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Results: 1 - 52 of 52
John Sills
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John Sills
2013-11-19 12:05
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Chairman, I'm very pleased to be asked to appear before the Standing Committee on Procedure and House Affairs today. At IPSA we're very proud of what we've achieved over the past four years and I'm glad to have the opportunity to share some of our experiences with you.
As you know, IPSA was created by the Parliamentary Standards Act in 2009 in response to the MPs' expenses scandal in 2008. Parliament decided that the scandal was so serious that the only way to restore public confidence was to take both regulation and the payment of MPs' costs and expenses out of Parliament's hands, to create an independent regulator.
The Constitutional Reform and Governance Act in 2010 refined IPSA's role, giving it the power to determine MPs' pay and pensions as well, and creating the role of the compliance officer, which I'm happy to discuss further during questions. That independence is what defines IPSA. It allows us to take decisions about the rules we set, about the administrative services we provide, that we believe are in the public interest. We frequently consult, we always listen to all sides of an argument, especially when they are backed by evidence, but ultimately the decisions are ours.
A second crucial characteristic of how IPSA operates is transparency. The House of Commons in the U.K. had begun to publish receipts before the last general election in 2010, but that was after resisting their publication in the courts and then, unavoidably, after the full details had been leaked to the media.
For IPSA, publication of information about MPs' claims for business costs and expenses has been a priority from the start. We first published claims in November 2010, and have been doing so on a two-monthly cycle ever since. We also publish aggregate data for the preceding financial year, ending in March, every September. This transparency, as well as complying with the aims of the U.K.'s Freedom of Information Act, allows the public to see what their MPs are spending and to decide for themselves what they think of it. It means that there's strong accountability and better understanding of the financial support an MP needs to undertake his or her parliamentary duties.
A third important element is how we provide support to MPs in carrying out their parliamentary duties. Quite unusually, we provide the payroll services, model contracts, and pay ranges for MPs' staff and, of course, we pay their costs and expenses. So we both regulate and provide those services.
Our system is based on reimbursement on the provision of evidence. But we also pay some suppliers, like landlords, pooled research services, and stationery suppliers directly. This means the MP doesn't have to pay the money out of his or her account first. MPs also have access to an online rail ticket service and have a payment card that can be used for a range of transactions. What this means is that it's possible for an MP to now pay for up to 70% of claims by value through direct payment.
We didn't have all of this from the start. IPSA moved from a blank sheet of paper on the chief executive's desk in October of 2009 to a fully functioning organization with an office, with an online claims system and a new scheme of rules, in time for the new Parliament on May 6, 2010, a really quick process.
The Office of Government Commerce in the U.K., reviewing our implementation program, said we had achieved the impossible. There were certainly challenges operationally in the early days, not least because of the registration requirements before claims could be made, and the time needed by some MPs to get used to claiming online. Some MPs also experienced cashflow problems, and we addressed those in the short term through the swift introduction of an interest-free loan of up to £4,000.
It was a learning process for both MPs and for IPSA. There were tensions. But over time most of these problems have subsided, and we have a system that works well. Most MPs and their staff are familiar with the rules and the IT system. Claims are generally paid within seven to nine working days of receipt. As I noted earlier, many of the high-value transactions can be paid directly by IPSA. Salaries are paid promptly and accurately, and every two months we publish the details of over 30,000 claims.
In policy terms we keep an eye on how the rules are working, and we review them and consult every year. We're about to open a new consultation next week. But our focus has shifted in the last year or so to MPs' pay and pensions, where IPSA's powers were brought into force in 2011. We have run two consultations, the first an open exploration of the issues; the second a focused consultation on a proposed remuneration package that features a pay increase of about 9% to begin after the 2015 general election in the U.K., and a reform of MPs' pensions to bring them more into line with the rest of the public sector. Our board will be taking decisions independently later this year.
So, to end, what are our priorities right now? First, it's to complete the work on pay and pensions. Second, it's to continue our preparations for the 2015 general election. We'll be doing that in cooperation with the House of Commons and with MPs themselves. And thirdly, we continue to look at ways of streamlining our processes to make sure we are maximizing value for money and delivering our services as efficiently as possible.
I hope that gives you something to get the ball rolling. I welcome questions, Chairman, from you and from your committee.
