All-party parliamentary groups (APPGs) have received over £20m worth of funding from external organisations since the 2019 general election, with registered lobbying agencies dominating the ranks of biggest benefactors.

Companies are required by law to sign the consultant lobbyist register if they engage in direct communications with ministers in relation to government policy or legislation on behalf of paying clients.

APPGs are informal interest groups of MPs and peers that facilitate cross-party work on an issue, a country or a sector, but the chair of one of Westminster’s ethics watchdogs has told Sky News they could represent “the next big scandal”.

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The role of lobbying agencies is usually to provide MPs with a secretariat to administer the APPG.

The agencies are paid to provide the service by other outside organisations, which are listed in the parliamentary register.

But Lord Pickles, chair of the advisory committee on business appointments, said: “This is the next big scandal, and I think we need to take action now before it further develops.

“We need to know when people are producing reports that they’re speaking for members of parliament and not for the lobbyists.”

He added: “By and large, the all-party groups are fairly harmless. They perform in a niche in which particular members of parliament are interested.

“But for a number of them, the secretariat comes from professional organisations or lobbying groups and from organisations that have a political axe to grind. And I don’t think there is sufficient transparency in terms of why they’re doing.”

Lobbying industry insiders have defended the role of APPGs in the democratic process as a “force for good” – but one conceded to Sky News “there are bad ones”, while another said a “minority” are funded by organisations “trying to unfairly influence parliamentary decisions”.

From banking, beer and Bermuda, to Christianity, climate change and China, there are now more APPGs than there are sitting MPs, with 746 active groups in the latest register update – a number that has almost doubled since 2015.

The groups have come under greater scrutiny following MI5’s revelation in January last year that Christine Lee, a businesswoman identified as an agent for the Chinese government, had used donations to the Chinese in Britain APPG as part of “political interference activities“.

There has been a particular focus on how MPs have used the groups as justification for accepting gifted travel and trips abroad from foreign governments.

For example, £222,308 of the £242,000 that Qatar’s Ministry of Foreign Affairs has donated to MPs since the last election came in the form of flights, hotels and hospitality for APPG visits to the country.

But while groups dedicated to foreign countries have so far attracted the most attention, those focused on policy areas make up a much greater proportion of APPGs.

Last spring, the Committee on Standards published a report that called on the government to look again at how APPGs are regulated, warning they could “all too easily become a parliamentary front for an external commercial entity”.

While the report concluded that lobbying was “an important part of a healthy democracy” and that it was “crucial that the interests of different sectors, organisations and communities can be brought to the attention of members and ministers”, it warned there were “few, if any, safeguards in place” for APPGs.

In September, the government responded by saying it agreed that “their informal structures make them potentially vulnerable to improper influence and access” and welcomed the committee’s proposals for a “gatekeeper” to be introduced to approve the establishment of any new APPGs.

Although APPGs can use the parliamentary meeting rooms and a portcullis logo on their publications, they receive no financial support from parliament and many are run with the assistance of external organisations – which include private companies, charities and academic institutions.

Some provide cash donations, but most of the backing comes in the form of benefits in kind. This often amounts to providing a secretariat which handles administrative work, events, trips and the publication of reports.

Who needs to register as a consultant lobbyist?

Analysis by Sky News shows 10 of the top 20 biggest sources of funding to APPGs are registered consultant lobbyists, who have provided millions of pounds worth of services to the groups.

According to the Office of the Registrar of Consultant Lobbyists, organisations are required by law to sign the register if they are VAT-registered in the UK and engage in “oral, written or electronic communications personally to a Minister of the Crown of Permanent Secretary” on behalf of a paying client in relation to attempts to “make or amend” legislation or policy.

Policy Connect – the biggest player in terms of the monetary value of the services offered – currently provides the secretariat for 10 APPGs on areas such as carbon monoxide, design and innovation, and climate change.

The company, which describes itself as a cross-party thinktank that operates as a not-for-profit social enterprise, has been on the register of consultant lobbyists since 2017 and declared more than 440 clients in that period – including trade and industry bodies, charities, educational institutions, local authorities and private companies.

For example, in the APPG register in 2021, Policy Connect said it was running the secretariat for the APPG on manufacturing based on funding it had received from trade groups such as Make UK, the British Aerosol Manufacturers Association and the Institution of Engineering and Technology; education institutions like the University of Bristol, and private firms such as BAE Systems, Tata Steel, Cummins and Deloitte.

On its website, Policy Connect lists organisations that have paid to join its “supporters programme”. It breaks them down into categories based on the size of their financial contribution, with brackets going from £5,000 up to £70,000.

Policy Connect defended this programme at a hearing of the Standards Committee last year, when challenged by MPs on whether this amounted to charging different rates for access to APPGs.

Claudia Jaksch, CEO of Policy Connect, told Sky News her organisation “provides the capacity to take on the administrative functions from parliamentarians so they can concentrate on the substance of the issues” and said money paid by clients had no connection to the amount of access or involvement they had in the APPGs.

“In relation to the different funding amounts Policy Connect receives, these reflect the size of the funding organisation to ensure a high level of diversity of supporters, and/or the interest of a funding organisation in supporting our work across multiple areas and programmes, and/or the different levels of administrative support and staff time required by different APPGs.

“Regardless of funding amount no organisation receives preferential treatment. Editorial control rests firmly with the parliamentary members of each APPG.”

Another major provider of secretariat services to APPGs is Connect Communications.

It has run the secretariats of 17 APPGs since the last general election, all of them on behalf of multiple clients – which are all declared in the parliamentary APPG register.

