MPs are facing a backlash over plans to hike their expenses as it emerged warnings from ministers have been ignored.
The Chief Secretary to the Treasury voiced concerns at spiralling spending on politicians and their staff last year.
But the Commons committee that oversees the Independent Parliamentary Standards Authority (Ipsa) still signed off sharp increases in costs.
Ipsa is now poised to go ahead with further boosts, including funding Greater London MPs to rent properties in Westminster even though they live within commuting distance.
In a letter sent in March, Darren Jones – then Rachel Reeves‘ deputy – told the Speaker’s Committee for Ipsa that the government faced a ‘fiscal challenge’.
‘HMT would seek to reduce the 10 per cent increase in MPs staff costs, noting that the assumed 5 per cent uplift for MPs’ staff is significantly higher than the affordability figures put forward by the government to Pay Review Bodies to consider for public sector workforces in 25-26,’ he wrote.
MPs are facing a backlash over plans to hike their expenses as it emerged warnings from ministers have been ignored (file picture of the House of Commons)
In a letter slipped out in April, Darren Jones – then Rachel Reeves’ deputy – told the Speaker’s Committee for Ipsa that the government faced a ‘fiscal challenge’
‘No additional funding will be made available for pay awards to central government departments in 2025-26, meaning that Ipsa would be expected to absorb any additional pay costs if they were a central government department.’
Mr Jones went on: ‘HMT would seek to reduce the 7 per cent increase in MPs accommodation & office costs and 17 per cent increase in MPs uncapped budgets (eg travel and subsistence), noting that this is higher than any funding provided to central government departments to cover increases in BAU office costs…
‘HMT would not fund the requested £2.7million additional support funding that fall outside or exceed a particular budget…
‘In line with Treasury guidelines, central government departments cannot request additional funding for contingency spend, and instead would be expected to stagger funding across the year to absorb any shock.’
Ipsa’s estimate for the cost of MPs pay, staffing, business costs and expenses in 2025-26 is £268.5million. That compared to £247.9million in 2024-25, although the final figure has still not been confirmed as the body has yet to publish its annual accounts.
A Scipsa spokesman said it had ‘regard’ to the Treasury’s view but was not ‘bound’ by it, and the plans were signed off.
Under existing rules, MPs who live in outer London are not eligible to claim up to £30,000 a year for renting a flat or staying at hotels close to the Commons.
Instead they receive a £6,570 London area living payment.
However, a consultation recently run by Ipsa has proposed allowing them to choose whether to receive the accommodation expenses of the LALP.
It said many were reporting ‘difficulties’ due to ‘long hours in Westminster, combined with long off-peak journeys back home’.
MPs who could benefit include Lib Dem deputy leader Daisy Cooper, whose St Albans seat in Hertfordshire is is 29 minutes from St Pancras.
It is understood no final decision has been taken by Ipsa’s board on whether to go ahead with the change.
The watchdog has also been consulting on a new more ‘flexible’ arrangement for setting MP pay, after implementing an ‘interim’ 2.8 per cent increase last Spring. Previously the rises were linked to average increases for the public sector.
Sources at the independent body stressed that it operates ‘differently’ from government departments and could not ‘absorb’ costs in the same way. They argued that the Treasury ‘recognised’ that difference.
An Ipsa spokeswoman said: ‘Ipsa ensures MPs can fulfil their parliamentary duties by providing strict budgets for essential costs, such as running an office, staffing, and supporting work across Westminster and constituencies.
‘This approach helps anyone become an MP, regardless of their personal finances. To promote transparency, Ipsa publishes details of funding provided to MPs.
The Chief Secretary to the Treasury voiced alarm at spiralling spending on politicians and their staff last year
‘Ipsa is accountable to Parliament through the Speaker’s Committee for IPSA which reviews and scrutinises our budgets.’
A spokeswoman for SCIPSA said: ‘The Committee carefully considered the Chief Secretary’s letter alongside Ipsa’s evidence before approving the estimate.
‘As Ipsa is an independent body and not a government department, the Committee had regard to the Chief Secretary’s observations but was not bound to follow what may be required of a central government department.
‘Based on the evidence provided, the Committee concluded that the resources requested were appropriate and consistent with the efficient and cost-effective discharge of Ipsa’s functions.’
But John O’Connell, chief executive of the TaxPayers’ Alliance, said the growth in expenses was ‘outrageous’.
‘Brits up and down the country face increasingly difficult commutes driven by high petrol prices, industrial action and the housing crisis, yet IPSA is proposing that MPs within commuting distance of their office get handed a central London pied a terre paid for my taxpayers,’ he said.
‘MPs should get together and make clear they will block this mad idea.’