Is the Independent Financial Review Panel right to interfere with political process as well as pay?

The three-person Independent Financial Review Panel was established in July 2011. It sets the pay, allowances and pensions of members and office holders of the NI Assembly. A series of consultation papers has steered the panel’s policies on topics including MLAs’ Pension Scheme, Employment of MLAs’ Staff, Prior disclosure of Interests and MLAs’ Salaries and Office Holders Allowances.

Elements of the panel’s final consultation in this series are proving particularly newsworthy as they examine travel allowances, expenses around office costs and childcare.

The report contains many sensible suggestions and proposals, but at times it over-reaches and moves beyond setting allowances and steps into setting minimum standards for serving constituents.

There is no need for consultation documents to be bland and boring. They should offer challenge and push boundaries.

But I fear that the IFRP have damaged their reputation (and overshadowed the good aspects of their report) by including a number of proposals that interfere with the process of constituency work. If such proposals were necessary, then couching them in a set of escalating options would have diminished the alarm they have caused.

Northern Ireland needs deserves better politics and, in some cases, deserves better politicians. But should financial levers be used to manipulate improvements? Or should financial levers be restricted to maintaining a cost-effective, legal, transparent and accountable system of MLA payments?

The rest of this post examines some of the proposals contained in the report. [Word document] The deadline for responses to the consultation is 5pm on Friday 11 September.

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Office Costs Expenditure can be claimed back to obtain research, secretarial and administrative support for their work in the NI Assembly and in their constituencies. Across a mandate “the Assembly spends over £35m on Members’ allowances” and the panel feel that “issues of value for money and probity in the area of public expenditure are important matters”.

The panel detect “a lack of consistency among Members in the use of public funds on issues ranging from staff salaries to rentals for constituency offices”. They go on to suggest:

… a small number of Members appear to interpret the rules [on the use of expenses] in the most liberal way possible to justify claims for expenditure.

There is also the suggestion that differences in interpretation of the rules between the panel and Assembly Commission staff who administer the scheme have resulted in the panel not being consulted before payments have been authorised and paid.

Constituency Offices

The panel recognises that MLAs often share buildings with MEPs, MPs, other MLAs and councillors (some of whom are employed by MLAs). The panel propose to limit annual rental claims to £8000, with reductions to take into account sharing, ownership by family or parties or connected businesses etc.

  • £8000 maximum for Single MLA;
  • £6000 maximum for Two MLAs sharing premises;
  • £4000 maximum for MLA and Councillor sharing premises;
  • £4000 maximum for MLA and MP sharing premises;
  • £4000 maximum for MLA in premises owned by associated or connected party;
  • £2000 flat rate if their office is based at their home address.

Given the varying office rental market across Northern Ireland and the panel’s per-constituency approach on travel claims (see below), I’m puzzled why they haven’t varied limits across the constituencies. Ground-level South Belfast rental is not cheap.

The panel say that they have “not been able to identify a clear rationale” for the practice of some MLAs renting more than one office in their constituency and the panel proposes that rental expenses will only be able to be claimed for a single constituency office. [Ed – Basil McCrea might be able to explain why he used to rent offices across Lagan Valley?]

Is it sufficient to offer regular surgeries in different locations around a constituency, or is it necessary to rent premises that are staffed to allow people to drop in at a wider range of times?

Given that constituency offices are funded to provide a service to the public, the panel question whether simple 9am-5pm open hours are sufficiently accessible to constituents. The panel seek feedback as they are “considering” extra conditions to be met before rental will be paid:

  • office open 30 hours per week (excluding public holidays);
  • office open 1+ evening per month from 5pm-8pm;
  • office open one Saturday or Sunday per month for at least 4 hours;
  • all phone numbers for which the reimbursement of charges are sought should be published as contact details on the NI Assembly website.

Politics is competitive by the very nature of regular elections and multi-representative constituencies. Poor service by one MLA (or one party) should lead to good reports of better service by other MLAs in the area. I’ve heard many anecdotes of good response to issues raised by constituents translating into votes from the constituent and their family circle.

The panel “draws attention to the requirement that constituency offices are funded … to support Members in meeting constituents and serving their needs and are not for party political activities”. The panel seems upset at claims made that parties provide advice centres as opposed to the Assembly Commission funding offices that parties use to advise the public.

