Two cheers for the Smith Commission

The Smith Commission report is an important step forward on the devolution journey, even if many of us who support further devolution will be disappointed over its omissions.

First of all let’s dispose of the political froth. It's impossible to know if the 'vow' has been delivered as, other than a newspaper headline, it was never clearly defined. At its worst it was the lowest common denominator between the various pro-devolution parties plans. At its best it was the highest common denominator together with some recognition that the independence referendum debate had moved the agenda on. It also appears from the polling that it had less effect on the referendum result than some claim.

What it wasn't ever going to deliver was 'Devo-max'. Quoting opinion polls on particular devolution models is a pretty pointless exercise. Outwith constitution anoraks, most voters have at best a broad understanding of what is currently devolved and have a fairly general desire for greater devolution. This is a point helpfully developed by Lord Smith in his foreword.

So what about the substance?

The permanence of the Scottish Parliament and Government together with the Sewel convention being put on a statutory footing is an important constitutional statement. As is the devolution of election law that will allow the Scottish Parliament to lower the voting age to 16. The super majority for changes to the franchise is a sensible check and balance, given the absence of a revising chamber.

The strengthening of inter-government mechanisms and a more formal consultative role is a useful step forward, although the full devolution of broadcasting and the energy market would have been a better approach. There is some devolution of energy efficiency, fuel poverty and onshore oil and gas extraction. This removes any lingering doubts over the Scottish Government’s ability to take a decision on fracking. Rail franchises are to be devolved, again removing any doubt over the power to allow public sector bids. It’s a pity that the Scottish Government acted too soon in handing the Scotrail franchise to a Dutch operator. Consumer advocacy and advice is a welcome devolution although there was a strong case for going further on consumer protection.

Pensions and Universal credit (UC) rightly remains reserved. There is only a limited devolution of Housing Benefit that falls short of separating it from UC, which would have been a much better approach. This has the potential to be an administrative mess and will limit local authorities ability to direct all housing issues in their area. A range of other benefits outwith UC are to be fully devolved and Parliament will have the power to introduce new benefits and top up existing ones.

Devolution of the work programme is welcome and will have implications for Skills Development Scotland and local authorities. The failure to also devolve the National Minimum Wage and equalities legislation is very disappointing. Tribunals are to be devolved but not the substantive laws they administer, including employment law. Again a mistake, but it should allow the Scottish Parliament to take a different approach to the iniquitous employment tribunal fees. Further consideration is to be given to operational control of health and safety, which is even weaker than the Labour Commission’s half way house.

Financial responsibility has inevitably been the focus of attention and income tax is to be devolved. This is welcome and gives the Scottish Parliament the ability to mitigate the worst effects of austerity and English public service reform, as well as a more progressive system. There are some petty and unnecessary restrictions on personal allowances, savings and dividends etc. This is clearly aimed at avoiding any future arguments over ‘English’ laws at Westminster. National Insurance is to remain reserved and this could cause difficulties as they tax similar incomes.

Assigning the first 10% of VAT is a fairly pointless cosmetic exercise as there are no powers to vary the rate. Air Passenger Duty and the Aggregates levy are to be devolved. This is sensible although there is a debate to be had over the climate change consequences. Business and consumption taxes remain reserved as UNISON and others argued.

The Barnett Formula will remain together with a fiscal framework based on a neutral starting point. This appears to be broadly what UNISON proposed, although the detail will need to be worked out. There is a complex and confusing section on enhanced borrowing powers that mentions the prudential regime we argued for, but not confirming it. The Treasury’s dead hand can clearly be seen in the many caveats in this section.

Overall, there is no doubt that this is a significant shift of powers, particularly fiscal, and the reaction from English cities illustrates that point well. For those like UNISON who argued for a more radical programme, there are important omissions. Energy, employment, equalities and others should be devolved if the Commission had applied the subsidiarity test we argued for. The failure to properly devolve the administration of Housing Benefit, damages what is other wise a sensible package of welfare devolution.

While outwith his remit, Lord Smith makes a helpful statement on the importance of devolution beyond Holyrood to local communities. He also makes the case for parliamentary reform to strengthen scrutiny.

The next stage is to turn the Heads of Agreement into draft clauses by 25 January 2015. However, there should be a broader public engagement exercise to consider this agreement. An opportunity to correct the shortcomings in what is otherwise a fairly reasonable compromise agreement.

 

 

Legislative programme. The good, the bad and the process

The Scottish Government's legislative programme is the predictable mixed bag. Some positive bits, some prospects of action and some significant disappointments.

The eye catcher was land reform. Not as radical as the review group recommended, but the proposals were helped by the bleating from the landowners - who can be guaranteed to make even modest plans sound radical. The business rate anomaly is a genuinely positive step forward.

