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Watchdog makes sweeping changes ahead of David Cameron's 1 April deadline to 'change or be changed'
MPs' expenses are to be increased by up to £4m this year under sweeping changes announced before the 1 April deadline set by the prime minister for the expenses watchdog to "change or be changed".
The Independent Parliamentary Standards Authority (Ipsa) has made significant revisions that will mean MPs with families are able to claim more for their second homes and children's travel.
Staff budgets will be increased by nearly £5,000 and 31 more MPs who live on the outskirts of London can claim rent for a second home.
MPs will also be allowed to use dedicated credit cards to pay for more of their expenses, and Ipsa will pay their biggest bills upfront to prevent financial hardship and stop thousands of pounds flowing through their personal accounts. Senior Ipsa officials acknowledged that the extra costs would be between £3m and £4m if all eligible MPs claim.
David Cameron accused Ipsa in December of being "anti-family" because of strict restrictions on additional payments for MPs to rent flats to accommodate their children.
This only paid out for children up to the age of five, forcing some MPs to live away from their families during the week but it will now reimburse for those aged up to 16 or 18 if in full-time education. Cameron said: "There needs to be a better system in place by April or there will be change – that is, Ipsa changes or it will change."
Sir Ian Kennedy, the chair of Ipsa, said: "We didn't get everything right the first time. That's not surprising given the speed at which we set it up. In a sense we had to pilot it in real time."
He said they had rejected representations from MPs to be allowed to claim mortgage on their second homes again – calling it a "toxic inheritance" of the old system – or those who wanted to be able to travel first class. He said Ipsa had already saved £18m in costs, despite criticisms that it has cost more than £6m to administer in its first year.
Senior Commons sources suggested that they expect the proposals to be enough to satisfy most MPs' complaints but some of the most vocal opponents of the scheme said that they would be pushing for the government to honour a motion passed in December to schedule time to reform Ipsa because it had not cut costs.
Adam Afriyie, the Conservative MP for Windsor, said: "In times of austerity, Ipsa is burning taxpayers' money hand over fist – they must be stopped without delay."
Sir George Young, the leader of the house said he welcomed moves to help MPs become more family friendly and cost effective. "I agree that there is more that can be done to make the scheme simpler and less bureaucratic, while maintaining the transparency and independence that the public rightly demand."
