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MPs' Employer Liability Insurance and staff pension
FOI016
Disclosure Date:26 May 2010
Categories: MPs' PAY AND PENSIONS
Exemptions Applied: None
Request

As a member of the Unite Parliamentary Staff Branch, I have been approached by a number of now 'former MPs' and current candidates, about the MPs Employer Liability Insurance.

I understand that this will no longer be paid from central funds, though it will be paid for a further 6 months.

What 'pot of money', allowance, or admin expenditure will this come out of?

  1. Who advised IPSA that Pensions should now be included in the Budget, what were the comparators and evidence? Where any people interviewed and asked their views from the House of Commons Resources Department, MPs, MPs Staff or the Private Sector and Outside Bodies?
  2. I would also like to know where the reasoning and evidence came from for expenditure such as reception services, cleaning and translation had previously been paid out of staffing (they had in fact been paid from Office Costs Allowance and its successor). Who advised IPSA that this was the case? Was IPSA advised this was in a small number of cases or came out of every MPs staffing budget?

Please now consider these two points above a Freedom of Information Request

Response

The information you requested is provided below.

Employer’s Liability Insurance

No decision has been taken on the future mechanism for funding MPs' Employers' Liability Insurance. Given the House of Commons decision to continue its existing contract for six months, all MPs currently have such insurance and therefore IPSA has not yet had to take a decision on this matter. However, it is clear that it is a legal requirement for MPs to have such insurance, and if the House of Commons should cease funding it after this six month period, IPSA would take on the funding of it.

That funding might, as now, come from a central contract for all MPs negotiated by IPSA, or IPSA might provide MPs with expenses to secure their own insurance policies on the open market. The decision between these two options will be taken on the basis of which is more practicable and which offers better value for money for the taxpayer.

We have attempted to cater for all of these possible scenarios in the expenses scheme, at the paragraphs set out below (which can be found in the "miscellaneous expenses" section of the rules on our website, www.parliamentarystandards.org.uk):

12.11. In addition to any insurance which is payable under Parts 5 and 9 of this
Scheme, MPs may claim in respect of premium payments for the following types
of insurance:
(a) Employer’s Liability Insurance, up to a limit of £10,000,000;
(b) Public Liability Insurance, up to a limit of £5,000,000;
(c) Travel Insurance, to cover travel under paragraph 7.2 (e).

12.12 No claim may be made under paragraph 12.11 if the MP is otherwise
provided with the type of insurance in question by the House of Commons or by
IPSA.

If MPs are required to secure their own policies, the expenditure will not be deducted
from any of their existing budgets, and IPSA would make separate funds available.

Staff pensions

You asked why pensions were to be included in the staffing budget for MPs. The answer is simply that employer contributions to pensions are part of the cost of employing staff. The costs were not included in details of published expenditure under the old rules, and as a result the published figures did not reflect the full cost of MPs’ staffing. IPSA is committed to the highest standards of transparency, and has therefore decided to include employer contributions to pensions as part of staffing costs.

This was not a decision based on comparators, but on the principle set about above.

Our intention to include pension contributions in MPs' staffing budgets was set out at paragraph 12.14 of our consultation paper, "MPs' Expenses: a consultation", which was published on 7 January. We received over 2,700 responses to that consultation, including from MPs, MPs' staff, other agencies and (mostly) members of the public. The House of Commons Resources Department did not submit a response but was aware of the proposed approach.

Following that consultation, we then calculated the staffing budget to include sufficient funds for the employment of 3.5 members of staff, including employer contributions to pensions. The eventual total of £109,548 is not directly comparable to the allowance available under the previous system (which was £103,812) as that allowance also made provision for a series of other costs that will not be met from IPSA's staffing budget including:

  • professional advice,
  • recruitment,
  • training for MPs and their staff,
  • interpretation and translation services,
  • cleaning and janitorial services, and
  • maintenance of hardware and software and equipment.

Other costs paid out of the staffing allowance under the previous system

You have also asked for evidence that the above costs were paid out of the staffing allowance. The July 2009 edition of the Green Book is entirely clear that all of the above could be claimed from the staffing allowance; this can be seen at section 2.3.3.2, which is on page 29. If you do not have a hard copy of the Green Book, it can be found online at the foot of http://www.parliament.uk/mps-lords-and-offices/membersallowances/house-of-commons/house-of-commons-scheme-guides/hocallowances07/.