Lib Dems fined £20,000 over general election expense return

Following the news that Labour has been fined £20,000 for failing to include some spending items in its general election expense return comes the news that the Liberal Democrats have been similarly fined:

The Liberal Democrats have been fined £20,000 as a result of the Electoral Commission’s investigation into the party’s 2015 UK Parliamentary General Election campaign spending return. The Commission concluded that the return was not complete as required by the law. The penalty is the highest that the Commission is able to impose for a single offence…

The investigation found that 307 payments totalling £184,676 were missing from the Liberal Democrats’ spending return without a reasonable excuse. In addition, invoices supporting 122 out of the 307 payments were missing from the return.

Commenting on the outcome of the investigation, Bob Posner, Director of Political Finance and Regulation & Legal Counsel at the Electoral Commission said:

“Our investigation uncovered systemic failures in ensuring that the rules were being followed. The Party and its officers co-operated fully throughout the investigation. However, this is an experienced party that failed to meet the basic requirements of the law, and cases like this undermine voters’ confidence in our political finance system. This is why we have applied the highest financial penalty available to us.” [Electoral Commission]

Part of the issue is what now appears to be a regular mistake made across parties, where local campaigns apportion the costs of an item of expenditure between the constituency and the national return but then that national share does not get accurately added in to their party’s national total. There’s a lesson there for all parties, including in this case of course particularly the Liberal Democrats, about tightening up procedures for cross-checking such figures internally before submitting national expense returns.

It’s also an issue very different from the election expenses allegations which the police are investigating Conservative MPs over as none of the omissions in the Lib Dem cases involved being anywhere near the legal limits, whilst the Conservative constituency cases are all about whether the legal limits were massively breached.

(The Electoral Commission’s full report – see below – emphasises that there is no evidence that any of the party’s constituency agents failed to comply with the law. I’m the co-author of the party’s handbook for general election agents and on looking at the advice given in the light of this, I’m still confident it was correct and sufficient, but clearly this case highlights a good reason for giving this topic even more emphasis in future, especially as reporting the national share of local expenditure can involve local postholders other than the agent.)

I’ve often been critical of the Electoral Commission on election expense matters in the past but on this point it’s fair to give them praise: the system of cross-checking local and national expense returns looks to be working at discovering issues needing further investigation.

More complicated is the odd twist of whether the party knew some of the expense return was wrong at the time it was submitted, which according to the Electoral Commission’s own report into the case involves the party’s auditors giving advice that the information gathered ready for submission could not be corrected (!):

During the investigation and when making representations on the Commission’s proposal to penalise the Party, it explained that the missing spending in its return had resulted from:…

Reports from five accounting units that were received after external auditors had begun the audit of the return, but prior to the submission of the return. The Party stated that its external auditors told it that these payments could not be added to its return at this point.

Further official investigations are now taking place into this point.

The party’s official response is:

We always endeavour to ensure our reports of national campaign expenses are completed in full, in good time and according to all applicable rules.

These mistakes, caused by issues with a small number of local accounting units, were a result of human error and failures of process. We are taking steps to ensure these mistakes are not repeated in future. We will co-operate fully with any investigation.


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