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The teething problems of the new expenses system for MPs show the importance of fairness, consistency and communication

The House of Commons has run into problems with its new expenses system run by the Independent Parliamentary Standards Authority (IPSA). Its chairman, Sir Ian Kennedy, has admitted to 'teething troubles' in a Times interview; key staff have resigned; older MPs are reported to be defying the new rules; some MPs have allegedly been abusing expenses staff with angry phone calls lasting up to one hour; and MPs in turn have complained that the new expenses system is overly bureaucratic.

These problems are not exclusive to the political classes and are commonly encountered by businesses and organisations in both the private and public sector when introducing changes to the way things are run. HR professionals can learn some valuable lessons by looking at what is going wrong inside Westminster.

Any HR professional could tell you that cultural inertia is the main obstacle to introducing change to any organisation, whether to a minor procedure or a fundamental business process. Changing the employee expenses system is particularly emotionally charged because it affects the repayment of money employees have spent from their own pockets on company business and is a particularly sensitive flare point – it is no surprise that IPSA staff have been subjected to abusive calls.

The challenge of cultural change is particularly acute in the House of Commons because a hardcore of MPs still view expenses as a perk, an adjunct to their salaries and perceive that something is being taken away from them. This attitude is no less common in other parts of the public sector and the private sector, where all too often being permitted to claim expenses is seen as a badge of office.

Fairness, consistency and communication are the keys to making such a change work.

The employee expense policy must be fair and equitable. A YouGov survey commissioned by GlobalExpense revealed 71% of staff think it is acceptable to fiddle expenses when an employer doesn’t reimburse all of the costs incurred by the employee and 36% believe taking a long time to reimburse an employee is a valid reason to fiddle expenses.

The indications are that the MPs’ expenses policy isn’t as well thought through as it should be and that there are some genuine examples of unfairness that still need to be ironed out as illustrated by Mark Lancaster, Conservative MP for Milton Keynes North East, who has been sleeping in his Commons office after late sittings in Parliament because he is no longer eligible to claim hotel expenses in London.

Perceived unfairness, late payment, incorrect payment and other bureaucratic hiccoughs that cause delays to staff getting back money they have spent on behalf of the company are triggers for fraud. Employees should be reimbursed for everything they are expected to spend, in as fast and efficient a way as possible.

The policy must also be seen to be fair for all and applied consistently across the board from the CEO to the cleaner. This will help authorisers do battle against die-hard reactionaries who don’t want to understand the new rules. Some companies name and shame employees at all levels that persistently break the rules, and others present directors with the total amount of out-of-policy claims that they have approved during Board meetings. Eventually, patience and consistency will win out.

Authorisers and users both need to be trained to use the new system and to understand the new rules.  This will go a long way towards undermining the objections of those resistant to the changes and also give authorisers the authority they need to reject claims that fall outside the new policy. The policy and its rules should be clear and straightforward and they should be prominently communicated. New joiners to an organisation should be trained on the system as part of their induction.

A company or organisation can spend tens of thousands of pounds with a specialist adviser to produce a compliant, fair, well-written expenses policy, but if they don’t educate their people to use the system correctly and ensure that there is an efficient back office audit process and user support, all the money they’ve spent on the policy will be wasted.

Finally, our research shows if employees are rewarded appropriately they won’t be tempted to recompense themselves via the expenses system.

David Vine is the CEO of GlobalExpense