SP Paper 780 (Web)
Contents
Remit
Report
The Bill
Summary of written evidence
Conclusion
Annexe A
Remit and membership
Remit:
1. The remit of the Finance Committee is to consider and report on-
(a) any report or other document laid before the Parliament by members of the Scottish Government containing proposals for, or budgets of, public expenditure or proposals for the making of a tax-varying resolution, taking into account any report or recommendations concerning such documents made to them by any other committee with power to consider such documents or any part of them;
(b) any report made by a committee setting out proposals concerning public expenditure;
(c) Budget Bills; and
(d) any other matter relating to or affecting the expenditure of the Scottish Administration or other expenditure payable out of the Scottish Consolidated Fund.
2. The Committee may also consider and, where it sees fit, report to the Parliament on the timetable for the Stages of Budget Bills and on the handling of financial business.
3. In these Rules, "public expenditure" means expenditure of the Scottish Administration, other expenditure payable out of the Scottish Consolidated Fund and any other expenditure met out of taxes, charges and other public revenue.
(Standing Orders of the Scottish Parliament, Rule 6.6)
Membership:
Kenneth Gibson (Convener)
John Mason (Deputy Convener)
Jackie Baillie
Richard Baker
Gavin Brown
Mark Mcdonald
Jean Urquhart
Report on the Financial Memorandum of the Interests of Members of the Scottish Parliament (Amendment) Bill
Introduction
1. The Interests of Members of the Scottish Parliament (Amendment) Bill1 (“the Bill”) was introduced in the Scottish Parliament on 27 May 2015 by Stewart Stevenson MSP, Convener of the Standards, Procedures and Public Appointments Committee.
2. The procedure for scrutiny of a Committee Bill is set out in Rule 9.15 of Standing Orders. Under that Rule, the Finance Committee is required to consider and report to the Parliament on the Financial Memorandum (FM). The Parliament can only consider, and decide whether to agree to, the general principles of the Bill once the Finance Committee (and, if applicable, the Delegated Powers and Law Reform Committee) has reported on the Bill.
3. At its meeting on 3 June 20152 the Finance Committee agreed to write to the Electoral Commission, the Commissioner for Ethical Standards in Public Life in Scotland (“the Commissioner”) and the Scottish Parliamentary Corporate Body seeking clarity on points around the estimated figures provided in the FM. The correspondence can be found in Annexe A of this report.
The Bill
4. The purpose of the Bill is to amend the Interests of Members of the Scottish Parliament Act 2006 (“the 2006 Act”) to—
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end the requirement for members to register certain donations with the Electoral Commission and the Register of Members’ Interests (“dual-reporting”)
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an increase in the range of sanctions available to the Parliament for dealing with any breaches of the 2006 Act
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lower the threshold for the registration of gifts
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an extension to the definition of the paid advocacy offence
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an extension to the length of time that members’ entries in the register of interests will be retained by the Parliament.
5. The FM sets out costs that are likely to arise in relation to the end of dual-reporting. The Bill’s proposals would charge the Commissioner with investigating complaints about alleged failures to register the donations and transactions under the Political Parties, Elections and Referendums Act 2000 (“PPERA”). Currently these investigations are undertaken by the Electoral Commission.
6. To determine the estimated costs of transferring these responsibilities, the FM uses information provided by the Commissioner “based on an analysis of the staff time involved in dealing with a number of complaints which have been investigated over the course of the current year.”
7. The FM sets out that the average cost per case of an Investigating Officer in the Commissioner’s office working on a complaint is £1,000. For more complex complaints, Investigating Officer costs of between £4,000 and £6,000 arise. The FM states that the Commissioner has “suggested that it would be reasonable to add on an approximate figure of £1,000 per investigation to cover his own time and that of the administrative staff in his office.”
8. To provide an estimate for a complex investigation, the FM takes the mid-point of the Investigating Officer costs giving a total staff cost of £6,000 per case. The FM states that the Commissioner “was unable to say whether these potential, additional costs could be absorbed within budgeted expenditure, as this would depend on the volume of complaints.”
9. To estimate the volume of complaints, the FM notes that the Electoral Commission “has indicated that on average it deals with around one case a year concerning MSPs who are alleged to have breached PPERA.” Taking the period of the last three years, the Electoral Commission has had four cases relating to MSPs. The FM states that two of these were closed without investigation. Of the other two cases that were investigated, one resulted in sanctions being imposed.
10. Under the 2006 Act, the Commissioner is required to investigate all admissible complaints that are made. Using the average number of complaints against MSPs received by the Electoral Commission, the FM estimates that the additional workload on the Commissioner’s office would be one case per year, leading to additional costs per year of £6,000.
Summary of written evidence
The Electoral Commission
11. The estimate of the volume of complaints in the FM is based on the number of cases of alleged breaches of PPERA by MSPs that the Electoral Commission has dealt with in the past 3 years. The Committee sought further information on whether the average number of PPERA cases had been the same over a longer period of time and, specifically, whether there has previously been any increase in the number of cases considered in the period around a Scottish General Election.
12. The Electoral Commission confirmed the number of cases involving MSPs had remained broadly the same since the sanctions regime was introduced in 2010 and provided detail on the number of cases per year since then. It also confirmed that while there was an increase in the number of cases considered by the Commission in 2011, from 0 to 3, none were “related to or arose as a result of the Scottish Parliamentary elections” held that year.
The Commissioner for Ethical Standards in Public Life in Scotland
13. The FM uses estimates, provided by the Commissioner, on the cost of investigating cases where MSPs are alleged to have breached PPERA. These are based on the Investigating Officer costs incurred from the most complex cases dealt with by the Commissioner at the present time. The Committee sought further information from the Commissioner on whether or not any benchmarking has been undertaken to compare the activities involved in his office investigating a complex case and the activities currently undertaken by the Electoral Commission when investigating alleged breaches of PPERA.
