The Political Parties, Elections and Referendums Act (PPERA) was introduced in February 2001 to regulate donations and the funding of political parties. It applies not just to constituency parties but also – in slightly different ways – to the funding of Council Groups. It has been amended both by the Electoral Administration Act 2006 and Political Parties and Elections Act 2009.
Council Groups are regulated donees under this Act, as they are members associations (associations whose membership consists wholly or mainly of members of a registered political party). This is because they are not given a status in the Party Constitution that allows the Party to intervene in or take disciplinary action relating to their financial and administrative affairs sufficiently to take legal responsibility for their finances.Summary
- Donations over £200 can only be accepted from permissible sources
- Details of donations over £200 must be recorded and kept for 6 years
- Donations over £5000 (in a calendar year) must be declared to the Electoral Commission.
- Donations over £1000 received by an individual councillor must be declared to the Electoral Commission
The word donations includes not only cash, but donations in kind. For example, if a councillor pays for his or her own leaflets or the council groups pays for leaflets out of its group bank account, then the value of these should be classed as a donation. In both of these examples, the local party that covers the ward(s) concerned should include in its accounts a ‘notional donation’ equal to the value of the leaflets.
Donations can only be accepted if they are
- under £200, or
- from an permissible donor – there is a long list of permissible donors but it is strongly recommended that (for political and probity reasons) Council Groups only accept donations from their member councillors. Other donations should be made to the constituency party. Donations can be made by means other than cash and there is a set of regulations governing these and how to assess their value.
The Electoral Commission has taken the view that donations made by standing order/direct debit are to be treated as a separate donation for each transaction. Donations that aggregate more than £5,000 over a year need to be declared to the commission. If Councillors are making donations of over £200 then they must be on the electoral roll.Recording a donation
When you receive a donation of over £200 you must ensure the donor is a “permissible” donor. If it is not from a permissible source it must be returned in accordance with the regulations. You need to record the full name and address of the donor, the date the donation was received and the date it was accepted (or returned if an non-permissible donor)Reporting Donations
The following must be reported to the Electoral Commission:
- Donations exceeding £5,000
- Donations of more than £1000 from a donor who’s donations you have already reported for being more than £5,000
- Donations of over £200 from an impermissible source
- Donations over £1,000 received by an individual to help them obtain an elected office
Forms for the reporting of donations are available from the electoral commission website
www.electoralcommission.gov.uk. The Electoral Commission website also contains further information and explanatory notes. Please note these limits only apply to Council Groups – a different set of limits is in force for constituency parties.Donations made by Council Groups
If council groups contribute to the local party the “ceiling” above which donations should be declared by the recipient local party is £1,000.
If council groups contribute to an individuals’ election campaigns the “ceiling” above which donations should be declared in the candidates election expenses is – of course – £50.Loans made to/or by Council Groups
Under the amendments made by the Electoral Administration Act 2006 Council Groups and individual councillors also have to abide by the rules concerning loans. The definition of loans includes normal commercial credit like overdrafts as well as loans from supporters. The reporting thresholds and reporting periods for loans are the same as for donations as set out above.
Changes in the 2009 Bill
If the council groups donations to the party during the calendar year are going to exceed £25,000 then there is a new set of rules to follow from January 2010. Requiring the group to make declarations direct to the Electoral Commission both that they have made contributions totaling more than this amount. Any individual underlying contributions of more than £7,500 from one individual will also have to be declared directly.
In either October 2009 or January 2010 the thresholds set out in the guidance above will change as follows:
- All references to £200 become £500
- All references to £1000 become £1500
- All references to £5000 become £7500
Where to go for further help
Further advice particulary on the new changes can be sought from either David Allworthy or Paul Rustad in the Compliance Department at Liberal Democrat headquarters. Useful external links
Electoral Commission forms for regulated donees (including members associations)Electoral Commission forms for political partiesPolitical Parties, Elections and Referendums Act 2000Electoral Administration Act 2006Political Parties and Elections Act 2009Updates and comment
Last updated by David Allworthy on 20th August 2009.
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