Report: Political finance regulation at the May 2015 UK general election

The Electoral Commission’s statutory role as the regulator of party and election finance in the UK includes a duty to keep the legal framework under review, and report on our conclusions.

Some of these recommendations will require the UK Government and Parliament to implement changes. Following the implementation of the Smith Commission and St David’s Day Agreement, most of the matters covered in these recommendations will also be within the remit of the Scottish Parliament and Welsh Assembly in relation to elections to the Scottish Parliament and National Assembly for Wales and local government elections. 

Recommendation 1: Investigation and sanctioning powers for noncompliance with candidate spending and donation rules

We continue to recommend that the Electoral Commission should be provided with investigative powers and sanctions for offences relating to candidate spending and donations at specified elections. We think these tools should initially be available at elections where, from our experience, unsanctioned breaches of those rules are likely to have the most impact. These are elections to the following legislatures:

• UK Parliament
• Scottish Parliament
• National Assembly for Wales
• Northern Ireland Assembly

Any proposed changes would need to consider the costs of setting up a new regulatory framework together with the potential regulatory benefits. We would then consider whether these powers should be extended to other elections in due course.

Recommendation 2: Spending in constituencies

We recommend that the relationship between the definitions of regulated candidate spending and regulated political party spending that has been in place since 2000* should be reviewed by Governments, Parliaments and others, with a particular focus on spending in constituencies. We intend to contribute to this consideration by undertaking further analysis of spending reported at recent elections. 

Recommendation 3: Campaigning using social media

We will give further consideration to how campaigners should report spend on social media at future elections. As spend in this area grows, there is the potential for less transparency if expenditure on social media is not easily identifiable within the spending returns because social media is not a specific reporting category*. This will need to be considered as part of reviewing all of the expenditure reporting categories to ensure that they remain proportionate and relevant to future trends in campaigning. We recommend that Governments and Parliaments should consider the timing needed for implementing changes before the next major elections expected in 2019, 2020 and 2021**.

(*The reporting categories for the spending returns are set out in legislation.)

(** European Parliament Elections in 2019, UK Parliamentary General Election in 2020 and elections to the Scottish Parliament, Welsh Assembly and Northern Ireland Assembly in 2021.)

Recommendation 4: Regulation of spending on staff time dedicated to election campaigning

We continue to recommend that, in principle, staff costs associated with regulated campaign spending should be included within the regulatory controls for all types of  campaigners: candidates, political parties and nonparty campaigners. The solutions outlined in our Regulatory Review provide a solid foundation for introducing changes and addressing the anomaly that means that the spending controls for political parties do not cover a potentially large strand of their election campaign spending. The Government should give further consideration to this issue when proposals for wider changes to the rules are developed. We have developed two options that could form the basis for further testing and consultation with political parties and other campaigners.

Recommendation 5: Sanctions for non-compliance with obligations placed on political parties and other campaigners under PPERA

We think there is a case for reviewing and increasing the present cap of £20,000 on our power to issue sanctions. It is important to keep the cap under review, particularly in light of experience from the initial 5 years of the civil sanctions regime and comparisons with other regulatory and sanctioning systems. As the cap is set in legislation, any increase would need to be implemented by Government and/or Parliament.

Recommendation 6: Joint campaigning by registered non-party campaigners

We continue to recommend that the UK Government amend the recently introduced legal provisions for lead and minor non-party campaigners working in a joint campaign, to require minor campaigners to provide accurate spending information to the appointed registered lead campaigner. We also recommend that a campaigner in a joint campaign should be required to report the total spending of itself and its partners, not just its own spending, for transparency purposes and for verifying compliance with the
spending limits.

Recommendation 7: Targeted spending by registered non-party campaigners

For future elections, we recommend that the UK Government introduce a specific mandatory reporting category for targeted expenditure that non-party campaigners have incurred and spent in relation to an authorisation given by a political party. Without this requirement, the recently introduced targeted spending provision only provides limited transparency and it is difficult to identify in the spending returns how much targeted spend has been incurred.

Recommendation 8: Expected changes to UK parliamentary constituency boundaries and impact on campaigner spending limits 

It will be important to consider the implications of the UK Parliamentary constituency boundary review in relation to spending limits for candidates, political parties and non-party campaigners before the next UKPGE expected in 2020* to ensure that spending limits reflect any changes to the size and number of constituencies and to also ensure that campaigners can adequately communicate messages to voters. We recommend that the UK Government take this into account when planning for the implementation of
the boundary review.

Recommendation 9: Publication of candidate spending returns

To improve transparency and accessibility of candidate spending returns, we continue to recommend that Returning Officers should be required to publish spending returns online as well as through the existing methods of public  inspection. We support recommendation 12-5 of the Law Commissions’ review of Electoral Law which proposes a method for implementing this change through legislation.

Recommendation 10: Clearer candidate spending limits

To reduce the risk of candidates spending over the limit, and of unintended non-compliance with the rules, we continue to recommend that the spending limits should be made clearer for candidates and their agents. We support the method proposed in recommendation 12-313 from the Law Commissions’ review of Electoral Law that, when based on formulas set out in legislation, the limits for candidates at elections should be published by the Returning Officer along with the notice of election. This change would need to be implemented through legislation.

Recommendation 11: Simplifying the rules on pre-candidacy spending and donations 

At the 2010 and 2015 UKPGE we have observed that having two separate candidate regulated periods and two separate spending limits causes administrative burdens on candidates and agents and adds to the risk of noncompliance with the rules. We provide more details on this in our 2013 regulatory review. We continue to recommend that the UK Government consult campaigners on this matter as part of its next review of candidate regulation.

Recommendation 12: Pre-election reporting of donations for UK general elections: Political parties and non-party campaigners

We continue to recommend that the UK Government implement our proposals to replace weekly pre-election donation reporting for political parties and nonparty campaigners with a single report that would cover most of the period between the dissolution of Parliament and polling day. The report should only be required from political parties that are standing candidates in that election and receive a reportable donation or loan during the relevant period. Making these changes would reduce the regulatory burden upon these campaigners while retaining the same level of pre poll transparency as under the current rules.