Hume Institute on public service pay

The David Hume Institute has published a paper on ‘Public Sector Remuneration in Scotland’. It includes a series of essays that describe how public sector remuneration is developed and the need for reform in the context of constitutional change. It claims to ‘start the process of careful consideration based on informed, rigorous and objective analysis’. Sadly, the paper falls somewhat short of this laudable objective.

The opening essay sets the tone by repeating, uncritically, many well worn neo-liberal economic myths about public sector pay and the private sector including the infamous crowding out argument, “Higher wages in the public sector makes it more difficult for the private sector to attract workers”. Comparisons are made without a rigorous study of the reasons for differences. For example the authors have not considered differences in the level of outsourcing in their comparisons with South-East England or in other sections.

 

There is little acknowledgement that most expenditure cuts in Scotland have been achieved by cutting the real wages and jobs of public service workers. There is also virtually no analysis of the importance of pay, particularly the low paid, on local economies and the positive role public policy in this area can play. The Scottish Living Wage is barely mentioned.

 

The paper does include some objective analysis from contributors like Alastair Hatchett of IDS. He dispels common myths about private sector bargaining structures highlighting the  mistaken belief in HM Treasury that all private sector companies set pay with reference to local labour markets. Something lost on other contributors who have a fairytale view of bargaining. Probably because few of them have much actual experience!

Other contributors offer reasonably factual essays with some useful analysis. Stephen Boyd’s paper effectively demolishes the case for regional or local pay;

"Consistent with the anti-intellectual zeitgeist, these increasingly orthodox views on public sector remuneration as rehearsed by economists, media commentators and politicians tend to be asserted; rarely are they justified by recourse to evidence. Commentators seldom pause to reflect on whether the concept of ‘typical’ worker in either sector is even appropriate in analytical terms or helpful in developing public policy. Rarer still is consideration of potential negative macroeconomic effects flowing from falling public sector remuneration."

He also deals effectively with that other Neo-Liberal pay myth, performance related pay;

"In most modern workplaces both public and private, characterised by complexity and high levels of interdependence, there is no evidence to show that performance related pay achieves anything beyond incentivising bankers to disguise risk as value creation. On the contrary, research on motivation at work emphatically confirms the 50 year old dictum of psychologist Frederick Herzburg: if you want people to do a good job, give them a good job to do"The essay on reform of pay setting does cover issues that are being discussed with regards Scottish and UK pay bargaining. But again it does so in an academic way without any real understanding of what is happening in the real world. 

The essay on pensions also lacks balance and confuses the Treasury's cash grab with proper negotiation over cost sharing. Those Scottish agreements are ignored probably because the author again has no first hand knowledge.  There is no mention of the £2bn cash surplus every year in the NHS pension scheme. Private sector accounting standards are not the same as real cash liabilities. A fact that anyone with actual experience of pension negotiations in the public and private sector learns very quickly. 

Overall there is little effort at balance and this is reflected in the media promotion by the Institute. In addition to the one-sided economic perspective, there are three papers by employers, including two predictable rants from the CBI and IoD.  The tone of the paper is reflected in the language used. It describes better pay for low paid women workers as an ‘overpayment’ or the 'overpaid' as if this was almost illegal rather than a legitimate public policy choice. This is linked to the extraordinary and misleading claim that the public sector ‘pay freeze’ does not apply to lower paid workers. This will come as something of a surprise to thousands of public sector workers in Scotland!

In summary, while there is a case for considering how public sector remuneration is developed, particularly in the context of constitutional change, the David Hume Institute, with its right wing ideological position, is not the body to offer an objective platform for such a debate.

Strange case of a health board contract

A lot of interest today in the strange case of a contract NHS Lothian's former Chief Executive placed with a management consultancy firm. There was a suggestion that he was taking up an appointment with this firm, but it appears that this is no longer the case.

