A TROVE of documents released by the Scottish Parliament show that two former MSPs who shared a constituency office in Arbroath were forced to pay back more than £12,000 after breaching Holyrood expenses rules.
The two former Conservative MSPs, Nanette Milne and Alex Johnstone, leased their regional constituency office from the local branch of their party, the Angus Conservative and Unionist Association.
A 2014 probe by parliamentary authorities established that they had claimed £12,512.56 too much for their rent, after overstating the amount of space in the building that was used for parliamentary business. The extra taxpayer cash would have gone straight to Conservative Party funds. To rectify the over-payment, the MSPs paid back £9,975.74. Parliamentary authorities also withheld two months rent and other expense claims to claw back the balance of the outstanding funds.
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A copy of the repayment cheque obtained by The Ferret showed that the MSPs made the repayment on March 17, 2014.
The over-payment was discovered after Nanette Milne admitted in a 2014 email to parliamentary authorities that she and her colleague used a far smaller area of the building as their constituency office than had been initially claimed in 2008.
At the start of the last parliament, her fellow MSP Alex Johnstone had told parliamentary officials that most of the building they rented was used as their constituency office.
In fact, the majority of the space was used by local party activists to support Conservative Party campaign activity. A subsequent investigation by parliamentary officials showed that the inflated claims had been submitted over a period spanning more than seven years.
Holyrood rules stipulate that if an MSP rents office space from a building owned by their political party then they must only claim a “market rent” for the space on expenses. They must also submit an independent valuation with their expenses claims to justify their claim.
Where some of the building is also used for political campaigning, MSPs must also submit an estimate of what proportion of the floor space, and the costs associated with running the building, can be attributed to parliamentary activities. They can only claim cash to support the costs linked to parliamentary activities.
A Scottish Parliament spokesman said: “The onus is on the Member to ensure that all claims are accurate and supported by the necessary documents. Last year, Alex Johnstone and Nanette Milne reimbursed the Parliament £12,189 rental costs in respect of their regional office.
“The members’ lease stated they occupied the ground floor of the property, but in practice used the cheaper first floor accommodation.
“The members therefore agreed to repay costs on the basis that the value of the office space occupied was less than its fair rental value.”
Although Nanette Milne and Alex Johnstone are the only former MSPs to have been forced to repay money for over-claiming their office expenses in this way, other former MSPs that rent office space from their political parties have also had their claims reduced by Holyrood officials.
Emails obtained by The Ferret show that another long-standing former Conservative MSP, Sir Jamie McGrigor, whose Ardrishaig landlord is the Argyll and Bute Conservative Association, tried to claim £5,250 per year for his office expenses in 2014-15, a fee which included a £10 per month surcharge to cover his monthly expenses for toilet rolls and cleaning materials.
Records show that the MSP successfully claimed £5,250 in office expenses for several years, but it was not until 2014 when officials confirmed that local conservative campaigners occupied 40 per cent of the office space and that cleaning materials would be ineligible, that his office expenses were revised down.
After his staff negotiated with Holyrood officials, he submitted a revised lease agreement as part of his office expenses claim which came to just £2,850. Unlike the case involving Nanette Milne and Alex Johnstone, he was not required to pay back any money in relation to previous claims.
PARLIAMENTARY officials said that they did not seek re-payment from McGrigor, or his local party, because the office lease held on record was so old that it pre-dated rules for a mandatory independent valuation. They said: “Our internal auditor was advised during his visit to Mr McGrigor’s regional office [in 2013] that the Member’s party also occupied and used part of the property.
“As part of our internal audit process, we advised Mr McGrigor in 2014 that a valuation report would now be required for his office.
“On the basis that the valuation report showed a total rental value of £4,750, and the Member’s party occupied 40 per cent of the accommodation, we advised Mr McGrigor we would pay only £2,850 going forward. We determined it was fair and reasonable not to seek retrospective payment.”
Conservative MSPs are not alone in renting office space from their local political parties. A number of other politicians from across the political spectrum have also rented offices from their local party, including Alex Salmond, Kenny MacAskill, Alasdair Allan, Roseanna Cunningham, Willie Rennie and Murdo Fraser.
The practice, which has been common among both Westminster and Holyrood politicians, has been criticised by the Taxpayers Alliance for providing a "back-door subsidy" to political parties.
It is to be banned in the next parliament following changes to the expenses rules agreed by the Scottish Parliamentary Corporate Body (SPCB) in November 2015.
Former MSP Liam McArthur, who was a member of the SPCB at the time the new rules were adopted, explained to parliament that the rule change “will end the ability of members to lease offices from or to political parties. That will create a clear divide between parliamentary and political activities, and will counter any potential perception that public funds are being used to support party-political organisations.”
The rule change will not apply to Westminster politicians.
A Scottish Conservative party spokesman said: “Alex Johnstone and Nanette Milne were occupying space in the Gordon constituency office.
“Once it became apparent that there was a discrepancy relating to the terms of the lease, the MSPs drew the attention of the Scottish Parliament allowances office to make them aware of the situation and it was resolved. In the Highlands, the reduction that Jamie McGrigor received was in line with revised guidelines set by the Scottish Parliament.”
Alex Johnstone is the top Conservative candidate on the North East Region list. Neither Jamie McGrigor nor Nanette Milne are seeking re-election again.
This story was produced in partnership with The Ferret https://theferret.scot/msp-expenses-nanette-milne-alex-johnstone, where all the source documents are published