23 July 2010

Sir Ian Kennedy gave a frank account of IPSA's recent challenges to the Institute for Government.

IPSA has had the most controversial first few months of any public body since, say, the Child Support Agency. So Sir Ian Kennedy, its chairman, was inevitably on the defensive when he spoke at the Institute for Government about IPSA’s record and prospects.

It was unquestionably the least heated and most reasoned discussion of the issues he has recently faced, in marked contrast to the often boorish meetings he has had with MPs at Westminster.

Sir Ian had three central arguments. First, IPSA has achieved a remarkable amount in a very short period, setting up a new organisation and systems, paying MPs their salaries and expenses.

Second, the inevitable early problems have been much smaller than the frequently aired myths.

And, third, that the underlying framework, based on transparency and the requirement for detailed expenses for all bills, is correct.

This is essentially the “teething problems” thesis: the belief that all  new organisations go through a rough phase, and that adjustments of working practices and better communications and dialogue with MPs  will, in time, reduce, if not end, controversies and produce generally accepted arrangements. The vilification of IPSA by MPs has not only been way over the top, but also myopic in view of the expenses row of last year.

Yet the MPs’ complaints cannot be brushed aside. Some are legitimate.  Even if many recent problems are both exaggerated and possibly temporary, the system is excessively time consuming for MPs and their staff. Of course, as Sir Ian  argued, one of MPs’ duties is to spend time being publicly accountable for the taxpayers’ money they receive. But it could, and should be simpler.

Direct payments of some bills, as is now being considered, will help. Many other organisations have simpler systems, such as credit cards, against which expenses can later be assessed.

Many MPs now hanker after the system approved earlier this week in the Lords whereby peers receive a per day payment of an allowance ( not taxed and not requiring receipts) plus separate payments for travel. This involves some rough justice, being very generous to those living in London but tough on those living further away. Sir Ian firmly ruled out any return to an allowances system from reimbursable expenses, in part on the grounds of public acceptability.

Moreover,  the tighter system of second home payments may change the way Parliament operates- changing the working hours and making MPs more reluctant to come to London. Provisions for hotel payments if the House sits late and the last train has gone were found wanting earlier this month.

Sir Ian was far too cavalier in this comment that “when we drew up the scheme, we were not able to predict a coalition Government, an emergency Finance Bill and efforts by the Opposition to keep the House up till all hours, all in July when the less expensive hotels in London are full of tourists”.

The existence of the coalition is irrelevant. The Commons often sits very late in June and July during the tourist season, as any check on passing sittings would have shown. The promised review this autumn needs to consider the impact of the rules on how Parliament functions.

The real problem is deeper. Sir Ian, with long experience of medical ethics, argued that: “Regulators perform best, ie get the best results for the regulated and the wider world, if they regulate with the understanding of the regulated. The greater ambition, though it takes longer to achieve, is to regulate with the consent of the regulated”.

At present, there is neither understanding nor consent. MPs have quickly forgotten that it was their own abuses that led to the creation of IPSA - and, as Sir Ian pointed out, the I stands for Independent. It is accountable not just to MPs but also to the public. Yet, unlike other regulators, its budget is overseen by the very people it regulates, and they are not shy about airing their own objections.

Many MPs think that IPSA cannot be saved. It has few friends at Westminster, including at the top of the Government. Sir Ian may be correct that the criticisms are over-blown and none of the alternatives yet proposed is convincing. That will not be enough. IPSA needs radically to re-think its approach if it is to survive.


The behaviour of some MPs in behaving badly to the staff of IPSA is entirely wrong and has, I suspect, distracted attention from fundamental criticisms that can be made about IPSA. A sharp distinction needs to be drawn between abuse and analysis - and the entirely legitimate tactic of making an organisation that needs reform look ridiculous.
One fundamental issue is the role of rules. Sir Ian Kennedy thinks rules have to be adhered to rigidly. Aristotle maintained that (outside the natural sciences and mathematics) rules can only operate os epi to polu - generally and for the most part. Aristotle was followed by St Ignatius of Loyola in establishing and regulating the Society of Jesus which has survived numerous challenges over 450 years including an actual Papal suppression.

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