Guide: How can we fix party funding

Unlock Democracy wants to see substantial change to the culture of party funding. Parties should be recognised as providing a beneficial, democratic service to to civil society along with greater focus on local campaigning and decentralisation. Additionally, major changes to the party funding system are required including an effort for parties to focus on the individual voter rather than chasing large donations.

There are several options for reform which involve introducing caps on donation and expenditure, and changing the source and system for party funding.  Introducing caps will limit the amount that can be donated to or spent by a party during a fixed time period:

Cap donations

 In conjunction with another subsidising form of income, upper limits could be put on donations to parties or from companies and organisations so that donations cannot be accepted over a specified limit. This would mean a single donation could not overwhelmingly influence a single election campaign, reducing the perception of sleaze and corruption in party funding.

Spending caps

These would limit how much political parties can spend on a single campaign, at either a national or local level in order to stop wealthy parties exerting greater influence over parties with fewer resources and reduces the experience of rapidly escalating costs with declining benefit.


Forms of funding will change the way parties are financed:

Funding thresholds

 Changing the funding threshold to include any party that has representation at a devolved, national or European level which would support the emergence of minority parties.

Grants

 These are given from public funds to subsidise political parties, either as a specific grant or block grant. While block grants could further increase centralisation of parties, specific policy development grants would allow parties to develop competing and coherent policy options.

Assistance in kind

The state can help to subsidise parties through providing specific services, allowing the parties to communicate with the electorate in ways they may not usually be able to afford.

Tax relief

This would allow parties to claim tax back as charities do to allow them to use funds in other ways and would recognise their contribution to civil society.

Matched funding

The government would match all donations to parties, subject to an upper limit meaning that it would be equally valuable for parties to chase small donations rather than a single large donation.

Money for votes

Public money could be allocated to parties in proportion to the amount of votes won at a general election, linking state funding to electoral popularity. However, this system does not take tactical voting into account nor does it counter centralisation.

Registered supporters

Parties receive a fixed sum for every registered supporter, encouraging parties to recruit members and therefore values individual participation in politics.

Vouchers  

When they vote, individuals would be given a voucher which would entitle the local political party they chose, not necessarily the one they voted for, to a fixed sum of money for the duration of that term.