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John Sills
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John Sills
2013-11-19 12:12
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Well, we have a board, which is enshrined in legislation, with five members. The chairman is Sir Ian Kennedy. We have an ex-High Court judge—this is required by statute—Sir Neil Butterfield; an auditor, Anne Whitaker. An ex-MP, Tony Wright, a well-known MP, was the ex-chair of the public administration committee, amongst other things. And then we have one other board member who doesn't have to have a particular role, who is Liz Padmore, who chairs a National Health Service trust in the U.K.
Now, those have all been selected by open competition. Sir Ian was selected as chairman in 2010, and was appointed by the Speaker of the House of Commons. This is not a government appointment and it's not an opposition party appointment, but the Speaker was heading up that process. So Ian was selected then, and a number of other board members.
They will have three-year terms and all decided not to apply again. So we have a new board, apart from Sir Ian, from the beginning of this year, the people I've just described. Again, they were all selected through open competition by a panel that was again chaired by the Speaker, John Bercow, and included our chairman and a number of other public figures with expertise in senior appointments.
As for the other members of the team, initially, IPSA was, as I said, created extremely quickly, and our chief executive, Andrew McDonald, was a civil servant connected with the Ministry of Justice, which then had the policy responsibility for constitutional matters. So Andrew was appointed as interim chairman. The senior members of the team, including me, came by a number of routes. I personally was seconded from the Ministry of Justice. I've been there for three and a half years. Other directors since then have been appointed through open competition.
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John Sills
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John Sills
2013-11-19 12:14
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It is, yes. It's audited by the National Audit Office and we are also often scrutinized by parliamentary committees. Our budget has to be agreed by a special committee, which is the Speaker's Committee for IPSA, again chaired by the Speaker, obviously, and that comprises MPs from various parties and some lay members as well.
So they're not in the business of telling us exactly what to do, obviously, because we're independent, but they do agree to our budget. As I say, we're audited by the National Audit Office. We have been scrutinized by the public accounts committee, and we've had a number of other parliamentary committees looking at us over the last three years.
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John Sills
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John Sills
2013-11-19 12:15
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In our first year, quite quickly, we had the value-for-money review by the National Audit Office. Now, this is most unusual for an organization of our size in its first year, but obviously given the political sensitivities of what we do, there was a lot of interest in that.
The National Audit Office, if I recall—I'm afraid I don't recall all the detail now—gave us a pretty good report, and we were very pleased with that. But it did make a number of suggestions. An example was how we validate claims. When we started—and you may not be surprised, given why we were created—those individual claims were checked two or three times to make sure we got it right. Over time we've streamlined that, and one of the things that the NAO has been very keen to see us doing is to use a much more risk-based approach to the validation of claims. So with the fairly bog standard claims with a low risk, you don't need to spend too much time on those, but what you can do is audit them later. And we're doing a lot more of that now, where our audit team takes a look at patterns and outliers and things like that, and that picks up some of the more unusual claims. But yes, we've been pretty heavily scrutinized.
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John Sills
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John Sills
2013-11-19 12:17
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Apart from highly sensitive security-related claims and claims having to do with disability, where we just provide an aggregate figure once a year for all MPs, we basically publish everything. The way we do it is that we extract the relevant information from those claims and report that. What we don't do at the moment is actually publish the receipts themselves. We thought long and hard about that at the beginning and took the view that, firstly, it was an unnecessary and very expensive process because you have to redact a lot of information, because of personal information and that kind of thing, and that costs a lot of money.
But also we were concerned because redaction is, to be honest, a mind-numbing process for the people who have to do it. There's always a risk that personal information could be missed. The way we do it cuts out that risk. We publish the information itself.
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John Sills
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John Sills
2013-11-19 12:19
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I think it's fair to say there was resistance at the beginning. It's a very different relationship, when you've got an independent regulator, from when it's done in-house. And although Parliament obviously did vote for our creation, I think there were a good number of MPs who weren't really that happy that we existed. The resistance, I guess, took a number of forms. One was that quite a lot of MPs didn't really want to have to submit their claims online. They were used to doing them in a paper-based system, and since this required more time and effort, we did have some difficulties with that at first.
As I said earlier, we were heavily, heavily scrutinized for an organization of our size, and that takes up a lot of time for a small organization. And there was a certain amount of hostility, it's fair to say. One of the things we did early on was have a lot of seminars with MPs from different parties, and it's fair to say we didn't get a warm welcome.
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John Sills
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John Sills
2013-11-19 12:21
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We don't hold meetings in public. Our board meetings are private, but we do publish the minutes of those meetings. We don't routinely publish board papers, but under our freedom of information act people can ask to see them and then we will make a judgment about whether it's in the public interest to release those papers. We have released a fair number in the past.