It appears that the contract was for finding spare capacity in the private sector to treat NHS patients to assist with the management of waiting times. NHS Lothian has been the subject of an investigation into its management of waiting lists recently. The firm in question is HD Partners and the contract was worth £75,000.

The facts are somewhat difficult to verify as the firm in question is difficult to contact. A number of journalists have tried very hard to even find the firm. The BBC's Eleanor Bradford, who broke the story, called the number on their website to be told that nobody had heard of them!

All of this leaves a number of questions to be answered.

- Why was the private sector being used in the first place?

- If there wasn't any in-house capacity, why use an intermediary? There are only a limited number of possible suppliers for these services within a reasonable distance. You could quickly contact them directly. £75k would pay for a lot of operations.

- What contractual procedures were followed? Was this contract specified and tendered for? What Best Value assessment was undertaken?

- What due diligence was undertaken of HD Partners? Are they an approved contractor? What is their expertise?

- What employment contract provisions does NHS Lothian require to limit the possibility of senior staff taking up appointments with firms they have approved contracts with? For instance is there a gap requirement?

The use of private hospitals for this type of initiative is much rarer in Scotland than in England. The costs are substantial and the track record mixed. Never the less, it is a fairly straightforward procurement exercise that shouldn't require the employment of management consultants. The Cabinet Secretary will no doubt already be making, what is becoming a regular trip, to NHS Lothian for answers to these questions. We will await answers with interest!

Beecroft report

Most media interviews I have dealt with over last two days have focussed on the Beecroft Report. This is the report, commissioned by David Cameron, by venture capitalist Adrian Beecroft proposing that employment regulations are blocking Britain’s economic growth.
 

You have to start by wondering why Beecroft was commissioned to write this report in the first place. As an asset stripping venture capitalist he knows plenty about wrecking jobs, but no obvious qualifications in creating or maintaining them. Of course he is a major Tory donor and the man behind Wonga loans, who have just been warned by the OFT over threatening debt collecting tactics. No doubt the next ‘red tape’ he will be recommending that the government get rid of.

 

The report itself appears to have gone through some political revisions. The draft version published by the Telegraph has some significant variations from the version hurriedly published by the government last night. Three proposals were removed after being submitted to No10 before it was sent to the Business Department. They called for the Government to delay plans to introduce flexible working for parents, to abandon proposals to allow all workers to request flexible working, and to remove regulations surrounding the employment of children. Clearly even David Cameron thought forcing children up chimneys again was a step too far!

 

Then the report had some difficulty within the ConDem coalition. Vince Cable described it in short as “bonkers”. The longer version was, “Businesses are much more concerned about access to finance or weak demand than they are about this issue.” Nick Clegg took a similar line with "I don't support them and I never have. I've not seen any evidence that creating industrial-scale insecurity amongst millions of workers is a way of securing new jobs.”

 

So much for the politics, how would the plan for compensated no fault dismissals impact on the workplace? Essentially employers will end up paying more directly in terms of workers taking more complex (uncapped compensation) discrimination claims which carry a higher potential legal and reputational risk and indirectly through the continued acceptance of inefficient management practices.

The CIPD's Katerina Rüdiger puts it clearly, “Headline grabbing proposals which call for making it easier to 'sack the slackers' are at risk of masking the real question we should be asking: why are so many UK workers still underperforming? The reason is not stringent employment legislation - indeed the UK has one of the most de-regulated labour markets across OECD countries - but a crisis of management and leadership skills.”

The Channel 4 fact check gives a good summary of the evidence, something completely missing from the Beecroft report. They conclude the reports main assertion, “just doesn’t stack up, according to those who have researched the matter.”

Only bad ineffective employers believe in hiring and firing at will. Even the government’s own survey shows that only 6% of employers regard employment rights as a barrier to growth. We have some of the weakest employment laws in Europe and these proposals will do nothing to encourage confidence and growth. David Cameron should spend more time talking to those who understand the world of work, and less to his dinner party chums.

