The case for local democracy

As CoSLA leaders meet today to debate the Scottish Government's latest centralising proposal on care integration, I want to make the case for local democratic accountability.

 

Local democracy is the opposite of centralism. Instead of government decisions being taken at one central point, they are dispersed to councils that have been elected by local people. Services provided closer to their point of use better reflect local need and can be more effective than if provided by central government. Local citizens know best how to spend local money raised by local taxation. That is when councils are allowed to determine local taxes!

 

In recent years we have seen a gradual drift in services away from democratically elected councils to the centre in Scotland. In fairness, this is not a unique process to the current administration. In my experience ministers usually come into office believing that services are best delivered locally, but as time goes on they become ever more centralist. In part out of frustration that what they want to happen isn't happening quickly enough. We should also not underestimate the role of senior civil servants who have never quite understood the difference between local administration and local government.

 

Some recent examples include:

• Ministers came into office in 2007 committed to ending the ring fencing of budgets and they did to a large part. Then they reintroduced ring fencing by making budget allocations dependent on police numbers, pupil teacher ratio and other policies they they wanted to prioritise from the centre.
• Then we had the Council Tax freeze that takes away the power of councils to raise revenue for local priorities. Leaving them almost entirely in the hands of the ring fenced central government priorities.
• Most recently we had the centralisation of police and fire services. Even the option of a national joint board, that would also have saved £30m in VAT, was rejected because the minister concerned would have lost some political control.
• Today's discussion on health and care integration is another centralising measure with some 15% of council budgets being shifted to a Jointly Accountable Officer, subject to NHS style performance management from the centre. Councillors are treated as the equal of quango appointments made by the minister.
• Other consultations like Better Regulation are riddled with centralising elements, including the power to set regulations and control local planning. Even the community empowerment consultation invites new powers for ministers to direct the work of locally elected councils.

I could add college mergers, procurement, shared services, the growth of the quango state etc. But you get the gist.

 

In England there is the localism agenda that at first glance looks like a move to pass government decision-making to a level below local government. When in reality it is just another privatising agenda to reduce the role of the state. There are elements of this in the Scottish proposals for a Community Empowerment and Renewal Bill. The problem with community groupings is we don't know how representative they will be, their boundaries, their audit, probity and accountability.  There also an emphasis on community of place that ignores other forms, like community of interest. This is something the Christie Commission highlighted but has been forgotten in the implementation. George Jones in his commentary of English localism puts it well when he said, "Rather than setting up such amorphous entities, the Government should empower local authorities, to promote and support public involvement in their localities. After all local authorities already exist with their own ready-made governance structures, their own democratic mandate, and with 20,000 community activists called councillors in place."

 

That is not to say that we should ignore the sub-council level. Many of our councils are really regional government and I have argued elsewhere that there is a case for more councils not less. Again, Christie drew attention to the Total Place concept and UNISON Scotland has argued for services being designed from the bottom up on system thinking principles. This approach could include the budgets of all other departmental spending in local areas, so that local authorities are genuinely the government of their local communities. Increasing their powers of local taxation, not taking them away, including the return of business rates to local control. This would reduce their dependence on government grants, decentralising the Scottish Government's finance function to councils and local citizens who would then balance their spending decisions with the consequences of finding the resources.

 

An added benefit of this approach would be to make local elections matter, increase election turnouts and encourage a much more active engagement in local politics. The will for local engagement is there. The annual Democratic Audit published earlier this year showed that most people think they have far more influence over local government decisions than national government. So the public is already there.

 

Less centralisation and more local powers will encourage participation. I would argue that there is a relationship between powers and levels of local participation. If councillors and communities had more powers; people wouldn't feel so limited in getting things done. This could lead to greater involvement and, ultimately, encourage more people to vote.

CoSLA and others need to show leadership in this debate or local democracy will be lost.

Sharks in Scotland's water, again!

This week we had one of the periodic attempts to put the privatisation of Scottish Water onto the political agenda.