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John Sills
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John Sills
2013-11-19 12:22
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Yes, there is. It is quite a complex process. It works in a number of stages. First, if we say we won't publish information, for whatever reason, the requester can ask for an internal review that has to be carried out by a senior member of IPSA who wasn't involved in the original request.
If after that review we are still saying no, then the requester can take the issue to the information commissioner, which is the body that oversees freedom of information and data protection in the UK.
If they are still not getting the answer they want, they can take it to a tribunal. Then it can work its way up the justice system. So there are a number of steps. People often ask for internal reviews. It is quite a frequent occurrence.
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John Sills
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John Sills
2013-11-19 12:23
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There haven't been many, but there's one in process at the moment. In fact, it's a very interesting one. It relates to one of my previous answers, which had to do with somebody requesting to see some receipts. We said no. The internal review agreed not to show them. So the requester went to the information commissioner, who said yes. We are now appealing that decision.
We have been to a lower-tier tribunal and we're about to go to an upper-tier tribunal. That hearing is going to be taking place later this year. So it could be an interesting outcome.
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John Sills
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John Sills
2013-11-19 12:24
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I think the current board in particular is very keen to do things by consensus. It's been in place for nearly a year now and as the director I go to all the board meetings. It doesn't come down to a vote if there's a good argument. Directors coming from quite different backgrounds can have different views on matters. Having been advised by policy officials like myself, they work very hard to find consensus. If they had to vote they would, but we work through consensus if we can.
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John Sills
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John Sills
2013-11-19 12:25
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I'm trying to think, but not a real “hands up because we can't decide this”. People work hard to find consensus. We've had votes in the past but not this time around.
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John Sills
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John Sills
2013-11-19 12:26
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We have a set of rules that govern all MP's expense claims, and we consult on those rules. When they started we had extensive consultation, and we review them every year. As an independent body we then set them, and that's it, basically: they are the rules.
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John Sills
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John Sills
2013-11-19 12:27
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We have regular discussions with all the parties, and other political figures. When we consult we always make the effort to discuss matters with them and seek their views.
We also have a parliamentary group called the IPSA-MP liaison group with a number of senior MPs, which meets from time to time to discuss issues. There are plenty of ways of having those discussions.
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John Sills
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John Sills
2013-11-19 12:28
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In the first instance, they could ask for IPSA itself to review it. We have an audit team that would review the decision.
If they are not satisfied with that, they can go to the compliance officer, who is independent of IPSA. He is appointed by the IPSA board but he operates independently. If an MP isn't happy that something hasn't been paid, then he or she can take it to the compliance officer. It's relatively rare, but it has happened.
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John Sills
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John Sills
2013-11-19 12:29
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It's meant to meet once a month, but it quite often meets more than that. It has one formal board meeting a month, but we have been holding a lot of workshops because of a huge range of issues that we're dealing with at the moment. The board has in recent times been meeting two or three times a month, but that is unusual. It is generally one meeting.
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John Sills
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John Sills
2013-11-19 12:29
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It's interesting. At the beginning there was talk of having cameras and so on, but we decided that we didn't think that was going to work. So what we do is to publish those minutes.
For example, when we consult we'll always report back on the views of the public and the reasons for our decisions and so on. At this point in time, I don't think there's much appetite for actually holding public meetings.
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John Sills
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John Sills
2013-11-19 12:30
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Well, we have the power to do that now. We've been consulting about that. We've already determined MP's salaries. These are backbench MPs, by the way, not government ministers' salaries. We said for the current year and the next year that they should get a 1% pay increase, which is the same as the rest of the public sector.
The decision on what happens after the next election is what we're consulting on, and we will set the exact salary and the pension contributions, benefits, and so on. We are working on that at the moment. We have consulted very widely, but it will be IPSA's decision alone.
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John Sills
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John Sills
2013-11-19 12:31
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We've consulted in all sorts of ways. We do it in the traditional way, with a consultation paper inviting responses; we have an online survey; we've done quite a lot of opinion polling. Last year we conducted a number of citizens' juries, which I know is something that has happened in Canada quite often, whereby you can really get to understand what the public are thinking, if you're with them for three to four hours getting more information. That was extremely helpful. Obviously we consult MPs.
For something such as the pensions, we've worked a lot with the trustees of the MPs' pension fund. In fact, I personally am one of the trustees—IPSA has a member on the MPs' pension fund.