Police Staffs - when the facts change......

I was in Parliament yesterday for the justice debate on police staff cuts. The debate was on a Scottish Labour motion that called on “the Scottish Government to undertake an independent audit of cuts implemented or planned to civilian posts and report the outcome to the Parliament.”


1000 police staff posts have already gone and up to 3000 more are planned to go following the introduction of the new national police force. As a consequence police officers are already being taken off operational duties to cover these posts. If we carry on this way up to 2000 police officers could be spending all or part of their time doing jobs they are not qualified to do, at twice the cost.

As the madness of this policy has been pointed out to the Scottish Government by just about every police organisation, why do they persist in digging this deep hole?

The SNP came up with a manifesto commitment to put 1000 extra police officers on the beat. Fine populist line and actually could have been achieved without employing any additional officers. Just take the legions of police officers who are already doing police staff jobs and put them back into operational roles. But no, instead they then turned the extra 1000 posts into a mantra of 17234 police officers in Scotland. Even this, in the budgetary circumstances of the time, could have been managed. Grossly inefficient, but probably doable.

The problem is they have stuck with this into the new national force and slapped on a huge savings target based on a dodgy outline business plan. The full business plan won’t even be ready until the Bill is passed. This means you can’t make savings from the 75% of the budget spent on police officers, you have to make almost all the savings from the 15% of the budget that pays for police staffs.

SNP MSP’s yesterday were very keen to talk about what’s happening in England. Yes, we all agree that the Westminster cuts are wrong and that probably applies to policing cuts in England as well. Although it has to be said that English forces have a better track record on modernising staffing structures than most Scottish forces. The ‘traditions and cultures’ as one MSP put it are not an excuse for one Scottish force having a third of its staff civilianised (equivalent to England) and another only a quarter. Some cultures are outdated or just wrong and need to be challenged.

If there is a comparison with England it is in the approach of the PM to the economy. “I am not for turning”, even when circumstances change, could equally be applied to the Scottish Government on this issue. Even the Defence Secretary changed course on carrier aircraft, “when the facts changed”. The facts, budget and national police force have changed here - so that should be the cue for a change of policy.

The rapid programme of de-civilianisation in Scotland is not always understood by those outside the police family. So let me illustrate with a recent story told to me, not by a UNISON Steward, but by a senior detective. He was involved in a fraud investigation and he asked for a forensic accountant and a clerk to help with the number crunching that is essential in a fraud case. None were available and instead he was sent a sergeant and a constable. He explained the task and returned the following day to find the two officers sitting in front of a computer with a pad of paper and a calculator. When he asked why they weren’t using a spreadsheet, they explained that they didn’t know how to do that. This simple data entry task would have been done by a civilian clerk in a fraction of the time and at less than half the salary. Not to mention the small matter of getting a successful conviction.

The issue boils down to the concept of Best Value as included in the Police & Fire Reform Bill. The Justice Committee report quotes my key argument on this point:

“260. A large number of witnesses believe that there needs to be a balanced workforce, with duties being undertaken by the most appropriate person regardless of whether that be a police officer or a civilian member of staff.214 Mr Watson said—

“In five or six years, we will be sitting round a table like this with Audit Scotland, who will say that the situation is ridiculous because we are paying police officers, at great cost, to do jobs that they are not qualified to do. We should not wait until then. Let us take the opportunity of the establishment of a new police force to consider the right balance between police officers and civilians.”

The Cabinet Secretary didn’t even bother to explain yesterday in his summing up why he was opposed to an independent audit. He knows full well what it would find. When the facts change, clever politicians change with them.

Council elections

As the dust settles on last week’s council elections time for a few reflections.


