Revealed: another way MPs are at it

Britain's MPs are taking advantage of another allowances "loophole" that lets them channel taxpayers' money into the network of local constituency associations around the country.

More than 100 MPs are using expenses, paid from the public purse, to pay their often impoverished constituency parties thousands of pounds for facilities and services such as rent and secretarial help, an Independent on Sunday investigation has revealed.

The cash is funnelled into general accounts, which could be used to fund political activities including canvassing and campaigning. The MPs, who include David Cameron and nine members of his Shadow Cabinet, insist they are paying for legitimate business services and that the arrangements have the blessing of House of Commons authorities.

But critics claim that often the cash is being used to supplement the income of local parties – and amounts to state funding for party-political campaigning. One senior Tory claimed yesterday he had battled with his own local association to prevent them from getting their hands on the cash, which is paid through the incidental expenses provision. "They saw the money as theirs," he said. "I said they couldn't have it because they were not providing me with any services."

The former Conservative MP Bob Spink said he had asked the House of Commons authorities for their "protection" from officials whom he claimed had demanded that he contributed cash from his parliamentary allowances to his local Tory party.

Parliamentary regulations say MPs must negotiate contracts for accommodation and services and lodge a copy of their agreement with House of Commons authorities. The Green Book setting out the rules also declares that MPs "must avoid any arrangement which may give rise to the suggestion that public money is being diverted for the benefit of a political organisation". An IoS investigation of hundreds of local party accounts filed with the Electoral Commission reveals that more than half the 193 Conservative MPs, at least 24 Lib Dem and 16 Labour MPs are paying their local party associations for facilities and services including rent and secretarial help.

The shadow leader of the House of Commons, Alan Duncan, who paid an £8,000 "rental contribution" to his local party in 2007, said it was a market rate and included heating and other services. Labour MP Jim Dowd spent £16,250 renting offices from his Lewisham West and Penge constituency party. Party leader Nick Clegg handed over £8,040 for rented office space and services to his Sheffield constituency party.

A Conservative spokesman said it was "perfectly legitimate for MPs to use their allowances to fund offices in their constituencies relating to parliamentary business, as MPs of all parties do".

Mark Wallace, campaign director at the TaxPayers' Alliance, said: "Just because they are filing details of the arrangements with the parliamentary authorities doesn't mean they are automatically beyond reproach."