We basically look for as many ways to consult as we can.
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John Sills
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John Sills
2013-11-19 12:32
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They're all appointed by open competition, but what the legislation requires is that we should have a High Court Judge, an auditor, and an ex-MP. It is not specified what the chairman's background should be, and it's not specified what the background of the other board members should be. But those three are there in statute.
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John Sills
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John Sills
2013-11-19 12:33
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What discretionary spending is available? Well, we set budgets in a number of areas—staffing, office budget, accommodation, residential accommodation—and within those budgets' limits, as long as it's for parliamentary purposes, it's up to the MP what they claim. In that sense, they have a good degree of discretion about how they use their budgets.
As far as individual claims are concerned, we obviously determine them.
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John Sills
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John Sills
2013-11-19 12:34
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Yes, travel is another one of the budgets. That's not capped, because obviously an MP from Scotland—the other side of the country—and an MP from near to London are going to have very different travel expenses. They are done on the basis of an uncapped budget.
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John Sills
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John Sills
2013-11-19 12:35
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I'm trying to remember. I don't think we do that for every individual journey. We just say where it was to.
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John Sills
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John Sills
2013-11-19 12:35
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We don't publish receipts, but on what we call constituency travel, the MP makes the claim. Basically, they have a mileage rate, and so they just say how many miles they've travelled, where from, and where to.
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John Sills
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John Sills
2013-11-19 12:36
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IPSA costs every year about £6 million. We're both the regulator and the provider of payroll and expenses. And of course, as an independent organization, you have to have all the normal overheads—HR, IT, and so on.
So the total is £6 million. We dispense around £160 million of funding, so this is a relatively small proportion of the overall total.
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John Sills
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John Sills
2013-11-19 12:37
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It's around £20,000 to £25,000. It depends whether the office is in London or outside London. It's slightly more for London. London is about £24,000, and others are about £21,000.
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John Sills
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John Sills
2013-11-19 12:37
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That's a good question. I'm not sure I can quite remember that. I think it may have been, or with very few in opposition, because I think all MPs recognized at the time, given what had happened, that it was important to create IPSA. Also, it went through extremely quickly. I think it was a couple of months at most for the whole process.
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John Sills
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John Sills
2013-11-19 12:37
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That's a very good question.
We do survey the public. Support has gotten better; it's just under 40%. The last time we surveyed the public, 40% of them thought things had gotten better. But of course, the stories are over. You may have seen, only yesterday, that an ex-MP pleaded guilty over expenses. That has nothing to do with the current Parliament, but an ordinary member of the public won't necessarily make a distinction.
So I think it's fair to say that most members of the public will probably say things seem okay but that we're still not that trusting. There's a long way to go, I think.
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John Sills
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John Sills
2013-11-19 12:38
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One things that is asked frequently is, why we don't just have an allowance for something such as accommodation in particular, to make it nice and simple but less transparent. We have considered this in the past but think the time is certainly not right for it at the moment. You'd lose the transparency, and that's the absolute key for us at the moment.
We have refined our rules. Some of the rules on things such as accommodation for family members, for example, have been relaxed over the years. We're always open to change.
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John Sills
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John Sills
2013-11-19 12:39
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On the first one, the overall cost including expenses is still slightly below what the House of Commons used to cost. It's very hard for us to make a meaningful comparison between ourselves and the House of Commons administration, because of course they were part of a bigger organization, and so a lot of their overheads wouldn't have been as clear, because they would be in the wider organization. It's pretty difficult to say precisely what the difference is.
In terms of the amounts we pay our board members, I'm afraid I can't remember them right now. They're on our website, and I'd be very happy to provide the information to your researchers.
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John Sills
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John Sills
2013-11-19 12:45
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Yes, that's right. For example, if we're advising the board on changing the rules on something or other, if there's a paper on that and somebody asks to see it—because they've seen it referred to in the minutes—then we'll consider what we can and can't show them.
Our assumption is to try to, if we can, actually provide the information. We just have to ask ourselves whether there is personal information in it, what impact it would have on what is defined as the effective conduct of public affairs, which is a key part of the Freedom of Information Act. But we don't publish transcripts; we don't have a transcript.
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John Sills
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John Sills
2013-11-19 12:46
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I think it's quite important to distinguish between two things. I referred to the compliance officer, and he looks at claims and whether they should have been paid or whether they should have been made in the first place. He doesn't look at the conduct of MPs. That is handled by the parliamentary commissioner for standards, who is part of Parliament. I think some of what you were referring to is probably closer to that.