Lets start with the election results. The main story of the election was the collapse of the Liberal Democrat vote. Last year, the SNP gained most from the Liberal Democrats’ collapse, this time the distribution was much more even. The trick in an STV election system is getting the number of candidates right. At the last election, the SNP had 83% of its candidates elected, but in this election it got 69% in. Scottish Labour, improved its election rate from 67% to 79%, suggesting it was better at gauging its own support, or just more realistic. I think John Curtice’s summary is about right;

“Overall, there was evidently hardly a cigarette paper between Labour and the SNP, as compared with the long run of Scottish electoral history that still represents a considerable achievement by the Nationalists. But as compared with where we were just 12 months ago, it is difficult to avoid the impression that it does not represent something of a setback. Certainly, as compared with the position a week ago, it is Labour, not the SNP, who have gained most from this latest verdict from the ballot box.”

There was an attempt by some commentators to rain on Labour’s parade. But no amount of number crunching can hide the fact that this was a significant comeback from last year. Politics is about momentum and comparisons with 2011 are more important than 2007. I thought Johann Lamont’s interviews over last weekend hit just the right tone. This was a good result, but Labour shouldn’t get carried away - there is much more to do both politically and organisationally.

Overall turnout was low, but not as low as had been feared and higher than the 32% in England. The media coverage was mixed at national level and limited by balanced coverage at local level. De-selected councillors and twitter musings do not make an election. However, at the least the debate was not totally lost in national issues as it was when held on the same day as parliamentary elections.

UNISON Scotland has long argued for council elections to be decoupled to allow for a focus on local government. In fact it was one of the few times we have supported a Tory Member’s Bill. I recall a meeting with Brian Monteith (when he was an MSP) at which he exclaimed his pleasure at this rare occurrence, to which I responded that we had many more policies, such as public ownership, that we could work on together. He didn’t sound too enthusiastic!

The number of female councillors marginally increased from 22% to 24.3%, still well below the 40% in England. Scottish Labour’s positive action programme did at least deliver a decent increase in female councillors from 17% to 26%, demonstrating again that positive action does work.

No joy for the fascists with the BNP (Britannica) & (Scottish)NF vote falling yet again to tiny proportions. Only nine votes in one ward, typically 20 to 30 votes. The austerity rise of fascism in France and Greece thankfully not translating into Scotland.

Post election the horse trading starts, and while not finalised everywhere, there has been a remarkable level of change in the leadership of Scotland’s local authorities. The main beneficiaries have been Scottish Labour who look like leading most of Scotland’s councils. Iain MacWhirter claims “It’s all about tribalism”. This view is a bit naive and simply ignores the consequences of the STV system. Naïve because it is inevitable that parties who are the main contestants in an area will be a little bruised and therefore less willing to engage with their main opponents. The personal always counts in politics and relationships with councillors from smaller parties are often better.

It is also a simple fact that the outcome in many Scottish councils are large Labour and SNP groups and the only way of running the council is an agreement, formal or otherwise, with smaller parties. In these circumstances a Labour/SNP deal would leave the council without an effective opposition. The usual cybernat nonsense about “direction from English bosses” wasn’t even the case when local government matters were in the UK Labour rulebook. After last year’s devolution of the rulebook, coalition approvals are now firmly the responsibility of the Scottish Labour Party’s Local Government Committee.

I do agree with Iain that coalition deals with the SNP make much more sense in policy terms and they would be my personal preference. The Edinburgh deal makes a lot of sense as does the arrangements in East Renfrewshire and Highland. I would predict that these will not be the only ones, depending on the outcome of negotiations. However, the electoral arithmetic in many councils limits the opportunities for such arrangements.

What we are seeing in coalition agreements is a real focus on jobs, apprenticeships, poverty, inequality, housing and the living wage. Being in power when budgets are being slashed may be something of a poisoned chalice, but to pinch a climate change term, mitigation is as important as adaptation.

So while there is an element of tribalism in all parties, in my experience this is rarely the determining factor in cutting coalition deals. The forthcoming referendum may be factor in some councillors views, but the overall approach is far more pragmatic. Getting as much of your manifesto implemented as possible, so you can deliver for the communities you seek to serve.