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Short Money Reform

Statement made on 21 March 2016

Statement UIN HCWS634


I wish to update the House on the Government’s proposed reforms to Short money.

The Autumn Statement in November outlined proposals to reform Short money and last month, the Cabinet Office published a request for views, which was followed by further constructive discussions with political parties.

These discussions have now concluded and the Government is bringing forward a package of proposals to reform Short money and Representative money, recognising the importance of an effective opposition to hold the government to account. The changes will deliver an estimated cumulative £3.6 million saving to taxpayer-funded Short money over this Parliament and increase transparency and accountability over how taxpayers’ money is spent.

A motion delivering these reforms will be tabled later today for consideration by the House on Wednesday 23 March. In summary, the motion will propose the following changes:

  1. The annual indexation would be linked to CPI rather than RPI.
  2. The CPI change would mean that Short money figures for the 2016-17 financial year would be based on the uprating of the 2015-16 figures by reference to CPI, rather than RPI.
  3. Transparency requirements would be introduced to safeguard the spending of taxpayers’ money. It would provide for a regime of publishing audited accounts, with a breakdown of Short money spending, including transparency over senior staff salaries.
  4. The Members Estimates Committee would determine the detail of the auditing and transparency regime; the reporting should commence for the 2016-17 financial year.
  5. The transparency regime would reflect the need for enhanced scrutiny of HM Opposition.
  6. The Members Estimates Committee would be tasked to consider the effect of planned reduction in the size of the House of Commons on the Short money formula from 2020-21 onwards, recognising the goal of reducing the cost of politics; it would report by end of the 2016-2017 session.
  7. A minimum funding floor would be introduced for the smallest parties (parties up to and including 5 MPs). This would be 50% of the IPSA staff allowance for one non-London area MP.
  8. A maximum funding ceiling would be introduced for the smallest parties (parties up to and including 5 MPs). This would be 150% of the IPSA staff allowance for one non-London area MP.
  9. The resolution would come into effect from the start of 2016-17 financial year.
  10. The Representative money scheme would be amended to mirror the changes to Short money.

In addition, Policy Development Grants will remain frozen, so they will fall in real terms in each year over this Parliament.

These balanced and reasonable proposals will deliver a significant saving of taxpayers’ money, reducing expenditure by 10.6% compared to forecast levels, and will further extend the Government’s ongoing transparency agenda.

Statement from

Cabinet Office