Transparency, trust and parliamentary expenses: lessons from the International Parliamentary Regulators Conference

0.000Earlier this year, the Independent Parliamentary Standards Authority held the first ever conference for international parliamentary regulators. Here, Vicky Fox discusses how other national regulators operate, and offers an insight into some of the discussions  at the conference by academics, transparency advocates and serving members of the UK parliament.

In March 2019, the Independent Parliamentary Standards Authority (IPSA) hosted the world’s first conference for international parliamentary regulators. We brought together colleagues from 13 parliaments on five continents: Australia, Chile, France, Germany, Hong Kong, Ireland, New Zealand, Norway, Republic of (South) Korea, Scotland, Wales, Zambia and the UK. We talked about transparency and trust – what it means in the parliamentary regulatory sphere and the role that regulators, the media and elected politicians all play in creating trust in democracy.  

IPSA was created in the United Kingdom nine years ago in the wake of the expenses scandal. But there have been similar difficulties in other countries, including in Australia where an Independent Parliamentary Expenses Authority (IPEA) started operations in 2018. Systems of regulation vary across countries with differing degrees of independence from the national parliament. For example in Hong Kong, pay and allowances are set by the Hong Kong government on advice from an Independent Commission, whose members it appoints. The Legislative Council Secretariat processes pay and reimbursement of claims. In Norway MPs’ salary and other expenses are regulated by law and guidelines. MPs’ salary is set by the Storting, the Parliament, based on a recommendation from the Salary Commission. In Wales there is an Independent Remuneration Board which sets the pay and allowances for Assembly Members. And in Zambia, pay and expenses are set out in legislation and administered by the Speaker.   Continue reading

IPSA, parliamentary reform and constitutional watchdogs

In a blog entry in October, I discussed the review by the HC Members Expenses Committee (MEC) of the Parliamentary Standards Act 2009 and the operation of IPSA, concentrating in part on the complex issues of independence and accountability of public bodies such as IPSA, who have some form of a constitutional (especially parliamentary) watchdog role.  This is a subject the Constitution Unit has studied for a number of years, and the creation of IPSA has ignited a fascinating debate between IPSA on the one hand and the Committee on Standards in Public Life (CSPL) and elements of the House of Commons on the other over the legal and constitutional duties  and functions of such a watchdog.  My concern was that the MEC inquiry was too limited and ‘exclusive’ to examine these fundamental issues sufficiently thoroughly.

The MEC has now reported (to a deafening silence, the political classes and media being almost exclusively focused on the PM’s Commons statement on the Eurozone summit/’veto’), and it does address these issues among the more substantive (and probably more newsworthy) issues of the nuts and bolts of MPs expenses.  Not surprisingly, it comes down in favour of the view that, in effect, that IPSA’s statutory duty merely to have regard to ‘supporting MPs efficiently, cost-effectively and transparently in carrying out their parliamentary functions’ should be upgraded from one to which it merely has to “have regard” into becoming its ”prime directive’.  IPSA’s claim that, as a self-proclaimed regulator, its primary duty is to “the public interest” has, rightly, been given short shrift.  This emphasises the importance of efficient delivery of functions – even where its purposes are, as the Committee criticises here, not made explicit in the founding statute because of legislation in haste – over a more lofty claim by a watchdog of being custodians of the public interest to which all else must be subservient.  What will Parliament (and the courts?) make of all this, both in any amendment of the IPSA legislation and in the establishment or reform of constitutional watchdogs generally?

On the specific problem of institutional design of a Members resourcing system that is both effective and maintains public confidence, the Committee has tried to steer a careful, apparently logical if (intentionally?) opaque line, proposing reforms designed to appear sensible and practical, without provoking a media and public backlash that politicians are grabbing back the control they were forced to cede in the 2009 crisis.  Its proposed structure supports retention of independent determination and regulation of the payments system for MPs’ costs, but suggests that “IPSA’s current administrative role should be carried out by a separate body, so that IPSA is not regulating itself, and the Act should be amended to permit this,” and that this separate administrative body “be within the House of Commons Service.”

Though presumably intended to be much narrower in function and responsibility – but what is IPSA’s purely ‘administrative’ role that can be severed safely? – will this new body not risk being regarded publicly as the return of the Fees Office, and, by implication, of the ‘bad old days’ pre-2009?  The Committee appears to have recognised the warnings given to it and CSPL about inappropriate mixing of regulatory and other other related functions, and their impact on independence and accountability, and it believes that its new ‘semi in-House’ system will be better than the pre-IPSA one because “independent regulation by IPSA and transparency would ensure that it did not replicate the deficiencies of the old expenses system.”  Really?

The Committee has recognised what some of us said to CSPL in 2009 about the loss of necessary expertise and understanding of the unique, ‘politicised’ world of parliamentary resourcing implicit in the creation of an ‘independent’ extra-parliamentary body like IPSA, and its proposal is presumably designed to remedy this, and thereby remove the running sore between Members and IPSA.  But structure isn’t everything – in such an environment, culture and ethos are as, if not more, important for the proper operation of parliamentary resourcing that does not become more in the interests of MPs as individuals rather than as the public’s elected representatives.

The fatal flaw of the ‘bad old days’ was not self-regulation per se, but the corrosive, exclusive and self-interested culture nurtured by decades, even centuries, of an irresponsible absence of effective accountability.  The Committee were clearly not keen on my submission that what was required was “”a system of modern parliamentary self-regulation, buttressed by an independent element to ensure that it was being operated transparently and responsibly and was not being abused”, describing it as going further than the views of its other witnesses (para 74).  However, the Committee does not seem to regard self-regulation in the area of parliamentary resourcing as inherently wrong, merely, presumably, undeliverable in the post-2009 climate.  In the same paragraph, it cites with implicit approval CSPL’s view that enhanced self-regulation could be retained at Holyrood and Cardiff Bay because “neither … has suffered a crisis of trust remotely comparable to that which has affected Westminster.”

