Posted 07/02/2017 by Cathy Madden and Deirdre McKeown
In the wake of the recent parliamentary entitlements controversy that culminated in the resignation of Health Minister Sussan Ley, on 13 January 2017 Prime Minister Turnbull announced the establishment of an independent parliamentary expenses authority to administer and oversee the work expenses of parliamentarians, including ministers. He indicated that the model used by the United Kingdom (UK) would provide the direction for the new independent authority. This post provides a brief overview of the UK model—the statutory Independent Parliamentary Standards Authority (IPSA).
The actual expenses schemes of Australia and the UK are very different, and the UK IPSA model operates within a stronger integrity regime in the UK Parliament—including a Parliamentary Commissioner for Standards and codes of conduct for MPs—than that currently operating in the federal Parliament. Nevertheless the UK administration of expenses may provide an effective model to reduce the controversy surrounding parliamentary entitlements.
In Australia, numerous reviews and audits have discussed the complexity and lack of clarity and transparency of the federal remuneration and entitlements framework. In addition, a number of agencies are involved in the process including the Department of Finance, the Remuneration Tribunal, the Department of the Prime Minister and Cabinet, the Department of the Senate, the Department of the House of Representatives, the Department of Defence and the Department of Parliamentary Services.
Independent Parliamentary Standards Authority (UK)
Following a parliamentary expenses scandal in 2009 the UK Parliament created the Independent Parliamentary Standards Authority which commenced operation in May 2010 (following the May general election), less than a year after the Parliamentary Standards Bill passed the Parliament in July 2009.
Under the UK Parliamentary Standards Act 2009 IPSA is governed by a five-member Board including a former judicial officer, a person qualified in audit and a former MP. Day-to-day operations are run by a Chief Executive. IPSA’s remit includes powers to independently regulate and pay MPs’ business costs and expenses. Following further legislative amendments in 2010 IPSA received powers to determine MPs’ pay and pensions, business expenses and staffing.
The Compliance Officer for IPSA is an independent statutory officer who has the power to review IPSA’s decisions about claims, recover overpayments to MPs and impose penalties where necessary. The Compliance Officer investigates matters as a result of a referral from IPSA, a complaint by a member of the public or on own motion (for more details see below). Other than wider conduct issues (which remain with the Parliament), IPSA has sole coverage and authority in regard to MPs pay and work expenses.
In an interview with ABC RN Breakfast on 17 January 2017 the Chief Executive of IPSA, Marcial Boo, noted the following aspects of IPSA’s operations:
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The two most important factors in IPSA’s effectiveness as a regulator are transparency and independence.
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IPSA pays claims for parliamentary activity not political activity and although the rules are clear there are disputes about this grey area. IPSA requires evidence for all items of expenditure.
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IPSA has the power to deduct money from MPs’ salary.
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All claims are published every two months.
2016 review of IPSA operations
A 2016 review of the operation of IPSA in its first five years of operation (2010–15) provides a useful overview of the challenges it has faced and how the organisation has evolved, often in response to consultation.
IPSA has a dual role as ‘regulator and provider of support to MPs’ and takes ‘both formal public consultation and informal discussion and engagement … very seriously’. The first iteration of the scheme of business costs and expenses ‘reflected the post-scandal climate in which it was put together’, but over the last five years IPSA has made changes to the scheme.
The review notes that the ‘Compliance Office may, by law, impose penalties on MPs for failing to comply with a request for information or a repayment direction. The maximum sum is £1,000. If the Compliance Office suspects that there may be a case for a criminal investigation, the matter is referred to the police’. If an MP is not satisfied with the Compliance Officer’s findings following a review, he or she may refer the case to a Tribunal. This has happened once in IPSA’s operation. The findings of the case are available on the Compliance Officer’s website.
Although IPSA is an independent organisation, it is subject to Freedom of Information and its spending is subject to scrutiny by the Speaker’s Committee for IPSA which also agrees to IPSA’s budget each year. IPSA has been subject to a review by the National Audit Office and an inquiry by a parliamentary committee into the operation of the Parliamentary Standards Act 2009.
IPSA is not represented by a Minister in Parliament but ‘Government policy matters concerning IPSA are … part of the responsibilities of the Cabinet Office’.