The next expenses scandal?

“Everyone knows that election expenses are a work of fiction...you can drive a coach and horses through the loopholes.” That was the reported reaction of an unnamed Conservative MP to the news that police forces are now investigating the election expenses of up to 30 MPs. It’s a sentiment we’ve heard before. Back in 2009 when the expenses scandal hit, MPs were falling over themselves to point out that “everyone was at it” and that “everything was within the rules”. As reports of breaches of election expenses widen to cover other parties, we ask - could this be the next expenses scandal?

Elections are an expensive business for political parties. Together the UK's six largest parties spent £39m on the 2015 general election campaign, an increase on the £34.4m spent in 2010. With so much money in the game, spending limits at elections play a vital role in keeping elections fair. The rules around election expenses are there to ensure a level playing field for candidates. If politicians can get around the rules, it could be money that makes the difference in marginal seats where the election is decided by a few hundred votes. That’s why there can be serious consequences for breaking the rules - elections can be declared void and MPs and their agents can face criminal charges.

Many of the issues that are now being investigated centre on the distinction between the two types of election spending - local “candidate spending” and national “party campaign spending”. In theory, local spending is that intended to support the election of a particular candidate in the local area, while national spending is that intended to support the success of a political party more generally. So that leaflet you received that tells you what a wonderful job your candidate has been doing for your local area is likely to be candidate spending, while the one that tells you about their party’s programme for government would be covered by national spending. But since most leaflets tell you about both the local candidate and their party’s national policy agenda, things get a bit more complicated.

The distinction is important because there are different spending limits for each type of spending. Parties’ national spending limits are around £19m for a general election, and this money is not limited by constituency - it’s perfectly legitimate to target this in marginal seats. There are much lower limits on candidate spending, with the typical limit for the last phase of a general election campaign around £15,000.

In practice, the lines between the two types of spending are often blurred. With tight spending limits, parties looking for an edge in a marginal seat have every reason to pass off candidate spending as national spending. That is precisely what many of the MPs now being investigated are alleged to have done. Money spent on a battle bus campaign that toured marginal constituencies was declared as national spending, even though the campaign involved sending activists to campaign for local Conservative candidates. In many of the seats highlighted by Channel 4’s investigation, had the battle bus been counted as local spending, it would have pushed the campaigns over the limit.

The problems with election expenses don’t end there. There is growing evidence that expenses have been simply left off spending returns. The Conservatives, citing “administrative errors” have admitted that almost £40,000 from the battle bus campaign was not declared, either as national or candidate spending. (Labour also blamed an admin error when they failed to declare the costs of the “Ed Stone” in their election return.) Channel 4’s investigation also alleges that there were undeclared receipts totalling almost £100,000 from Conservative campaigns in three by-elections in 2014, which would have taken the campaigns above the spending limit.

If everyone knows that election expenses are fiction, why has it taken so long for serious allegations to emerge? One reason is the lack of transparency around expenses, which means that only the most committed researchers have the time and resources to investigate suspected breaches. Election spending returns are not available in full online, only to those who make the trek to the office of their local council. In contrast, donations to political parties are available in online, searchable databases for all to see on the Electoral Commission’s website.

The question of election expenses concerns the foundation of our democracy - free and fair elections. What looks like a technical issue with forms, receipts and bureaucracy is actually a question of the integrity of the electoral process. These issues are unlikely to stop at the Conservatives’ door. Every major party ran a battle bus campaign at the general election. Questions are already multiplying about Labour’s battle bus expenses. What started out as allegations of wrongdoing by one party are increasingly looking like a problem with the system itself.

What do you think about election expenses - the next big scandal or a flash in the pan? Let us know by taking our election expenses survey.