions as fully as possible, and to undertake any short interviews requested for this afternoon and then to leave it to the SPCB and the Parliament itself to take this matter forward. I think the Panel has completed its job and I am grateful to its members – Alastair MacNish, Isobel Sharp, Lord Selkirk of Douglas and Tom McCabe – for all their help and support in recent months.
Before taking you through some (but I assure you not all) of the recommendations I have 3 key points that I want to make:
The term ‘allowances’ really means ‘re-imbursement of expenses’. This is not money which augments MSPs’ salaries, but is expenditure necessarily incurred by MSPs to do the job that the people of Scotland expect of them. MSPs should not be expected to meet these costs personally, but the expenses scheme must ensure that Members are accountable and it must be transparent. This will, I hope, encourage public confidence.
To meet their responsibilities to their constituents and their commitments to the Parliament, most MSPs need to employ staff, they need to run an office in their constituency or region, travel on parliamentary business and communicate effectively with their constituents. These are essential ingredients of our democracy. The geography of Scotland means that some members also need overnight accommodation in Edinburgh when Parliament is sitting.
There are some real strengths in the Scottish system of parliamentary expenses:
It is transparent and achieves high standards of accountability
It is based on the principle that all expenses incurred for accommodation, goods and services have to be supported by receipts or vouchers confirming the expenditure
It is cost effective when compared with other UK legislatures
These strengths are consolidated in our report and they provided the panel with good foundations to build on. They are also consistent with our main recommendation, set out in more detail in Chapter 3 of the report, that the new system should reflect the ‘Seven Principles in Public Life’ – objectivity, accountability, openness, integrity, selflessness, honesty and leadership. These principles as they apply to the re-imbursement of expenses are interpreted in Chapter 3 of the report and by adopting a ‘first principles’ approach, we wish to ensure the MSPs understand the spirit in which our recommendations are made.
The report makes 68 recommendations in total and proposes a streamlined system across six headings – accommodation, staffing, office costs, travel, a party leaders’ provision and provision for winding up.
On accommodation:
The panel’s key recommendation is to abolish the current provision to meet mortgage interest payments on Edinburgh accommodation, phasing out the existing arrangements by the end of this Parliament. There are also recommendations for modest increases in the Edinburgh and London overnight accommodation rates and reasonable provision for leasing property in Edinburgh for those who qualify for it. The decision to recommend the abolition of mortage interest payments was pretty finely balanced but we take the view that a scheme which assists Members to purchase a property which could result in a substantial profit (and in a personal gain) at the point of sale fails the test of ‘selflessness’ of the Nolan principles.
On staffing , we recommend that -
the maximum staff salary provision available for constituency members should be set at £62,000 and for regional members £45,000 – this compares with the equivalent figure of £85,000 at Westminster and £64,000 in Wales. All of these figures are net of national Insurance. We also recommend new pay scales for MSPs’ staff to enable progression based on experience, responsibilities and contribution. Assimilation to the new pay scales we think has to be tightly controlled to avoid an unnecessary surge in expenditure and we rule out the payment of staff bonuses. Modest provision will be made centrally – we suggest – for staff training, maternity leave and childcare vouchers and redundancy payments in future will have to be cleared by SPCB. We also recommend a register for members who employ or wish to employ close family members (a term which we try to define in para 4.40 by drawing on the accounting standard for related party transactions: we have also noted, rather late in the day as we were putting our report to bed, the consultation document published by the House of Commons on 28 February). All staff salary costs should be administered through the SPCB payroll services so that no money changes hands and expenditure can be accurately identified against each individual member. In the case of family members (as indeed with all other staff) the SPCB will have to take full account of data protection issues in determining what can reasonably be published.
Our recommendations in relation to staffing will lead to additional expenditure if they are adopted – potentially about £1m p.a. or £1.25m if we include employer contribution costs. As I said earlier assimilation to the new pay scales needs to be tightly controlled and, in any case, the pace of these changes will have to be carefully judged by the SPCB in light of their own budget constraints, public spending constraints and other calls on their resources.
On office costs, we have recommended a simplified system, providing separate provision for local office costs to a maximum of £15,000 p.a. and surgery advertising to a maximum of £1500 p.a. These figures are very close to the existing provision. On this latter point of surgery advertising, we ruled out the notion of a more generous ‘communications allowance’ recently introduced in the House of Commons. We have also ruled out any entitlement to claim for an office at home and the possibility of leasing an office from a family member or business associate. We have recommended strict guidelines, based on SPCB oversight of an independent valuation, when a member proposes to lease an office from a party political organisation. Transparency is also required in reverse if you like – when part of an office is sublet to a party political organisation with clear rules on how to deal with the proper separation of activity and income generated under such arrangements.
On travel, we recommend a single mechanism for reimbursement of all forms of travel expenses relating to parliamentary duties and constituency responsibilities. The current mileage rate of 49.3p should be reduced to 40p in line with the rates set by HM Revenue and Customs, overseas journeys (with the exception of Brussels and Strasbourg) should be cleared by SPCB and family travel should not be funded from the public purse.
We were unable to make any firm recommendations on provision for party leaders, partly because we believe that this needs to take account of the payment of ‘Short Money’ – that is the financial assistance provided to non-executive parties to support them in holding the Government to account. ‘Short money’ falls outside the remit of our group.
So that said, we believe that the party leaders and the non-executive parties need to be properly supported if the Parliament is to continue working effectively. We have therefore recommended that the SPCB should work with the party leaders to find a sensible way forward on this matter.
Finally, we recommend that reasonable provision needs to be made for winding up – these are costs associated with when an MSP, for whatever reason, ceases to be a member of the Parliament. This should include a central pot for staff redundancy costs – albeit tightly regulated by SPCB – and a sum up to £5,000 to cover the costs of closing down an office – all expenditure in line with everything else we are saying is to be supported by invoices and receipts with proper transparency and accountability.
So as I said at the beginning, the Independent Review Panel has worked to consolidate the strengths of the existing system in Scotland and to articulate clear principles which we believe the SPCB should use when considering our recommendations and developing detailed guidelines and rules for the re-imbursement of expenses. We have made recommendations we believe which, if followed through, will simplify and streamline the existing arrangements. Above all, we hope that our report will assist the SPCB in achieving its aim of encouraging greater public confidence in the system of expenses operating in the Scottish Parliament.
We believe what we are recommending is fair and that accountability is important and that transparency is important.
The Panel has done its job – it is now for the SPCB who received the report this morning and, ultimately, the Parliament to follow these issues through to a proper conclusion.
Thank you for your attention and I am happy to take questions on our report.
Alan Langlands
11 March 2008