On the compliance officer, though, what he does is that if a complaint is made against an MP's claims or he's looking at the appeal I referred to earlier, he'll first assess the issue, and that will be done privately. But if he decides to investigate it, then that will be made public. That's published on his website, that he is making an investigation into an MP's claims, and he'll publish the outcome as well.
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John Sills
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John Sills
2013-11-19 12:48
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There are two answers to that question.
First, if you really wanted to know, in terms of the people who set the rules and so on, you'd need to ask people from the House of Commons rather than me. But I think the general answer is lack of transparency. It was a closed system for most of the time, and like any closed system, things happen, ways of doing things develop, so when they come out and are revealed to the public, the public recoils against them. That's essentially what happened. When the public saw some of the claims that were being made, they weren't happy about it. Transparency, though, is the key.
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John Sills
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John Sills
2013-11-19 12:49
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I think so, yes. Some things were, but it's easy with hindsight. The vast majority of MPs would say, and I think we'd have to respect this, that it was allowed, that it was in the rules. For example, we could take the furniture claimed for accommodation. We don't allow that, as a response to the scandal. There were examples of MPs buying big flat-screen televisions and so on, but they were allowed, so if something is allowed and it's not published, then it's much easier to think it is okay and one is not doing anything wrong. But when it's exposed there's a different view.
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John Sills
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John Sills
2013-11-19 12:51
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I can't remember the exact percentage of the number of claims I turned down. It's a tiny, tiny amount. Again, you can see them on our website individually. We call them “not paids” and they are very few and far between. So yes, I think it's fair to say that the vast majority of MPs are complying very happily with the rules and are claiming things they need for their parliamentary business.
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John Sills
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John Sills
2013-11-19 12:52
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It confirmed the information commissioner, and we are appealing to a higher tribunal, essentially on points of law.
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John Sills
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John Sills
2013-11-19 12:53
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I think there are two principal reasons.
One is that we believe very strongly that all the relevant information has already been published, and the way we do it helps to deal with that risk, as I said earlier, of accidentally giving away personal information. The information commissioner disagreed with us and it was almost for things like, what's the colour of the heading, or did the MP scribble something on it? It's that kind of thing. It becomes quite an arcane argument about what constitutes information. I won't bore you with that now but that is the sort of legal issue.
The other issue, which in many ways is just as important, is that this will be an incredibly costly exercise. It would cost at least a million pounds a year to have the redaction team that is necessary to take out all the personal information. We also have a backlog. We've got about 600,000 to 700,000 receipts now, and if we have to publish all of those, that would cost us, again, almost a million pounds. It would be a massive undertaking with very little public value.
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John Sills
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John Sills
2013-11-19 12:55
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Yes, that's exactly right. Under employment law, people can transfer, and on their same terms and conditions. I forget the exact number, but initially probably around 20 to 30 operational staff from the House of Commons did transfer over. Obviously, some of those have moved on now, but quite a lot of them are still with us. The senior team on the whole didn't transfer. Most of the senior team is new, and in fact, to make one other point, I think the vast majority of those ex-House of Commons staff have now transferred over to exit terms and conditions.
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John Sills
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John Sills
2013-11-19 12:56
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Yes, we are still regularly in the news.
It's often attached to a particular announcement we're making—pay and pensions, for example. When we proposed a pay increase, as you can well imagine there was a strong public reaction and media reaction to that. When we published the annual data on MPs' expenditures in September, that created a lot of interest this year.
The interesting thing is that what we've found is the regular publication of expenses at a national level attracts very little interest now. But it does still attract interest at the local level. MPs find that their local newspapers do pick up on their expenses and often use that against them. That is quite painful for them.
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John Sills
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John Sills
2013-11-19 12:58
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The question for you is always going to be what the problem is that you're trying to solve.
In the U.K., parliamentarians felt the scandal was so big that we needed a wholly external independent operation. The question then is whether you can be truly independent if you're in-house. That's always the exam question, isn't it?
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John Sills
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John Sills
2013-11-19 12:59
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Yes, that's exactly right. As I say, it's quite a turbulent process. Getting the legislation through, setting up a new body, establishing it, the transitional processes. So you do have to ask yourself if your problem is big enough to make that kind of change.
I can't answer that for you, obviously. That's what you're doing in your review at the moment. All I can say is that I think our system now works extremely well, but it was created for a purpose, which was that we had a very big expenses scandal in 2008.
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