Members of Parliament are confronting significant public criticism over proposals to substantially increase their office and accommodation budgets, after it was revealed that direct warnings from Treasury ministers were disregarded.
Treasury Concerns Overruled
The controversy centres on the Independent Parliamentary Standards Authority (Ipsa), the body that sets and administers MPs' pay and expenses. Last year, the Chief Secretary to the Treasury, Darren Jones, raised serious alarms about the rapid escalation of spending on politicians and their staff. In a letter to the Speaker's Committee for Ipsa (Scipsa) in March, Mr Jones, who was then Rachel Reeves' deputy, highlighted the government's broader 'fiscal challenge'.
He explicitly stated that the Treasury would seek to reduce the proposed 10 per cent increase in MPs' staff costs, noting the assumed 5 per cent pay uplift for staff was 'significantly higher' than affordability figures for public sector workforces. Furthermore, he opposed the 7 per cent rise in accommodation and office costs and a 17 per cent increase in uncapped budgets for travel and subsistence.
Mr Jones emphasised that no extra funding would be available for central government pay awards in 2025-26, meaning departments would have to absorb such costs. He also confirmed the Treasury would not fund the requested £2.7 million in additional support funding.
Ipsa Pushes Ahead with Increases
Despite these stark warnings, the Commons committee that oversees Ipsa approved the sharp increases. A spokesman for Scipsa stated that while it had 'regard' to the Treasury's view, it was not 'bound' by it, arguing that Ipsa operates independently from government departments.
Ipsa's current estimate for the total cost of MPs' pay, staffing, business costs, and expenses for 2025-26 is £268.5 million, a notable rise from £247.9 million in 2024-25.
One of the most contentious proposals involves changing the rules for MPs representing constituencies in outer London. Currently, these MPs are ineligible to claim up to £30,000 a year for renting a flat near Westminster, instead receiving a London Area Living Payment of £6,570. Ipsa is now consulting on allowing them to choose the more generous accommodation allowance, citing reported 'difficulties' from long hours and off-peak commutes.
Public and Watchdog Reaction
The proposed changes have ignited fierce backlash from taxpayer groups. John O'Connell, chief executive of the TaxPayers' Alliance, labelled the growth in expenses as 'outrageous'. He argued, 'Brits up and down the country face increasingly difficult commutes... yet IPSA is proposing that MPs within commuting distance of their office get handed a central London pied-à-terre paid for by taxpayers.'
He called on MPs to 'block this mad idea'. Meanwhile, sources at Ipsa defended its position, stressing it operates 'differently' from government departments and could not 'absorb' costs in the same way, a distinction they claim the Treasury 'recognised'.
The watchdog is also consulting on a new, more 'flexible' system for setting MP pay, having already implemented an interim 2.8 per cent increase last Spring. No final decision has been made on the London accommodation changes by Ipsa's board.