This time it was CBI Scotland as part of their budget submission, supported by the Tories and Liberal Democrats. In fairness to the CBI, and I don't often feel the need to be fair to them, they tell it as it is. Outright privatisation is their option and they have members in the form of, mostly overseas, private water companies who would love to get their hands on Scottish Water. The crazy regulatory system mirrors the privatised system in England and Wales and if Scottish Water was in private hands it would immediately be a takeover target  by Veolia or one of the other big players in the industry. The Reid Foundation has recently published further work by Jim and Margaret Cuthbert on utility pricing that explains this in some detail.

Willie Rennie and the Scottish Liberal Democrats popped up as usual to tell us that the solution is a Public Interest Company. I am never quite sure if they really believe that this is different to privatisation, or that they are simply ignorant of how the industry works. Mutual solutions, like a PIC, can work in people intensive services. But in a capital intensive industry like water you have to raise huge amounts of capital. Scottish Water has a £500m capital programme every year. This means the banks call the shots, not some cosmetic consumer representation on a PIC board. The banks want low risk and therefore the service delivery is privatised. This is what happens in the only UK model of this type, Welsh Water.

We are fortunate to have a broad political consensus between Scottish Labour and the SNP on this issue. I suspect John Swinney is more persuaded by the financial than the public service arguments, but that's fine because they are equally strong. Selling off Scottish Water for £1.5bn, when it has a capital value of at least £20bn, makes "selling off the family silver" something of an understatement. As the cash would then be pocketed by the Treasury - probably seals the argument as far as the Cabinet Secretary is concerned.

There is a debate to be had about Scottish Water in the context of the Hydro Nation concept. I would argue we could be much more radical here than the very modest Bill proposed by the Scottish Government. In particular, we should strengthen the democratic accountability of Scottish Water and take away the costly and damaging regulatory system. More on this in the UNISON submission to the draft Bill and consultation.

However much we may want to improve Scottish Water, our first task to to defend our public service against the sharks who would privatise it. Privatisation would result in a loss of accountability as Ministers pass the buck to a private water company that would have a legal duty to maximise share holder value at the expense of the public. The charge payer would be forced to pay for the higher costs of borrowing, billing systems etc. in addition to the cost of dividends and the fat cat salaries of Directors. The corporate financiers, consultants, regulators and others will all gain at the charge payers' expense.

So we must remain vigilant. It's Scotland's water and it's not for sale!

Demographic change

There has been a lot of media interest this weekend on the financial impact of demographic change following the call for evidence from the Scottish Parliament Finance Committee. Scotland's population aged 65 and over will increase by 21% from 2010 to 2016 and 62% by 2031. For those aged over 85 there will be an increase in the population by 38% by 2016 and 144% by 2031.

In my view there is a tendency to concentrate on the negative aspects of the ageing population. There are opportunities as well as challenges arising from the increasing number of older people. Studies at Newcastle University, amongst others, highlight that many older people are living healthier lives to a greater age which will decrease the number of years that they require care. That is after all the justification for changing the state pension age. Older people also make a productive contribution through caring and volunteering in various settings and, since the abolition of the Default Retirement Age many of them are continuing to work well beyond the previous norm of 65. Many local economies recognises the benefits of attracting the 'Grey Pound'.

It is important that we have a balanced population and there are some positive signs. Scotland’s population has been increasing for nine years reaching 5,254,800 by the middle of 2011. Despite a decrease in the number of births, this was outweighed by a decrease in the death rate and, crucially, a greater increase in the inward migration to Scotland, which has brought mainly young people, aged between 16 and 34. This is vital for economic growth and highlights the need for a different approach to immigration in Scotland.