NI Assembly logoThis distinction appears pernickety and leads to the bonkers suggestion that the branding outside constituency offices should adopt the NI Assembly flax logo and ban party and political emblems along with flags and memorials. The panel’s justification is that this would contribute towards “all constituency offices [being] welcoming to all sections of the community”.

The panel are over-reaching if they believe that this proposal will receive the support of any parties and their political supporters.

Political party logos are not banned from ballot papers. Logos are vetted by the Electoral Commission to avoid offence. Taking party logos off the front of offices will reduce public awareness of constituency offices – have the panel commissioned any research to compare public awareness of the Flax logo with party logos? – and make them harder to find when you’re searching a street for them.

Constituency reports

The panel see value in “the production of one annual Constituency Report” to engage with and inform constituents “on issues that have been addressed as part of a Member’s work representing them”.

However the panel does not consider that producing a paper publication and distributing that widely to homes throughout the constituency offers value for money and as such should not be funded by [Constituency office Expenses]. The Panel favours the use of electronic media.

Firstly, a good elected representative might want to consider whether connecting with constituents once a year is often enough. Secondly, the IFRP might want to justify their proposal with some research on how aware constituents are of the NI Assembly website (the panel’s proposed dusty shelf for these electronic reports). Given the political detachment of many constituents, poor turnout figures and distrust of politicians, pushing paper through the door surely delivers democratic benefit .. unlike hoping that constituents will – of their own volition – seek out a report to read online.

Mileage claims

As an employee I cannot claim travel expenses to get to work. That’s my responsibility to fund this travel from my salary. However, if I have to travel to a third party’s address, then that’s a valid travel expense.

The HMRC see travel between an MLA’s home and their constituency office as “a benefit in kind” and it’s subject to tax; whereas their mileage claims between constituency and Parliament Buildings are non-taxable.

The panel suggest that “a small number of Members [are] claiming up to almost £12000 per annum in home to [constituency] office travel expenses”. If they made that journey 5 days a week, 50 weeks of the year, that’s £48 a day to travel to/from their constituency office. Some MLAs claim nothing. Within a constituency, some MLAs claim two or three times as much as colleagues.

While most MLAs live in their constituency and relatively close to their office, others do not and “are currently entitled to claim to travel many miles at public expense just to get to their constituency”.

The Panel does not believe that this can be justified.

Ceasing payment of home to office mileage from the start of the next mandate is estimated to save around £74,000 per annum.

But the panel go further and propose that the current mileage system for other journeys (including trips to meet constituents and travel to/from Parliament Buildings) be replaced with a flat rate system based on the ‘centroid’ of each constituency, the size of each constituency, and whether a ministerial car is provided.

If the proposals were agreed, flat rate travel expenses would range from £850 for Belfast MLAs through to £2350 in Lagan Valley, £6150 in Foyle and £7450 in Fermanagh and South Tyrone. There’s an assumption that MLAs will be in Parliament Buildings 110 days a year and do an equal amount of travel to visit constituents (though taking into account the size of constituencies).

Attendance

On the back of the mileage claim proposals, the panel also tackle attendance.

Where there is no record of attendance at the Assembly made by a Member, payments of salary should be suspended after a period of 3 months.

The payment of Travel and Subsistence Expenses would be conditional on MLAs attending Parliament Buildings. Attend for 99 days or more and full expenses will be paid. But MLAs would forfeit (and have to repay) 1% of their TSE for every day they’re absent below this threshold (which is set at 90% of the maximum 110 days). [Ed – Surely many MLAs are in Parliament Buildings more than 110 days per year?]

The panel propose to develop rules to take into account illness, committee business outside the Stormont estate and maternity/paternity arrangements.

The concept is meritorious, but it’s intrusive, subject to the drawing up of league tables and subsequent gaming of the system by MLAs living closest to Stormont, and the cost of administering the scheme will surely rival the savings.

Childcare Expenses

Having made bold proposals on other issues, childcare is perhaps even more sensitive, and the panel merely ask for feedback on whether MLAs should continue to be paid a childcare allowance (of £40/week for pre-primary, and £20/week for under 14s).

There’s no mention in the IFRP report of any discussions with HMRC who are normally very against flat rate expenses and prefer the payment of the actual expenses occurred.

