Office Costs Allowance (Hansard, 9 July 1992)

§ Mr. Newton

I have today placed copies of the TSRB's report in the Vote Office.

The TSRB's proposals

The TSRB's wide-ranging report recommends fundamental changes to the level and structure of the OCA.

The main recommendations are:

(a) to disaggregate the OCA into separate allowances covering expenditure for different purposes (eg staff, equipment etc) in order to improve accountability;
(b) a separate staff allowance of £33,360 (includng the 4.25 per cent. uprating from 1 April) to enable MPs to employ up to 2 full-time staff rather than 1½ as at present;
(c) a separate allowance of £4,000 for general office expenses;
(d) central procurement of IT equipment, to be introduced as soon as possible;
(e) as an interim measure, a separate one-off initial acquisition grant for IT equipment of £5,000. available to all MPs, but with the general office expenses allowance halved in the year in which the grant is taken;
(f) a separate additional allowance of £2,000 a year for MPs basing their activities in their constituency, provided they occupy only "the basic minimum accommodation at Westminster as defined by the House";
(g) the creation of a Personnel Office, separate from the Fees Office, to advise MPs and their staff on matters including rates of pay and job specifications;
(h) (in the expectation that their Report would not have been implemented in advance of the general election this year) only one quarter of the allowance for 1992–93 should be available to Members between 1 April 1992 and the election.

If implemented in full these recommendations would increase the maximum of the OCA from the 1991–92 figure of £28,986 to between £37,360 for a Member not entitled to the constituency office allowance and not claiming the one-off initial acquisition grant and £42,360 in 1992–93 for a Member claiming both, which would cost up to an additional £8 million in the first year. In percentage terms the increases would range between 23.6 and 40.2 per cent. in addition to a 4.25 per cent. increase due from 1 April 1992 in line with the existing uprating formula.

The Government's Views The TSBR's proposals raise three fundamental issues: compartmentalisation of the OCA; central procurement of IT equipment; creation of a separate Personnel Office.

The key argument for compartmentalisation of the OCA is that it would improve accountability. But almost all MP's expenditure on office, secretarial and research support is disbursed directly by the Fees Office or reimbursed on the basis of invoices submitted. The Government do not consider therefore that disaggregation would significantly improve accountability, but it would reduce MP's flexibility to make most effective use of the OCA. The Government do not therefore support this proposal. It follows that we oppose the creation of a separate constituency office allowance. It would be exceedingly difficult to define an acceptable criterion based on a Member occupying "minimum accommodation at Westminster". It would also be difficult in some areas—for example, portable office equipment—to distinguish between general office expenses and constituency office expenses.

Turning to the provision of IT equipment, we believe that the case for central procurement needs further consideration. It should be possible to negotiate discount arrangements without the need for bulk purchase of equipment by a central procurement authority which 283W would inevitably base its specification on a generalised requirement rather than specific needs. The Government therefore have strong reservations about this proposal. In of these concerns we also do not favour the introduction of a separate initial acquisition grant pending the introduction of central procurement. We consider that MPs should continue to lease or purchase equipment which best meets their particular requirements from the aggregate OCA. Subject to the views of the House, however, the Government would be content for an invitation to he extended to the Information Committee of the House to consider the TSRB's proposals on equipment provision in the light of planned progress on the study of networking in the House.

The final fundamental issue is the proposal to create a separate Personnel Office. The Government appreciate the reasons underlying the recommendation, but are conscious of the concern of many Members about possible external intervention in the relationships between themselves and their staff. Subject to the views of the House, therefore, the Government do not propose to pursue this proposal.

Against this background, the Government consider that the most sensible course is to retain the OCA as a single sum but increase the maximum level. We accept that there is a case for increasing provision for support staff but taking account of both the TSRB's findings and the public expenditure implications and wider economic considerations we do not believe an increase as high as the TSRB recommends would be appropriate. The Government propose, therefore, that the OCA should he increased to provide for a maximum additional one quarter of a staff member, or equivalent expenditure, per Member. We also accept the TSRB's proposal that provision of £4,000 should be provided for general office expenses, but as part of the aggregate OCA rat her than as a separate allowance as the TSRB suggests.

Taken together the Government's proposals would increase the maximum OCA from £28,986 in 1991–92 to £33,190 in 1992–93. This represents a 9.8 per cent. increase, to provide for additional support from members, in addition to a 4.25 per cent. increase from 1 April in line with the existing uprating formula.

Finally, the Government note that at present an MP who joins or leaves the House part way through a year is entitled to claim against the full year's OCA. The TSRB addressed this point in the run-up to the election, but made no longer-term recommendation. The Government propose that from 1 April 1993 eligibility to the OCA will be calculated on a quarterly basis.

Overall, the Government believe this new higher level of OCA, while less than the TSRB recommended, provides a substantial increase which represents a fair balance between the taxpayers' interests and the needs of MPs for sufficient support to enable them to carry out adequately their duties to their constituents. It also provides MPs with continued flexibility in the ways they organise staff and equipment support to meet best their individual requirements.