The Committee is also concerned about the cost of public service pensions. This was addressed in Scotland in 2008, and as the Hutton Report showed, the cost of public pensions will fall from 2% of GDP to 1.8% in 2030 and 1.4% in 2060 as a consequence of those reforms. In addition, increased member contributions and switching the indexation of pensions in payment from the Retail Price Index (RPI) to the Consumer Price Index (CPI) measure of inflation, will save at least 15%. A later retirement age will make pensions even more cost effective. The real risk is UK government increases in pension contributions that could drive workers out of quality pension schemes, with the taxpayer having to pick up the bill in later years.

The Finance Committee has focussed on public service schemes, when they should also be concerned about the private sector. The shift from defined benefit (DB) to defined contribution (DC) in the UK has resulted in a general reduction in pension contributions and therefore income in retirement. Employers have taken the opportunity to reduce their contributions and this will inevitably have a negative impact on public finances. This has been highlighted by the OECD and even the Association of British Insurers. While auto-enrolment will establish a pensions floor, this is well short of the 12% minimum benchmark suggested by the industry. The fall in real wages and low confidence in pension products, including high fees, means this position is unlikely to improve. We need a radical rethink on the pension system and the Dutch model is a good starting point.

There are many other aspects of demographic change that we need to focus on including care integration, housing and the ageing workforce. However, it is not all negative and action has been taken to address many of these issues.

Better regulation?

The Scottish Government is consulting over proposals to include in a Better Regulation Bill. The basic premise is that "Better regulation is crucial to delivering sustainable economic growth and providing a favourable business environment in which companies can grow and flourish."

A proposition for which there is little evidence. In fact, even tucked away in the paper is the admission, "At this stage we have been unable to quantify costs and benefits in any proper way." This is not unusual, as one European study of better regulation initiatives concluded, "Relatively few of the initiatives included an assessment of the intended benefits regarding environmental outcomes, or cost savings to business and regulatory bodies."

Of course nobody supports unnecessarily complicated legislation. Where such problems exist they should be dealt with. However, complaints of red tape are rarely about the detail of specific legislation, instead they are a whinge about regulation in general. This is because some employers' organisations promote the myth of a 'red tape' crisis to try to dissuade governments from defining minimum standards for workers; consumer rights and safety; protection for the environment and safety. It's just a campaign for weaker laws. The UK version of this approach is specifically being used as an excuse to weaken employment rights and undermine health and safety.

The OECD has developed measures of the administrative burdens on business and whether regulation is more or less strict. The UK ranks lower than virtually any other OECD economy on all the indicators. UK government research also suggests that the methodology used for employer organisations surveys is flawed; in they are most likely to be answered by a group of small business employers who are over-pessimistic about regulation. For most businesses it simply isn't an issue.

These proposals are more than just an unnecessary sop to certain business interests. They have particular relevance to local authorities and NDPBs who carry out regulatory functions like environmental health and planning. The Scottish Government is proposing to take major powers of direction that could further undermine local democracy.

The core proposal is for new powers enabling duties to be placed on local authorities and other regulators to implement national regulation systems and policies except where a local authority makes a compelling case that local circumstances merit a variation. Effectively turning local authorities into the administrative arm of central government. UNISON has on occasion been critical of local authorities for reinventing the wheel, when some strong guidance from CoSLA would have ensured greater consistency, without undermining genuine local responses. However, the solution to that difficulty is better coordination and best practice guidelines, rather than imposition from government.

New powers are also proposed in planning, even though the system was radically reformed in 2009.  It is proposed to link the level of planning fee payable to an assessment of performance. This performance management approach is normal for quangos, but is a major interference in the role of councils. Such scrutiny is the role of democratically elected councillors.

The consultation also returns to proposals that have previously been questioned like review measures and sunsetting to ensure regulation is kept up to date, is effective and removes that which is no longer needed. It is highly questionable if these approaches are anything other than a gimmick. Particularly the 'one in, one out' approach.

All the evidence shows that businesses succeed because they have a good product or service to sell, which is delivered in a well-organised way. Such employers care little for regulation. In contrast, deregulation favours 'cowboy' employers who want to race each other to the bottom of the hill. This proposed Bill is therefore chasing the wrong target. But even more importantly, it is a further move towards centralising power away from democratically elected local authorities.

