Speaker’s Committee for IPSA
Oral evidence: IPSA’s Supplementary Estimate 2024-25
Wednesday 22 January 2025
Ordered by the House of Commons to be published on 22 January 2025.
Members present: Sir Lindsay Hoyle (Chair); Alberto Costa; Marie Goldman; Leigh Ingham; Gordon McKee; Charlotte Nichols; Jesse Norman; Lucy Powell.
Lay Members: Peter Blausten; Theresa Middleton CBE; Tina Fahm.
Questions 1-12
Witnesses
Richard Lloyd OBE, Chair, Independent Parliamentary Standards Authority; Ian Todd, Chief Executive, Independent Parliamentary Standards Authority.
Examination of witnesses
Witnesses: Richard Lloyd and Ian Todd.
Q1 Chair: Welcome to the meeting of the Speaker’s Committee for IPSA. We are here today to consider IPSA’s supplementary estimate 2024-25. Richard and Ian, could you introduce yourselves for the record?
Richard Lloyd: Thank you, Mr Speaker. I am Richard Lloyd, the chair of IPSA.
Ian Todd: Thank you, Mr Speaker. I am Ian Todd, the chief executive and accounting officer of IPSA.
Q2 Chair: Before we begin questioning, Richard, would you like to start by saying something about MPs’ budgets in the new financial year, and by summarising IPSA’s request for the supplementary estimate?
Richard Lloyd: Yes, please. Thank you, Mr Speaker, and welcome to the many new members of the Committee. I would especially like to thank Peter Blausten, who has been a consistent source of constructive challenge and advice over the past five years. He has been a great public servant, Mr Speaker, and he is demonstrating that again today by being here on his birthday, so I thank him.
As we all know, the main purpose for today’s session is to scrutinise the spending on last year’s general election. We all know that that was a once-in-a-generation change for this House. For IPSA, it was the largest turnover of MPs and staff in a single year since we were created 15 years ago: 350 MPs newly elected, 2,467 staff leaving, 2,378 staff joining, 572 properties to bring into the system, numerous individual and group training sessions delivered, and 17,700 phone calls received by IPSA, of which 90% were answered within 20 seconds.
I am especially proud of the way that everyone at IPSA has worked so hard to deliver the best possible service to departing, new and returning MPs and their staff. We have responded to last Parliament’s Administration Committee’s recommendations. Although we have not yet done a full evaluation of the election-related work we carried out last year, the feedback we have received so far has mostly been excellent.
As you know, we agreed last year with the then SCIPSA that rather than speculate about the timing or the outcome of the election, which could have been next week in theory, we would instead bring you a supplementary estimate with the actual spending figures on the election-related work once these were known. That is what we bring you today.
We also said last year, with the agreement of the Committee, that we would bring at the same time the expected spend to deliver the McCloud remedy. Members have until the end of this month—31 January—to make their McCloud choice, so there is still some uncertainty, but what we have presented is the best possible estimate, which is based on the Government Actuary’s Department projection, rather than our own.
Finally, we have also written to the Committee with our proposed budgets for MPs’ staff and offices for 2025-26. We have done this in the past, with your agreement, at the earliest possible moment, ahead of the process for the approval of our main estimate, because to wait until March would leave Members and staff uncertain about their main budget lines and unable to plan for the new financial year until it has almost started. We have based both budget proposals on evidence from, obviously, MPs, their staff, from market data, and in the context of the statutory duty given to us by you, to ensure this is done efficiently and cost-effectively.
Of course, there are many views about the size of these budgets, both in the context of pressures, for example of casework, the need for safe and secure offices, and the wider economic and public sector spending context. IPSA has a long-standing principle, as you know, that our spending on MPs and their staff should reflect the experience as far as possible of their constituents, and clearly a significant part of that day-to-day experience is decided by Parliament, not by IPSA.
We have therefore proposed an uplift to the overall budget envelope for staff within which we would apply an automatic uplift to staff salaries of 3% from 1 April 2025. MPs are free to opt out of that arrangement and we expect that more may do so this year, as MPs work through their new staffing arrangements and the salaries they have offered as the employer to new starters are assessed in the last few months.
