Spooks expenses: We've been inspecting you, Mr Bond

Even the secret service has been rocked by the MPs' scandal. Under new rules, frontline agents have to account for every (Money)penny
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Indy Politics

It is difficult to imagine James Bond asking for a receipt for his martini, but in the new mood of austerity and squeamishness about expenses, Whitehall bean counters are recording for the first time the cash spent by Britain's spies on the frontline.

Accounts for the Cabinet Office, which covers MI5, MI6 and the GCHQ listening agency, reveal that £40m was paid last year in extra administration costs, on top of £53m in salaries, for the intelligence services.

In previous years, only salaries were recorded in the official accounts. The move has been dubbed, all too predictably, a "licence to bill".

Government sources admitted the extra money was because of a "reclassification" in how people on the frontline are paid – meaning funds for expenses and paying sources now go through the bureaucracy of Whitehall. Until now, frontline officers have received monthly cash handouts of several thousand pounds to cover expenses and other costs.

While it is unlikely that any spy would have to provide receipts for money paid to sources, insiders said the move showed how the cash would be monitored more tightly. It is unclear whether the change was on the orders of Sir Gus O'Donnell, the Cabinet Secretary and head of the civil service, or Alex Allan, the chairman of the Joint Intelligence Committee.

Conservative chairman of the Commons counter-terrorism committee Patrick Mercer, who served as an intelligence officer in the Army, said: "When I was handling sources I was given quite a large sum of money known as a slush fund with which I paid informants. I never had to account for that.

"This sounds like tightening up on that sort of thing and I guess quite rightly so. It is fascinating that they are going through this for the first time. When I did it, it was very informal, literally stuffing notes into people's pockets. It might make things a bit more bureaucratic out on the frontline."

A Whitehall source said: "There has been a reclassification of how some people on the frontline are paid."

The Cabinet Office refused to comment on matters relating to intelligence agencies.

The change is revealed in the Cabinet Office's annual report, published last week. It also reveals that all staff in the department – including intelligence officers – have been told to recycle spectacles and keys under new sustainability rules. The report says: "These include... introducing a 'binless office' and expanding the range of materials we recycle to include plastic bags, CDs, batteries, spectacles, books, stamps, mobile phones and keys."