Party funding: Tidying up the sums

It really matters. Honestly.
It really matters. Honestly.

A quick update to yesterday's ruminations about party funding - and how tidying up the way the Conservatives, Labour, the Liberal Democrats et al provide their accounts could make a big difference to coming up with a deal.

At stake is the standardisation of party accounts, as Tuesday's report from the committee on standards in public life makes clear. This is far from the most gripping of topics, it's fair to say, but it's nevertheless critical: only once we can compare how much money the parties actually have will it be possible to find a level for the donations cap which, in broad terms, impacts both Labour and the Tories in roughly comparable ways. When that figure is identified, whatever it turns out to be, we'll be a lot closer to a deal.

Unfortunately this is nowhere near as simple as it sounds. Part of the problem is party financing isn't just a case of one number for each party. Yes, all have the accounts from their central offices in London. All donations to these over £7,500 have to be declared.

But there's more to it than that. There are other 'accounting units' too - local party branches all have their own sets of accounts. Until now getting the full picture from all of these has proved nigh on impossible, because of the different accounting standards used by the parties.


Fortunately steps are underway to remedy this. Initial negotiations on the issue started in 2008. The Electoral Commission then presided over a consultation which took place over the last year, culminating in an agreement being reached when it published a common set of standards in September.

Political parties are required to comply with these new standards by the close of the 2011/12 financial year next April, when they will have to submit their accounts for the 2011 calendar year. The Electoral Commission says it will work with the parties to help them through this process, but it is prepared to deploy the sanctions and fines it has at its disposal if any of those pesky 'accounting units' refuse to play ball.

It seems inevitable that there will be some local associations which cause trouble. But even in the first year we should be able to build up a much more accurate picture of how political parties get their money, and therefore how the big picture of party funding at a national level is affected.

This might sound boring, but it really matters: these are the organisations which wield power in this country. How they get their money is critical to our status as a healthy democracy. Tidying up the sums could be the first step to cleaning this murky process up.

-- Alex Stevenson

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