Policy Exchange housing sell off

The Right wing think tank Policy Exchange has published a report today calling for social housing worth more than average house prices in an area to be sold and the money invested in new houses. They claim this equates to some 22% of all social housing and would release £159bn. The English Housing Minister has welcomed the idea, describing it as "blindingly obvious".

Apart from the obvious practicalities of such a plan what would be the consequences? I was about to say "unforeseen consequences", but of course these right wing zealots have thought through the consequences and are very happy with them. Shirley Porter was simply ahead of her time, in their view.

The main consequence would be another round of social cleansing on top of the impact changes to Housing Benefit will have. Moving the poor and disadvantaged from rich areas into ghettos for the poor. The low paid can be bussed into privileged areas to do menial tasks, so long as they don't stay to "ruin the neighbourhood". Piling up likely Labour votes in certain constituencies and taking them from Tory marginals, is another advantage building on Shirley Porter's grand plan. The UK government are also planning to change the requirement on developers in England to provide a mix of housing in new developments, including low cost. Spot a strategy here?

However, I spot an even bigger strategy at play here. The wider aim of these zealots is to undermine universalism and turn the welfare state into a very modest safety net on the US model. If middle class support for universalism can be eroded, then the path is clear for the low, flat tax society with small government limited to simply defending the wealth and privileges of the rich.

They have spotted that support for public services is stronger when we all use them. The NHS has 90%+ approval ratings, but social housing is less than 30%. Arguably, this is because most people don't live in social housing. It can be viewed as for disadvantaged people, not "us". Social housing has the additional disadvantage of traditionally being spatially segregated. Not for us and over there. Newer social housing has focused on mixed developments to avoid spatial segregation, but this plan is aimed at stopping that development.      

This report is a good example of taking what appears to be a cost effective proposal as a response to austerity. But it's real aim is part of a clearly thought out strategy to accentuate the "them and us" approach to society and undermine the welfare state. Making it another casualty of the crash, caused by the very Neo-Liberal thinkers that are attempting to use the consequences of their ideology for political purposes.

Part-time workers and underemployment

The latest unemployment figures have opened a debate in Scotland over part-time working and I have done several media slots on this issue in recent days.

The number of people in work in Scotland rose by 12,000 over April to June, to 2.5 million, apparent good news. However, this figure is still 5,000 lower than 12 months ago. What these figures hide is the growth in part-time employment.

Scotland now has 684,000 part-time workers, up from 624,000 in the 2008-09 period, and 13,000 higher than the same period this time last year. This dramatic rise is made up mostly of male workers and has pushed the number of Scots who are part-time, but want to be full-time, to double that of the start of the recession.

Let's be clear that part-time work is fine in principle. For many workers it fits in with their lifestyle and other commitments. UNISON has long argued for flexible working and has negotiated many agreements to promote this option to those who want it. However, these figures show that part-time working is being forced on workers who don't want this option, leaving them with the same bills to pay but on lower wages. We are in effect seeing the growth of underemployment.

One caller to a radio programme I did argued that his friends thought it was great. They were earning more as part-time workers, up to £1000 per day. I was tempted to ask what planet he was living on! Most of our part-time members would welcome taking home £1000 per month. Most other callers reflected the reality of getting by on less that £150 a week, particularly those caught in the UK government's Working Tax Credit trap.

We are also seeing some unscrupulous employers exploiting part-time work. The growth of zero-hours contracts is one example of this. We see this in the care sector where employers use this type of contract to minimise their costs. Even to the extent of not paying, or not making adequate provision, for travel time. It's not only the workers who lose out. Clients get short changed on their allocated time and high staff turnover means little continuity of care.