An independent commission to find a new way forward on local government finance is at least a welcome recognition that we need to find a political consensus on this difficult issue, something that UNISON has called for. Given that the Burt Commission has already done the heavy lifting on this issue, I hope the timescale can be shortened. The Poll Tax debts bill is a nice bit of political froth, given that more people will 'disappear' from the register due to the single person discount than any council chasing poll tax defaulters.

Commitments on NHS funding are all well and good, but continuing the regressive Council Tax freeze means that councils will continue to take the brunt of cuts. The small business bonus remains a waste of resource, with no evidence that it's done anything for jobs or investment. A few pennies for delayed discharge, especially when councils are expected to match the funding, will do nothing for the national disgrace that is our social care system. Some very modest support for carers is of course welcome, but the big issues are simply ducked.

Devolution of powers to the islands looks promising. It would be even better if this was extended to all local government, rather than the centralising tendency! Community Justice to local government is welcome, although we need to watch carefully for ministerial powers of direction, to ensure that this is proper local accountability, not just administration.

More cash for the Scottish Living Wage accreditation scheme is welcome along with more ambitious targets. The big gap is on procurement and the statutory guidance is promised "in the next year". There is no excuse for the delay in getting on with this now - next year sounds like very long grass. The Fair Work Convention and Scottish Business Pledge is a welcome statement of intent that a better approach to industrial relations is possible in Scotland. A practical implementation test would be the inclusion of union representatives on public bodies, as recommended by the Mather Commission.

Strengthening childcare, improving literacy and access to Higher Education are all important elements of a meaningful social justice agenda. So is access to further education, something missing from the statement. Modern apprentices are not always all they should be. Abolishing tuition fees is the right policy, but it hasn't done much for widening access. So setting targets and a commission is at least a process step forward.

Finally, we had the tired rhetoric of the 1000 extra police officer target. Police officers sitting behind desks, substituting for police civilians who do a better job at a fraction of the cost is absurd. Then to moan about VAT, when they had an opportunity to structure the new force in such a way to avoid this additional cost, is rank hypocrisy.

In summary, as is often the case with this government, today's statement was stronger on process than substance. However, there are aspects of the process that at least point in the right direction and offer up the prospects of better policy on some key issues.

Coalition against Ineos fracking plans

Fracking is back in the news with the announcement that Ineos, the owners of the Grangemouth plant, has £640 million plans for shale gas exploration and appraisal. It already has two licences for extracting from under the ground near its Grangemouth refinery, but is applying for more in Scotland and the north of England.

Ineos is facing strong community protests on the grounds that the techniques are unproven and risky. Others argue that Scotland should be focusing on clean energy rather than fossil fuels.

A coalition led by Concerned Communities of Falkirk (CCoF) and Friends Of The Earth Scotland, including the trade union UNISON, are demanding a moratorium on unconventional gas development in Scotland, saying risks to public health, staff and the environment are "impossible to regulate away."

Labour's shadow energy minister Tom Greatrex, said: "Shale gas extraction cannot go ahead unless we have a system of robust environmental regulation and comprehensive inspection." He also accused the Coalition Government of sidelining legitimate environmental concerns.

Top scientists have also warned that fracking will not stop climate change and could lead to 11% higher greenhouse gas emissions by 2050. They identify a possible scenario that the boom in shale gas may have no effect on carbon dioxide pouring into the atmosphere over the long term. Five computer models assessing the impact on global warming projected that, despite natural gas consumption increasing by up to 170 per cent by 2050, changes in CO2 emissions would range from a 2 per cent reduction to an 11 per cent increase.

Ineos is offering the prospect of cash for land owners and communities. In addition they are banking on the Scottish Government not opposing the exploitation of unconventional gas. It looks as if they might get their way because the Scottish Government has avoided opposing this extraction in principle. They have sought to distract attention from this position by campaigning for devolution of the reserved powers over exploration. Ineos might attract more support if they had better industrial relations and paid their taxes in the UK rather than dodging them by registering in Switzerland

A Survation poll commissioned by the Scottish Greens, found 66.1 per cent said controls on shale oil and gas exploration should come to Scotland, with 18.2 per cent believing they should stay with the UK Government. Many submissions to the Smith Commission have also argued for this

So while there is a consensus on devolution, the Scottish Government already has planning powers that could end the prospect of fracking in Scotland now. They have used these powers to stop new nuclear power stations, but not fracking. Simply put, Ineos are making this level of investment because they are confident that the Scottish Government is not going to stand in their way.

 

 

Progressive polices will bring voters back to Scottish Labour

My Gran used to say, ‘all politicians are the same’ and as a consequence voted for the candidate whose eye brows were the furthest apart. While the eye brow test may be unique, sadly, her view of politicians is something every party canvasser has heard many times on the doorstep.