For office budgets, we have proposed an uplift that recognises the variation in the pricing of leases in different parts of the country, the pressures in some markets on costs, and the different approaches taken by MPs who may, in some cases, have felt the need to be visible, or to have higher-standard offices than their predecessors, some of whom kept away from the high street, for example, for understandable security or quality reasons.
If the Committee agrees today to us communicating these provisional budget figures, we will do so to every MP and office manager this week—as I said, so that they can begin planning for the new year. We will of course return to this Committee with a full estimate and our plan alongside it, for you to consider in March; so until the full estimate process is concluded, these figures will remain provisional and subject to the will of the House. We are happy to take questions. Thank you, Mr Speaker.
Chair: Thank you, Richard. You think this is the largest since you started, in turnover; it is the largest ever in the history of Parliament, because Members never had as many staff as where we are now. So thank you for what you did, it was appreciated, and there has been very good feedback this time. Let’s start with some questions.
Q3 Theresa Middleton: Hello, Richard and Ian. There is £53 million for the general election costs in your supplementary estimate, and you have touched in your opening remarks, Richard, on some of the scale of the challenge. From what you said, it sounds as if it had all gone well and you had had positive feedback. Could you tell us a bit more about some of the detail of that, in terms of how it went, and especially what maybe were the things that didn’t go as well as you had hoped, if there were any, and what you might learn from that?
Richard Lloyd: We have worked incredibly hard this last year for departing MPs, to look after people who, in some cases, were in quite difficult circumstances, to look after people in a humane way, and to give more time—an appropriate amount of time—for departing MPs to wind up their offices and to, again in a sensitive way, make their staff redundant. The big difference has been in our approach and making sure that we have treated people as sensitively and appropriately as possible, and giving more time, which was something that the Administration Committee recommended in the previous Parliament.
The other thing we have done differently this year is to repurpose every member of IPSA staff to work on the general election. We have kept in-house that service delivery, rather than bring in temporary staff who did not know the MPs, the system and the staff. Throughout that period we had very high levels of staff engagement. We had to put down some of the things that we were hoping to do over the course of last year, but I think it was the right decision. Again, that meant the advice that MPs were given, whether departing, returning or new, was of much higher quality.
We worked very closely with the House staff as well—the different teams that provide digital services, security and so on—to try and make the very large volume of information that new MPs are given as digestible and doable as possible. There is a whole range of ways we have done it differently this time. We will do a formal evaluation. Given the surprisingly large, once-in-a-generation numbers, as Mr Speaker said, particularly because of the increased staff budgets that we have brought in over the last five years, I think our ability to absorb that volume and deal with so many people in quite difficult circumstances at times has been extremely good. As to the things we could have done better, I will hand over to Ian.
Ian Todd: I think it is important to reflect that the tone and the approach has probably been the most significant change. It is important to reiterate the thanks to our team, who have worked in a very different way. They have been repurposed doing activities that are not their normal day job. The way they have responded to that has been truly fantastic. It is the first time that IPSA has been able to deliver a general election without requiring additional human resource from outside. Because they have that skillset and that understanding of the context in which we operate, it meant that they were better informed and able to deliver.
For many of them, it meant additional travel to London. It meant staying overnight in London to be able to support things like the new Members’ reception area, and staying away from home. I am very grateful to them for that and, as Richard said, also to the House authorities, who I think we have worked much more closely with this time than we have ever done previously. And I would draw out—but it is not limited to these—Members’ HR, the Parliamentary Digital Service and the Members’ security support team, all of whom we collaborated with.
I think we were much better prepared and able to hit the ground running to make sure we were able to deliver things for new Members in particular. And we offered a much more differentiated product for new, departing and returning Members, with different approaches to reflect the different circumstances.