In its second-quarter return for the register of consultant lobbyists in 2021, the company recorded “lobbying done on behalf of” the APPGs on water, childcare, digital skills, hydrogen and apprenticeships.

It has also advertised its expertise in this area, offering courses for clients on “how to run an APPG”, including how to identify MPs to sit on an APPG and how to secure media coverage for an APPG’s work.

A website posting about a training course in 2016 says: “APPGs are increasingly seen as an effective means to shaping policy… Connect has unrivalled experience in setting up successful APPGs – come learn from us about how your organisation would benefit from working with APPGs.”

In a statement to Sky News, a spokesperson said: “Connect ensure that groups we are involved with operate in an open and transparent way, fully compliant with the strict rules set by the parliamentary authorities. It is important to note that MPs and peers set the agenda for an APPG and must approve all activity, including the involvement of outside organisations.”

The spokesperson said the lobbying the company had registered on behalf of APPGs relates to things like sending speaking invitations to ministers for an event, adding “this is a technical point and does not reflect an active ‘lobbying’ role”, and that its provision of client training for “setting up successful APPGs” has a “particular focus on ensuring compliance with the strict 32-page rule book set by the parliamentary authorities, including around the required composition of groups, with MPs and peers participating from all parties.”

In the case of both Policy Connect and Connect Communications, the APPG secretariats they provide are funded by multiple clients, but that is not always the case in other APPGs.

Wychwood Consulting runs the secretariats of a number of APPGs on behalf of single clients.

For example, it runs the recently established Central Bank and Digital Currency APPG on behalf of Portdex, a company creating a decentralized digital economy platform using blockchain technology; the Digital Identity APPG on behalf of Yogi, an ID verification company, and it also provided the secretariat for the now disbanded Business In A Pandemic World APPG on behalf of Cignpost, a COVID diagnostics firm.

While there is no suggestion Wychwood Consulting or the APPGs in question have broken any rules, some in the wider industry have raised concerns about the potential problems that could arise from having a single financial backer.

Liam Herbert, who chairs the public affairs group at the Public Relations and Communications Association (PRCA), told Sky News: “The potential problem is where you have an organisation that might be promoting one single issue from their point of view alone. That’s not the purpose of an APPG.

“The purpose of an APPG is to inform parliamentarians about a wider issue. So if you take one, your sole area of interest, and promote that through an APPG, that’s not very democratic, it’s not very clear and it’s not very transparent.”

Lobbying is not a bad word

The lobbying industry has recently started the Lobbying for Good Lobbying campaign, calling for greater openness.

Speaking to Sky News at the launch event, Gill Morris, the CEO of DevoConnect – which has provided £192,000 worth of secretariat services to six APPGs since the last election – said: “People need to understand that lobbying is not a bad word, it’s a good word.

“When you have a government of an 80-seat majority, having all-party consensus on an issue is really important … we bring a collaboration together which actually makes sense for government. I know our APPG helped influence getting more money for northern culture in the levelling-up fund. We did that. We know that.”

“Yeah, there are good ones, there are bad ones, but when we get that collaboration and bring them together it’s all-party – and that does have voice.”

Asked whether she believed some APPGs are being used to push a particular corporate agenda, Ms Morris said: “There are really good APPGs and there are others where it’s quite clear that they are a direct point of access … I think it might be true [but] I think probably, most groups do things or operate the way we do.”

Sarah Pinch, a former president of the Chartered Institute of Public Relations, said the issue with APPGs was not about how they were funded, but the activity they undertook.

“I think there are a minority of APPGs that are funded by certain organisations who are peddling their line and they are trying to unfairly influence parliamentary decisions through a system that was not set up to do that,” she said.

“APPGs are a force for good. We need to be clear and transparent about who’s involved in them, who’s funding them and who’s influencing them. Because if we’re not, we run the risk, for example, that that could be a health APPG that is funded by the sugar industry, and that is wrong.”

While the data compiled in the Westminster Accounts provides insight into the amount of funding declared by APPGs and their sources, it only captures activity that is required to be registered.

What needs to be registered?

However, there are publicly visible examples of work by private companies in relation to APPGs that do not break any rules but are not reflected in the parliamentary registers.

One example is Firehouse Communications, which cites its experience dealing with APPGs as part of its pitch to prospective clients on its website.

In a case study, the company explains how it helped an unnamed “leading offshore tax jurisdiction” achieve its policy aims around Brexit.

In its list of challenges faced by the offshore jurisdiction, Firehouse Communications notes that the APPG related to the jurisdiction was “inert”.

Explaining its strategy for assisting the offshore jurisdiction, the company says it worked to “support liaison with [the] APPG and other groups”.

However, Firehouse Communications does not appear in the APPG register or in the register of members’ interests, other than a £3,000 payment it made to Sir Michael Fallon, the former defence secretary, for a speech to a Hungarian thinktank.

Firehouse Communications told Sky News it had provided “no benefit in kind to any APPG on any basis”.

There is no suggestion any of the work it conducted was registerable.

Some in the lobbying industry, however, say the rules around what should be registered and declared should be widened to capture more of the activity that goes on in relation to APPGs.

Liam Herbert, chair of the public affairs group at the PRCA, said: “At the moment, all that is regulated are what’s called consultant lobbyists – so professional companies who do lobbying and public affairs for a living.

“But everyone lobbies and lobbying is fundamentally a central part of our democracy. But a lot of it goes unrecorded and unchallenged and unseen. So almost everybody has an opportunity to lobby. But only the industry who says we lobby for a living is currently regulated.”