There are also wider implications for the economy. Underemployment contributes to the low wage, insecure economy that leaves workers unable or unwilling to spend in the high street. A key feature of the recession is the lack of consumer confidence and under employment coupled with weak employment rights is a major reason why this downturn is going on and on.

The growth in self employment is another example of underemployment, not a sign of renewed entrepreneurial spirit.

So the growth in part-time working is a feature of the recession, not a positive growth in flexible working. It is being exploited by some employers and is contributing to low consumer confidence and the lengthening recession.

Keir Hardie and moral purpose

The Keir Hardie Society held a meeting in Hamilton last night in conjunction with the South Lanarkshire Branch of UNISON. This was the day after Hardie’s birthday. The rooms above the library are excellent and the library service did a fine job with their display on Hardie and his times. A great example of what a public library service can do. This all contributed to a good audience turnout.


The main speaker was to be Jimmy Hood MP, who was like Hardie a Lanarkshire miner. However, sadly Jimmy has taken ill and was in hospital - our best wishes for his recovery. His replacement was Gregg McClymont MP, who before becoming an MP taught modern British history at St Hughes College, Oxford. I have heard Gregg speak on Hardie’s life and times before and he has a detailed understanding of the period and the ability to show the relevance to political debate in Scotland today. The Society’s President, Cathy Jamieson MP added her own contribution, again with contemporary references.

While giving a general overview of the principles that drove Hardie, Gregg gave some focus to one aspect that gets little attention, what Gregg called his Puritanism. Hardie was strongly opposed to drink and gambling and the temperance movement was a strong influence, not only on Hardie, but the early Labour Party. The temperance movement in this period had a strong political edge with campaigns to close outlets and it gave opportunities to develop public speaking and debating skills. Temperance groups also gave equal status to women and Bob Holman speculates in his book that this may well have determined Hardie’s early commitment to female suffrage. In a West of Scotland context, it was one of the few areas where Catholics and Protestants could make common cause.

Gregg pointed out that this was not always an electoral strength to the early Labour Party, but it was important in the development of many Labour movement leaders including Snowden, Henderson and Tom Johnston. Cathy followed up this theme with reference to Hardie’s moral purpose and its relevance to modern politics. In the era of public outrage about tax dodging and bankers bonuses, she argued that people know when something isn’t right and proper. Political parties should reflect that moral stance. A good example, used by both speakers, is the debate over the liberalisation of gambling laws.

I was thinking about these ideas this morning when reading new research by Christian Aid that shows 56% of British adults believe, even legal tax avoidance, by multinational companies is morally wrong. Only 4% thought these practices were fair. Note the use of morally wrong. The public can and do distinguish between conduct that is “just not right” as Cathy Jamieson put it. Gregg later argued that even Margaret Thatcher may not have understood the consequences of unleashing the rapacious free market forces that subsequently brought the economy crashing down.

In this context there may be an opportunity for Labour to reflect a changing public mood by emphasising the moral purpose of socialism. Albeit in a 21st Century context and, I emphasise, this is economic morality not a drive for social conservativism. A good starting point is supporting the Christian Aid ‘Tick for Tax Justice’ petition when the Tax Justice Bus visits your area over the next few months. Keir Hardie would have been with us on the campaign to stop rich tax-dodging companies robbing people in poverty of the vital public services they need.

Chief Fire Officer

A number of media interviews today on the appointment of the Chief Fire Officer of the new centralised Fire and Rescue Service in Scotland.

Firstly, congratulations to Alasdair Hay on his appointment. The salary level is significant, but in fairness it doesn't look much out of line with similar sized jobs. The CFO post should be evaluated in the same way as other jobs in the service. What we have a problem with is the introduction of the bonus culture into the public service.

The job is not without it's challenges. We did not support taking these services away from local democratic control and Alasdair Hay will have his work cut out balancing the demands of very different communities across Scotland. He will also have the joy of a minister looking over his shoulder with powers of direction. A national service will rightly result in greater parliamentary scrutiny to plug the democratic deficit.