Auditing

The panel “is currently exploring” with the Assembly Commission “the introduction of an external audit of Members’ expenditure”. From the beginning of the new mandate, a fifth of claims could be audited by external auditors.

Frankly, given the spotlight that was shone on Westminster expenses five years ago, I’m surprised that this doesn’t already happen.

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  • mickfealty

    I’m intrigued Alan (thanks for the post btw), which were you thinking of when you say “a number of proposals that interfere with the process of constituency work”.

    I had considered blogging the suggestion that MLAs recognise they are paid by the Assembly to represent their constituents rather than by their parties.

    It’s destined to get kicked to touch (since everyone, bar John Dallat) seems to have bridled at it, but I think they are more than justified in pushing it, not least because it is a reminder of an important principle of representative democracy.

  • The opening hours of constituency offices feel well outside the remit of a funding regulatory body. With differences in urban/rural split, varying levels of MLA accessibility (and residency) in local communities, many different patterns of serving constituents will exist.

    There is no one-size-fits-all approach to be recommended as best practice.

    And given that – for many – more than half constituency contact happens through Facebook and online means, the physical office – while it remains important as a meeting place for many issues and constituents – is less important than the ability of an MLA and their team to process case work.

    I appreciate panel’s arguments on some of the issues but feel they’re more suitable for an op-ed than their report.

  • barnshee

    A good start in dragging the snouts out of the trough

    bring on

    “The panel “is currently exploring” with the Assembly Commission “the introduction of an external audit of Members’ expenditure”. From the beginning of the new mandate, a fifth of claims could be audited by external auditors.”

  • chrisjones2

    Are opening hours not a real issue?

    Why should the public pay for offices if they are never open or only open when they cannot get to them?

    If many different models are possible why do they all pay large rents for offices? Why do they all spend so much on staff? And travel? And everything else?

  • mickfealty

    I feel a #SluggerReport coming on… 😉

  • T.E.Lawrence

    Alan in answer to your headline title “Is the IFRP right to interfere with the political process as well as pay ? Clearly No ! It falls well outside it’s remit. Since when did this 3 person quango put itself up to the electoral. I listened to Alan McQuillan earlier on the radio and his very “Hitler Statement” We will impose what we think best ! Is this the Northern Ireland in Disguise ?

  • Ben De Hellenbacque

    Quis custodiet ipsos custodes?

  • Ben De Hellenbacque

    I was being ironic

  • ranger1640

    A question, are constituency offices as workplaces exempt from the law regarding signs and emblems???

  • aquifer

    It is parties not politicians that get elected, pay the parties.

    That way the parties can pay to bring some young talent in or develop policies.

    Or pay a large standard annual amount and leave the member responsible for what he takes as salary, making the whole thing transparent for public accountibility.

    If he cannot manage £100,000 why should we trust him to manage millions?

  • Granni Trixie

    Quite revealing that you assume these proposals apply to “he” .

  • aquifer

    When I think of brazenly cheating expenses I think of men of course. Though the expenses nonsense at Westminster is because Margaret Thatcher did not want to pay parties.

  • To quote a section from the Equality Commission’s Promoting a Good & Harmonious Working Environment guidance:

    It is also important to reflect on the purpose or function of the organisation. For example if its function and remit is of a “political” or “religious” nature it may be acceptable and indeed expected that there may be some reminders of the nature of the organisation or its role in the community. Likewise if the primary function of the organisation is, for example, a nursing home, community group etc., it may well be that the actual function will also to some extent shape the environment. Obviously it would not be acceptable for such an environment to be threatening, hostile or unwelcoming for employees.

    Employers may also consider that different protocols should apply when employees are facing the public. For example, the organisation may wish to ensure that no section of the community perceives a “chill factor” when interacting with its representatives, and certain standards or dress codes may then be applied. Once more these standards and codes should be dictated by reasonableness and commonsense.

  • ranger1640

    Thanks Alan, it seems to me reading your post that a neutral working environment should also apply to constituency offices. Displays of only of a party logo and these should be kept to a minimum.

    “Employers may also consider that different protocols should apply when employees are facing the public. For example, the organisation may wish to ensure that no section of the community perceives a “chill factor” when interacting with its representatives”.