We don’t check all receipts from MPs, expenses watchdog admits
... and just 1% of claims are rejected
WESTMINSTER’S expenses watchdog has admitted it does not check all MPs’ receipts – meaning there is a risk that unjustified claims could get through.
The Independent Parliamentary Standards Authority revealed it now only checks a ‘ representative sample’ of claims, turning down less than 1 per cent a year.
The change was made for ‘value for money’ reasons after the organisation decided that most of the £18million-worth of claims every year ‘did not need excessive amounts of inspection’.
It means that when officials consider whether to allow taxi receipts, for example, they have to take MPs ‘at their word’.
In a report on Ipsa’s first five years, released last night, chairman Sir Ian Kennedy also launched an extraordinary defence of its decision to award MPs an inflation-busting pay rise in 2015 – saying it was ‘right’ and served the public interest.
And Ipsa revealed it no longer likes the word ‘expenses’ – saying payments to MPs should be referred to as ‘business costs’.
The report said: ‘In the first edition of the scheme, we referred generally to “expenses”. Because these retain a connotation of personal benefit, we now emphasis business costs – the funding MPs need to do their jobs effectively.’
The document said that the watchdog receives around 180,000 claims each financial year valued at between £15million and £18million. But of these claims, less than 1 per cent are not paid each year. ‘As our understanding of the volume and nature of claims has grown over the years, we have refined our approach to validation,’ the report said.
‘When we began operations in May 2010, all claims were validated by at least two people, to avoid the risk of claims either being inadvertently paid, or conversely, being unreasonably refused. It became clear early on that the vast majority of claims were for very routine accommodation, office and travel costs and did not need excessive amounts of inspection.’ The paper said Ipsa then started taking a ‘more streamlined approach to low-risk, low-value claims’.
‘Today we have a three-layered approach to the validation and assurance of claims which takes account of risk and also seeks to reimburse MPs, or their suppliers, as quickly as possible.’ As part of a three- stage process, step one involves ‘scanning and processing all claims and payments with only a representative sample of claims assessed in detail’. Only ‘certain types of claim’, where the risk of error is deemed ‘relatively high’, remain subject to individual scrutiny.
Step two sees a member of Ipsa looking at each MP’s claims in the round every three months, to look for unusual patterns. In the final step, a separate team carry out a series of ‘assurance reviews of aggregate spending’.
The report admits: ‘There is of course a risk that some claims which should not have been paid will not be identified under step one of the validation process.
‘This is an unavoidable part of the risk-based approach... We still have work to do to persuade the media and the public that this... approach is good practice and good value for money, because it reduces the administrative costs to both MPs and Ipsa.’
On taxi receipts, the report adds: ‘It took us a while to establish an approach to validating claims that was not over-zealous, but without giving MPs carte blanche to claim for taxis. We rely on MPs giving a reason for travel, but now take them at their word.’
In his foreword, Sir Ian attacked journalists who were still ‘ferreting to find an MP who had broken a rule’. And he defended Ipsa’s decision to recommend MPs’ pay rise to £74,000.
‘The allure of falling back on the excuse of “it’s not the right time” was resisted,’ he said. ‘And now, a year after the pay rise was implemented, there is a sense that we were right and that Ipsa put down a marker that will make tough decisions if the reasons are good and the public interest is served thereby.’
‘Take them at their word’