This is a rather sad, defeatist attitude on whether and how Parliament can fundamentally reform itself, and in ways beyond questions of resourcing.  Without a fundamental culture change, the Committee’s proposed semi self-regulation ‘solution’ will be hard to make work both effectively and in a way that gains and retains public trust.  In fact it risks making things worse by reigniting public fury without ‘solving’ MPs’ discontent with IPSA, or, more fundamentally, without achieving its stated aim of providing an effective Members’ resourcing system (quoting with apparent approval my submission that ““the proper resourcing of the people’s elected representatives is a necessary precondition for a modern representative parliamentary democracy” (para 8)).

So, two cheers to the Committee for seeing the problems and sensing what the direction of reform should be.  But the third cheer must be withheld because of its failure to propose more fundamental cultural reform that would enable its proposals to succeed.  But this is typical of how parliamentary reform is done (or not) in Westminster – and Whitehall.

MPs’ Expenses, IPSA and Constitutional Watchdogs: A Parliamentary Committee Inquiry-Lite?

Did you know that a House of Commons Committee is currently holding an inquiry into the Parliamentary Standards Act 2009? No? Thought not.

The Act is the centrepiece of the Government-inspired response to the Members’ expenses scandal, and which created IPSA (Independent Parliamentary Standards Authority).  Given the media and public firestorm over expenses in 2009, and the continuing bad press – especially the patent lack of sympathy with Members’ criticisms of the new system – it is a pity, if not really surprising, that the current Inquiry, by the aptly-named Members Expenses Committee, is proceeding almost unnoticed.

The Inquiry was ordered by the House in mid-May, but was not actually announced until mid-July, after a protracted delay in establishing the Committee’s membership, when it was given until the end of this year to report.  Its remit was relatively broad, perhaps to reflect the range of Members’ concerns about the operation of the IPSA-run system:

“to review the operation of the Parliamentary Standards Act 2009 and make recommendations, giving due consideration to ensuring:
(a) value for money for taxpayers;

(b) accountability;

(c) public confidence in Parliament;

(d) the ability of Members to fulfil their duties effectively;

(e) fairness for less well-off Members and those with families; and

(f) that Members are not deterred from submitting legitimate claims.”

A Committee press release of 20 July sought written evidence by 3 October.  This evidence has now been placed on the Committee’s website, including a submission by me. To date, there have been 4 oral evidence sessions since mid-September.

It is a pity that there has not been more interest in this Inquiry. Apart from the detailed issues of the structure and operation of the new expenses system (as an aside, the Committee is chaired by Adam Afriyie, who publicly supported in 2009 the replacement of the current salary and expenses with a single ‘consideration’ based on the initial 1911 figure of £400pa, as up-rated by reference to average earnings), it is proving to be a forum for more fundamental questions of constitutional interest, including the nature and purpose of ‘constitutional watchdogs’, especially those which have a close connection with Parliament.  This is an issue which has long interested the Constitution Unit, being the subject of two Reports and one book chapter published by it (I declare an interest as a co-author of these).

A fascinating debate, within and outwith the Inquiry, has been raging on what sort of body IPSA actually is, and what its primary function should be.  While MPs and the Committee on Standards in Public Life see IPSA mainly as a body to administer schemes of financial support for MPs in carrying out their parliamentary duties, IPSA sees itself primarily as an independent regulator, and as such, its fundamental purpose is “to serve the public interest”.

At heart, as with any such ‘watchdog’, is the interrelationship between the two principles of independence and accountability, one which is especially difficult and complex when what is being ‘regulated’ is Parliament itself, the ultimate constitutional watchdog.  With the principle of independence entrenched in the scheme establishing IPSA – as rushed through Parliament by ministers in the 2009 Act, and revised by legislation last year – MPs are focussed on IPSA’s accountability, by which they mainly mean, answerability to the Commons (through mechanisms such as the Speaker’s Committee for IPSA).  On the other side, IPSA’s maximalist view of its regulatory rather than mere payroll/administration role, emphasises its independence, especially from the very people and bodies which it is ‘regulating’.

Unfortunately, the Inquiry doesn’t seem so far to be addressing these complex questions in any evidence-based way, such as by research into, or much direct interest in, how other parliaments, including the 3 UK devolved institutions, address these problems. This absence of comparative perspective is regrettable.  For example, the Scottish and Welsh systems are of direct relevance, and the present Chair of the Welsh Assembly’s Remuneration Board, George Reid, would be a useful witness, being a former MP and Holyrood Presiding Officer.

With such a short timescale and methodology, this Inquiry cannot hope to do all its terms of reference justice.  All it can do is address, and maybe assuage, some of the main grievances voiced by Members since 2009, which was probably the main reason for this Inquiry in the first place.

What would be of value – apart from any tinkering with the detail of the IPSA-run system – would be for the Committee to recommend strongly in its report to the House that a dedicated committee of inquiry of some sort should be established to address the fundamental questions of IPSA’s relationship with Parliament and how the twin pillars of its independence and accountability can be reconciled positively for the benefit of the public, both as taxpayers and as constituents of adequately-resourced MPs.  The Public Administration Committee began the process in the last Parliament of examining these tricky issues where there are constitutional watchdogs.  That would provide a useful starting point for any future inquiry.