Quite why sorting out MPs' expenses is proving to be so irksome is difficult to fathom. There are three principles that would seem important: cost effectiveness, transparency, and legitimacy. Most MPs need a second home and would not be seeking accommodation in London were they not an MP. To secure accommodation in London at a reasonable price, you have to rent a flat or a house. The short term flat let market is prohibitively expensive so would not provide value for money. Hotel accommodation is not practical.
What is a reasonable monthly amount to secure practical accommodation in London? I would say £1,500 seems like a reasonable amount including bills (other than business related telephone charges.) That amount is open for discussion and would only be reimbursed with receipts (less would be received if less was being paid.) If an MP wanted something more salubrious then they could fund it out of their own pocket. It should be a rule that an MP's first accommodation for which they would receive no funding other than telephone bills related to Commons business should be in their constituency. The second accommodation allowance should only apply to accommodation in London.
Furthermore, there should be exceptions. Nobody whose constituency is within commutable distance to the House of Commons should receive second home allowance. Instead, they would be reimbursed for late night travel expenses only (as other MPs would be also.) There is an argument for those MPs receiving a London weighting on their salary as other public sector workers often do. Furthermore, those MPs who have the benefit of grace and favour accommodation would not be eligible for second home allowance.
Some have suggested increasing MPs' pay as a way of cost effectively and transparently dealing with this. That is probably the easiest way of doing it. However, it wouldn't meet the legitimacy criteria in this political environment.
So, can we get on with this now please?