I will just give you some more statistics. For example, we were able to issue payment cards to all new Members within two weeks of the election. A third of new Members opted for salary advances to reflect the fact that they would not have had any income during the period prior to the election, and we were able to provide those within 10 days of the election taking place. As Richard said, 600 new properties were registered and 2,500 new staff were added to the payroll. The important thing to remember from IPSA’s perspective is that although there are only 650 Members at any given time, effectively, for a four-month period after the election, there are 1,000, because we have the 350 departing Members who we still have to deal with, as well as the 350 new Members.
Of those departing, we met 348 of the 350 face to face or online, based on their preference. We were able to offer a much more sensitive approach because we improved or enhanced the winding-up period from two months to four months in accordance with some of the recommendations of the Administration Committee, which meant we were able to take a bit more time and act more sensitively.
Three hundred and fifty properties have now been taken off the books, and 2,400 MPs’ staff have now left the books. We did not forget about returning Members. Those with constituencies where there were significant boundary changes had access to additional funding, similar to office start-up costs that new Members are entitled to, to recognise the cost of setting up constituency offices for the first time. Also, reflecting feedback we have had from Mr Speaker and others, we now have a physical presence on the parliamentary estate on a weekly basis in the Members’ information hub.
Eighteen thousand phone calls were received up until the end of December in the last financial year, so during nine months out of 12. That is 52% more than the entire volume from the previous year, yet we maintained nearly 90% performance in terms of answering the phone within 20 seconds. In fact, there are only three sitting days since the election when we have not met that SLA. There were nearly 18,000 emails in the same period—the first nine months of the financial year—which is 32% more than in the entire previous year. So the volumes are very significant, but also our performance against them has improved on the previous year.
In terms of the challenges, there is more work to do with the House authorities and others, particularly around new Members. There is a lot of information that we and others need to impart to them as they become new Members, and we need to work out what they need to know on day one and in week one and month one. Some of the feedback has been that the volume of information, although it was insightful, well delivered and done in the right way, was just too much for anybody to be able to absorb, to take in, and to meaningfully use. That in part has generated the higher call volumes.
We do run specific induction sessions. I have to say the take-up of those has been relatively poor, because of the commitments that Members have. We have instances where people sign up to meetings but then at short notice are not able to attend because they have other commitments. We need to find a better way of doing that training, because it will enable people to enhance their understanding of the systems, which will make this more efficient.
Again, reflecting points that Mr Speaker has raised in the past, we offered a new accommodation opportunity to a number of new Members; we sought to help them to find new accommodation. It worked in some instances, but wasn’t as universally successful as we would like, partly because the election arrived earlier than we had expected. We need to review that and make sure that we can offer a consistent product.
Q4 Gordon McKee: Thank you, Richard and Ian, for coming to the Committee. First, I want to express my thanks to your team, who have been extremely helpful. I have been a regular user of the phone line, and it is always answered very quickly, so I am very grateful for that. Thank you.
The question I want to ask—you have touched on this already, Richard—is about the main estimates and the fact that IPSA had to go to the Treasury contingency fund because there was not a general election estimate within those. Could you expand on why you did not request specific election funding as part of your main estimates for ’24-25?
Richard Lloyd: Thank you, Gordon. Members of IPSA staff will be watching, I am sure, so they will be grateful to hear your comments.
We did think very hard about this last year. As I said earlier, there was an issue about uncertainty. There always is, of course, about timing. There was also a great deal of speculation about the consequences of the election. If you remember, the environment was particularly difficult for some MPs at the time—the media environment and some of the hostility that Members were experiencing. Of course, we could have made a rough estimate, but it would have been exactly that. And I think, given what has happened, we would have been back here anyway, because I don’t think we, or any of the informed observers, would have estimated that 350 new MPs would be coming into the House. So in discussion with the then SCIPSA, we suggested that it would be more sensitive to the external environment, and just better, to bring the actual spend to you once it was known, and this is the earliest point at which that has been possible.
One of the things we will do, though, in planning—we need to start planning for the next election now and we will think about whether it might have been possible to bring at least some elements of that into our main estimate last year. Had we made any estimate, I suspect that it would have been read as a prediction by IPSA of how many MPs were going to lose their seats, and I think that at the time, that would have been the wrong thing to do. But we will do a lessons learned, and whether there is a better way of doing this, of course we will do that.