However, the biggest challenge is achieving an over optimistic savings target, set before a proper business case had been developed. To which you can add the payment of VAT because the Scottish Government decided to centralise services in this way.  While there are some savings from having fewer chief officers, there are significant start up costs involved in bringing together the different services. There will be job losses to meet the savings targets and I suspect that will be achieved by displacing costs onto frontline services. This is almost always the case with shared services.

So a big job with huge challenges. We will of course work constructively to make the best of this mess. But many of the problems could have been avoided with a different approach.

Integration of health and care

The Scottish Government is current consulting over their plans for the integration of adult health and social care. Proposals include changes to how adult health and social care services are planned and delivered, aiming towards a seamless experience from the perspective of the patient, service user or carer.



Proposals for the integration of health and care services go back at least to the 1970’s and post devolution the Joint Future initiative introduced the single shared assessment approach. In recent times we have seen a variety of organisational solutions, each with its own shiny new acronym – LHCC, CHP and now Health and Social Care Partnerships (HSCP). Despite these efforts joint working has not worked well in all parts of the country, although staff at the sharp end usually manage to work together. Demographic change has provided a new impetus for change with the demands on care services likely to rise in the coming years. The Scottish Parliament Health & Sport Committee report is a good overview.


The Scottish Government claims that these plans are not another “centrally directed, large-scale structural reorganisation and staff transfer”, and that any changes would be “designed and agreed locally” to suit the needs of local people. This UNISON Scotland briefing outlines the proposals but the key elements are:

• Nationally agreed outcomes across health and social care.

• Joint accountability via the Chief Executives of the Health Board and Local Authority to Ministers, NHS Chairs, Council Leaders and the public for delivery of outcomes.

• CHP’s replaced by Health and Social Care Partnerships.

• Jointly appointed accountable officer reporting to the Chief Executives of the NHS and Local Authority

• Integrated budgets for community health and social care, and for some acute hospital services

• Strong clinical and professional leadership, and engagement of the third sector, in commissioning and planning of services


As the sector digests the proposals, there are growing concerns that that these plans have not been thought through and could have wider implications. Elderly care involves much more than NHS and council care services. UNISON Scotland has outlined these in our Care Integration Statement and a more detailed response will be submitted to the consultation.


Let me highlight just a few reasons why councillors, MSP’s and health board members should look at these plans closely.


A major concern is that this is beginning to look like another centralising initiative by the Government. The democratic accountability arrangements look very weak when you consider that the new organisation will control around 15% of a local authority budget and there could be even wider service implications for health boards and councils. A few seats on a board and a jointly accountable officer is not unusual for a quango, but is no where near sufficient for democratically accounatable local authorities. Ministers will have powers to set outcomes and the “local flexibility” looks pretty limited.



One of the aims of care integration is to reduce unplanned admissions to acute services, even though the structural mechanisms for achieving this look weak. The new bodies will control some acute budgets in order to achieve this resource transfer and that could involve ward closures to an extent that may make some hospitals no longer viable. Now that might be the right decision, but hospital closure decisions should not be outsourced to a body with limited democratic accountability.


At present when an elderly person needing care is referred to hospital they are NHS patients and there are no charges. If under these plans they are provided services outwith hospital, then some charges are possible. This shifts the costs of care from the NHS, not just to councils, but to the individual. Again, this may be the right care option, but decisions like this should be made under democratic scrutiny.


These are just three reasons for looking more closely at this consultation, all with a common theme of lost local democratic accountability. The UNISON statement covers many other concerns including procurement, privatisation (including the NHS) and finance. The workforce considerations in the paper are also minimal.


All the evidence shows that top down reorganisation doesn’t achieve integration and these plans are much more prescriptive than they claim to be. A more constructive approach would be to focus on joint outcomes, with local partners agreeing operational arrangements relevant to their local circumstances.


So, if you haven’t looked at this consultation, or are involved in considering a submission, take a closer look at the direct and wider implications.