In 2009, the exposure of MPs' expense claims caused outrage amongst the British public. A documentary aired on 25th March by the BBC highlighted the true extent of the damage done
Moats, duck houses, manure, £6000 cleaning bills, the costs of changing light bulbs and luxurious second homes, were just some of the items which featured in the headlines 10 years ago. Following Freedom of Information requests made at the time, investigative journalists were presented with 1.5 million digital receipts (which had been partly redacted), and were tasked with uncovering the extent of the expenses problem within parliament.
MPs, like most employees in a business, had been using their expenses policy to take advantage for personal gain, being accused of "playing the system". Many doing so, as they had been denied a pay rise, but instead offered a more lucrative "expenses package".
There were a handful of parliament members who were investigated and eventually jailed for fraud, however the majority were not. The key defence which was repeatedly (and to this day) offered up by those involved was this; No laws had been broken. What they had claimed for had been within the rules set by parliament.
The expenses scandal offers a very extreme example of an expense policy which is out of control.
Two factors contribute to the failure of this system:
- The expenses policies themselves - Excessive expense claims, (although morally questionable in this case considering the source of the reimbursement), were wholly within the allowances.
- The culture to "over-claim" is almost the norm now. The BBC2 documentary went as far as to highlight that MPs would "go to John Lewis to spend lots" simply because the end of the tax year was approaching and they had allowances remaining.
The combination of the two failings is, as we have seen, lethal. Crucially, it is not just parliament that fall victim to this, and is happening within many businesses across the globe. Businesses are paying out for excessive and sometimes unnecessary claims, because their policies allow it.
The lesson here is an important one for any business which has employees claiming expenses.
Having a reasonable and strong expense policy is vital. Claims need to be analysed, and the policy reviewed, then adjusted accordingly, as business needs change. It is very difficult to adjust the mindset of employees who want to over-claim on their expenses, but by restricting allowances and introducing more thorough checks, it is possible to promote a more honest culture, and in doing so, cutting back on the cost of employee expenses.
Click here to find out how MEO-Business could help your business to achieve this.