Q5 Charlotte Nichols: Thank you, Ian and Richard, for coming along today. In some of your previous answers, you have touched on the unpredictability of putting together an estimate with a lot of what happens during the election, but I want to talk a bit about the tax on winding-up payments, as that strikes me as one area where it could have been reasonably predicted that tax would be due. As Ian said, a system was in place prior to the 2024 election, although the value of it has changed following the recommendations of the Administration Committee.
HMRC confirmed that tax is due on winding-up payments. That meant a total cost of £6 million more than was estimated has been sought by IPSA. Did IPSA seek professional advice on whether the payments would be taxed when preparing the budget for the general election? What led to the decision to exclude these taxes from the budget ?
Ian Todd: It is important to reflect that our payroll team within IPSA are members of the Chartered Institute of Payroll Professionals, so some of that professional advice does come from within. But this is specifically a point in relation to HMRC.
The complicating factor at this election, compared with previous elections, was the decision to extend the winding-up period from two months to four months, and understanding the implications of that, the loss-of-office payments and how they worked in combination with each other to ensure that the tax-free elements of termination payments are treated the same way for Members of Parliament as they would be for anybody else facing a redundancy-type situation.
We did take advice from HMRC on that point. It has been extremely helpful—this is not a criticism of HMRC—but in this particular respect, it was not able to give us that advice until after the budget had been set, hence the change in the figures after the event.
Q6 Charlotte Nichols: Could you confirm that the tax was not due on winding-up payments in 2019?
Ian Todd: There is a change to the way that the tax has been treated, but that is, as I say, as a direct result of the fact that the winding-up payment is now four months rather than two months.
Q7 Jesse Norman: I don’t really understand this. So is the winding-up payment, as you see it, a redundancy payment or not? If it is, why would it not fall under the normal redundancy rules—i.e. the £30,000 threshold, with no tax up to that or NICs, and then after—and if it is not, why has it developed as it has done?
Ian Todd: I am not a tax expert, but the winding-up payment is not quite the same. It is a recognition of the fact that there is still work to be done, but that as a former Member at that point, we are unable to pay salary to somebody beyond the point that they lose their seat. Loss-of-office payment is the closest thing akin to redundancy. Technically, because you are office-holders, neither of them relate in an identical way to those with normal employment, but the advice we have had is that that is how they should be treated—that is, from HMRC.
Q8 Jesse Norman: It is a way of creating that effect for an office-holder rather than an employee, with ideally the same tax effect. You just did not foresee that the tax cost would be as high as it was.
Ian Todd: Yes, it is designed to ensure that the payments that you receive as office-holders are treated in a fair and equitable way—essentially the same way that an employee would be treated in similar circumstances. But because the amounts and the balance between the two changed, that led to HMRC’s advice.
Q9 Marie Goldman: Thank you for coming to the Committee today and for the reports. As a new Member who has experience, and my staff have experience, of contacting IPSA quite a lot, while I am not saying that there is not room for improvement, especially in some of the systems, we have been very grateful for the support that we have received. I would like to pass that on to the staff as well.
There is a period where IPSA has had to support outgoing MPs at the same time as supporting new MPs. These have been described in the paper as “parallel running costs”. It is not just about paying MPs’ wages; it is also about supporting staff, winding down offices and all that kind of stuff.
The amount per new MP was £16,700 more than was expected, which in total was £5.9 million higher than expected. It is in the paper as being down to new MPs hiring staff more quickly and at higher rates than were expected. Why do you think that happened?
Richard Lloyd: First of all, thank you for the feedback. By the way, many of the things we were planning to do last year to improve the system and the approach that IPSA takes had to be put on ice. They are back fully on-stream from now on. I hope you will be even more pleased with how we operate in the future.
Apart from the pure quantum of the numbers, what we could not predict was how new MPs might operate. For example, advice has been given, I think, in some parties to take recruitment slowly. In many cases, we have heard from new Members about the pressure they have felt to respond to constituents quickly. That is completely understandable.
