PDCA was arranged by Sir Robin Butler in the wake of Margaret Thatcher’s resignation and was announced by the then Prime Minister, John Major, in March 1991.
The PDCA was introduced to assist former Prime Ministers still active in public life. Payments are made only to meet the actual cost of continuing to fulfil public duties.
The costs are a reimbursement of incurred expenses for necessary administrative costs arising from their special position in public life. Generally, these costs can include managing an office (staffing and administration costs); handling correspondence as a former Prime Minister; and support with visits and similar activities.
The allowance is not paid to support private or parliamentary duties, nor is it used for security purposes. The PDCA is in addition to any constituency office which they may maintain as an MP. The PDCA is paid from the Cabinet Office vote and administered by the Cabinet Office Finance Team.
All former Prime Ministers’ are eligible to draw on the PDCA. They cannot claim the allowance if they are serving as Leader of the Opposition.
If the former Prime Minister accepts any public appointment the level of the allowance will be reviewed in relation to the remuneration, if any, which he or she will receive from public funds.
The PDCA has a financial limit which was originally set to align with the staffing budget for MPs’ offices which is set by the Independent Parliamentary Standards Authority (IPSA).
The limit is currently set at £115,000 and has remained frozen since 2011. It will remain frozen at this level in 2023-24. The level of the limit will be reviewed by the Prime Minister at the start of a Parliament and annually.
In addition to the allowance paid, former Prime Ministers are entitled to claim a pension allowance to contribute towards their staff pension costs. This is limited to a maximum of 10% of the allowance.
The core allowance and pension allowance will not be carried over multiple years and all accrued costs should be settled in full by the end of Quarter 1 of the year immediately following the year being claimed.
Reimbursement of costs and pension allowance
Former Prime Ministers or their staff may only be reimbursed for actual administrative costs incurred in meeting the demands of the former Prime Minister’s public life up to the annual limit.
Copies of all supporting documentation, for example salary details and receipts for the former Prime Minister, or any of their staff, should be made available on request by either Cabinet Office Finance or the National Audit Office for audit purposes. These documents are not retained by the Cabinet Office.
The allowance cannot be paid in advance of need and will not be backdated.
Death of a Claimant
Staff salaries will continue to be paid for the three months following the death of the former Prime Minister. During this time legitimate office expenses incurred in winding-up the former Prime Minister’s office will be met in addition. Redundancy payments to the former Prime Minister’s staff must be covered within the cap.
The annual amount received by each PDCA claimant is published each year in the Cabinet Office Annual Report and Accounts.