14. The Commissioner confirmed he had made contact with the Electoral Commission with a view to obtaining comparative information. The Commissioner was of the view that the area most likely to give rise to complaints would be around the failure to properly register donations and other transactions providing funding for political activities. His enquiries indicated that the Electoral Commission receives a small number of complaints of this nature, most of which were investigated without the need for interviews and if this position was to remain the same after the proposed amendments to the 2006 Act then it was likely that very little additional resource would be required to investigate complaints.
15. However, the Commissioner stresses the importance of recognising that the powers and procedures followed by the Electoral Commission are different from those which he is required to follow under the Scottish Parliamentary Standards Commissioner Act 2002, as amended. On this basis he considers it prudent to budget for some additional full investigations, at least in the initial period following the change. In the absence of any direct comparable costs with the Electoral Commission the Commissioner has based his estimate, as set out in the FM, on the historical costs of investigation of the more complex complaints that fall under his existing remit.
Scottish Parliamentary Corporate Body (SPCB)
16. The Committee wrote to the SPCB seeking its view on the estimated costs in the FM and the implications for the budget of the Commissioner for Ethical Standards. The SPCB note the estimated costs provided in the FM and that the anticipated additional cost for the Commissioner’s office is likely to be in the region of £6k. In light of the Commissioner’s work being demand led the SPCB concluded that it would not be possible to predict whether any additional costs could be absorbed within his annual approved budget.
17. The SPCB confirmed that in order to prevent its overall budget increasing it intends to initially invite the Commissioner to seek contingency funding at the end of a financial year based on the number of cases dealt with. This will allow statistics on the volume of complaints to be collected and information gathered to enable the SPCB to determine more accurately whether the Commissioner’s budget should be increased.
Conclusion
18. The Committee is content that the information in the Financial Memorandum is an accurate reflection of the costs that would arise from the Bill. The Committee welcomes the SPCB’s commitment to review the budget of the Commissioner for Ethical Standards in Public Life in Scotland once accurate information on the volume and complexity of cases which require to be investigated is available.
Annexe A
Written submission from the Commissioner for Ethical Standards in Public Life in Scotland dated 18 June 2015
Thank you for your letter of 5 June.
I can confirm that I made contact with the Electoral Commission with a view to obtaining comparative information before submitting estimates for the cost of investigating complaints which might be made in respect of the amended rules for registration of interests.
I considered that the area most likely to give rise to complaints, and therefore to additional investigative work, would be complaints about failure properly to register donations and other transactions providing funding for political activities. My enquiries disclosed that the Electoral Commission receives only a small number of complaints of this nature and that most of these are investigated without the need for interviews. Were that also to be the position here following the proposed amendments to the Members Interests Act, very little additional resource would be required to investigate complaints. However, it is important to recognise that the Electoral Commission’s powers and procedures are different from those which I am required to follow in terms of the Scottish Parliamentary Standards Commissioner Act 2002 as amended. For example, the Commission has power to deal with complaints which they regard as minor by issuing advice and guidance.
I therefore concluded, given the complexity of some of the amended rules, that it would be prudent to budget for some additional, full investigations, at least in the initial period following the change. In the absence of directly comparable information, I have based my estimate on the historical cost of investigating the more complex complaints which fall within my existing remit.
I hope this is helpful to the Committee in considering the Financial Memorandum.
Bill Thomson
Commissioner
Written submission from the SPCB dated 25 June 2015
Thank you for your letter of 5 June 2015 seeking the SPCB’s views on the Financial Memorandum for the above mentioned Bill.
We note that for the purposes of estimating costs that both the Electoral Commission and the Commissioner for Ethical Standards have been consulted and on the basis of the average number of complaints dealt with by the Commission and the average cost of investigating a complex complaint, it is anticipated that the additional cost for the Commissioner will be in the region of £6K.
As the Committee will be aware, the Commissioner’s work is demand led and it is not possible to predict whether he will be able to absorb any additional costs from his annual approved budget. To prevent the SPCB’s contingency funding at the end of a financial year based on the number of cases he has dealt with.
Once we have statistics on the volume of complaints, we will consider whether the Commissioner’s budget should be increased to include these additional costs.
Tricia Marwick
Written submission from The Electoral Commission dated 15 July 2015
Thank you for your letter dated 5 June 2015 regarding the average number of alleged breaches of PPERA by MSPs.
In our earlier comments we said that, on average, we have around one case a year concerning MSPs who are alleged to have breached PPERA. We advised that, over the last three years, (2011 to 2014) we had four potential cases. Two of these were closed without investigation and two went to investigation, with one of the latter proceeding to sanctioning.
We can confirm that the number of cases involving MSPs has remained broadly the same since the sanctions regime was introduced in 2010. The table below includes the number of cases per year.
Year |
2010
|
2011
|
2012
|
2013
|
2014
|
Cases |
0 |
3 |
1 |
0 |
0 |
There was an increase in the number of cases considered by the Commission on the period around the Scottish Parliamentary elections in 2011. However, the number of potential cases remained low and although potential cases arose in 2011, none were related to or arose as a result of the Scottish Parliamentary elections of that year.
I hope this letter is helpful. If you require any further information, please do not hesitate to contact Suzanne King in our public affairs team.
Andy O’Neill
Head of Office Scotland
Any links to external websites in this report were working correctly at the time of publication. However, the Scottish Parliament cannot accept responsibility for content on external websites.
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