The spending rate of MPs in that new context and from that new cohort is obviously not something we have experienced before—and we have data going back over the last 15 years. We are now clearer about the spending patterns, the likely recruitment patterns and so on. Although even that is still an emerging picture because many MPs—new MPs—have hired staff on a temporary basis, and that has not settled down yet either.
Similar to the estimate of meeting the needs of incoming MPs, there are the staff to consider, the offices and so on. Those parallel running costs, to enable former MPs to wind up their affairs effectively and fairly alongside the new running costs for new MPs, have been beyond what we expected. It is as simple as that.
That said, for future years, and I hope in time for March, we now have a better handle on the data and on the patterns of spending, and we will be able to forecast much more accurately what the budgets will need to be for the future. This has been a learning six months for everyone.
Ian Todd: The only thing I would add is that the average redundancy payments for members of staff and for departing Members were also higher than we had anticipated. That obviously depends on the length of employment. Because the turnover was so high, there were some much longer-standing Members of Parliament who had longer-standing members of staff who had to leave their employ, and that led to a higher figure as well.
Q10 Marie Goldman: Of course, you could not predict, and nor should you have predicted, which of those Members would leave.
Ian Todd: No, we could not predict which—absolutely not.
Q11 Tina Fahm: Thank you very much to you both for the insight regarding IPSA’s role in the election. For a new member to the Committee, it has been very helpful. I must say, I am impressed, but then I am not the person to be impressed; it is the Members of Parliament that IPSA serves.
You may have touched on this already—and notwithstanding that you have mentioned that an evaluation will follow and colleagues have asked about lessons learned—but I am interested in what lessons have been learned regarding financial planning from this most recent election, and what might be done differently for the next?
Richard Lloyd: Thanks, Tina, and welcome to you too. Some of the policy changes we made were again proposed by the Administration Committee—this follows on slightly from my previous answer—and, in particular, our decision to extend the winding-up period. That was based on clear evidence from previous elections that two months was just not sufficient to wind up a constituency office and to close down those affairs. But there have been different responses to the availability of that extra time, and we need to work through, for example, whether we could have given clearer guidance for the expectations of the stages and processes that MPs needed to go through within that four-month period. There were, for example, leases on which notice needed to be given, which could have been given sooner.
I think that is probably the key area. Again, it is about the behavioural response to a change of rules or a change of policy that we had some expectations around and where those have not turned out as planned, and we will need to make adjustments next time.
Q12 Peter Blausten: Ian, Richard, you previously explained at another meeting why you understandably did not want to include a provision for the McCloud remedy in the main estimates, and you sensibly made an estimate yourselves of up to £3 million as a provision. We now understand that it is more than double that—that is not down to you, but the Government Actuary’s Department has given that figure. Can you just explain the interaction you had with the Government Actuary’s Department in coming up with your figure, and why you think the difference is so great?
Richard Lloyd: My short answer is that the GAD estimate has only emerged fairly recently. Had we had that number earlier, that would have become our estimate. We have relied on the parliamentary pension fund secretariat as well for its insight into the likely take-up of different choices within the McCloud remedy. Having had that number from the GAD, and it is authoritative, I still do not think it is likely that the choices made will arrive at an out-turn close to that number. Having been given it by GAD, the responsible thing for us to do—and what the accounting rules that we operate within require us to do—is to go with that number. We will not know the out-turn for a while yet, as Members are still making choices.
Ian Todd: As you rightly alluded to, Peter, this is a provision—this is not money that we are seeking now or that we intend to spend during the course of this financial year. This is simply a marker through the estimate process, as we are required to do, to effectively inform Treasury of the decisions that are being made now which have a financial consequence and a commitment further down the line. The actual spend of that money will come further down the line. As Richard said, it is likely to be much less than the GAD estimate, which is a worst-case scenario based on the decisions that individual Members make.
Chair: Thank you. If there are no further questions, I thank you both, Ian and Richard.