As ballot papers for the Scottish Labour leadership election drop through the letterbox this week, we do at least have a real contrast in both approach and policy. The polls make grim reading and anyone who really thinks Scottish Labour can recover simply by improving spin and presentation, is now bordering on the delusional.

This was reinforced to me in a series of discussions with UNISON members recently. The points I reflected in my last blog post on this issue were repeated many times. Another of my Gran’s favourite sayings was, ‘fine words butter no parsnips’, meaning that fine words count for nothing and that action means more than flattery or promises. Her words were a recurring theme, put in more direct 21stC language by member after member. They are fed up with vague generalities and want action. I was thinking she, and they, might have had a few choice words for one of the candidates in last night’s BBC hustings on this point!

That leads me to the question of policy. Yesterday’s Survation poll shows a growing number of voters saying that they would shift their support back to Labour, if the Labour Party supported the sort policies advocated by Neil Findlay and Katy Clark. 

The main findings of the poll are that:

•          A policy of a mandatory living wage would make 37% more likely to vote Labour

•          A commitment to permanently abolishing tuition fees for university education in Scotland would make 30% more likely to vote Labour

•          Promising to decommission the Trident nuclear weapons system would make 30% more likely to vote Labour

•          A policy to re-nationalise Scottish rail services would make 27% more likely to vote Labour

•          Promising free nursery places for children from the age of 12 months would make 21% more likely to vote Labour

From my own discussions with members I would add housing. Neil’s pledge to build 50,000 social houses for rent was just the specific and necessary action they were looking for – particularly the younger members who see no way into decent housing.

These numbers really matter because on current polling data, just defending the core vote won’t be nearly enough – even allowing for the likely bounce back when a new leader is elected. As Survation says: “This poll of SNP voters suggests that all is not lost for Labour if the party adopts a number of bold and progressive measures”.

Neil and Katy are arguing for just such a radical programme. They are credible, because they haven’t just produced them for this campaign, contradicting their past voting record. They have been longstanding advocates of change. In Scotland these are now mainstream views. If they look left wing to some, well that simply reflects how far away from the mainstream they have moved.

It’s politics as usual that will lose Scotland for Labour. We need to win back the missing Labour voters and we will do that, not with professional politicians, but with authentic leaders promoting radical policies that will make a real difference to people’s lives. That’s why I am voting for Neil Findlay and Katy Clark.  

Trade union members can show their support for Neil and Katy at Change for Working Scotland.

Why I am supporting Neil Findlay for Scottish Labour Leader

Scottish Labour needs an authentic voice to win back support and that's why I am supporting Neil Findlay as the next Leader of Scottish Labour.

The days when voters could be won with spin and little substance are long gone. Professional politicians have a lexicon all of their own. They are listening, even when they patently are not. They are in favour of good things and against bad. They care about 'hard working families' and other such meaningless banalities. So when they say they are concerned about 'social justice' or 'children and families', voters say fine but what are you actually going to do. In contrast, Neil Findlay says, 'we will build 50,000 homes and ensure everyone is paid a living wage'. Straight talking and practical solutions. Of course we are listening, but we are going to do something about the gross inequalities in our society as well.

The other problem with the spin culture in the Labour Party is that it's all too often directed, not at political opponents, but at comrades. The constant briefing against Johann Lamont in recent months 'by friends of' is just the latest example. If Neil Findlay has something to say to you, he says it to your face. We need a leader who will lead by example on this point.

To Neil, politics isn't some game or a profession to be learned in student politics and refined as a parliamentary researcher. He was a bricklayer, who benefited from a real apprenticeship and then used the opportunities a Labour government provided to become a housing officer and then a teacher. His politics were forged in his own working class community, refined as a local councillor and a shadow minister, and he has never abandoned them. That's why his passion comes through, not in glib sound bites, but in the language people understand.

I have seen so many professional politicians talk to our members and when they move away the member says, "they were very nice, but what are they actually going to do?" When the Daily Mail attacked the 'wit and wisdom of comrade Neil', the reaction of most people I spoke to was - that's brilliant. I particular liked his retort to a Tory MSP on Thatcher's record on mine closures, he said, "Presiding Officer, you will have to excuse me as I wipe the vomit from my chin having listened to Murdo Fraser's rewriting of history". Most of our supporters hearing that would be cheering!

I have a lot of respect for Jim Murphy's achievements in winning and holding a constituency that would be safe Tory seat in England. However, Newton Mearns is not typical Scotland. We have to win back support in Glasgow, Clydebank and many other areas that have very different problems. The 20 year old 'New Labour' textbook just won't hack it any more. 'Triangulation' only starts to work if you have a core base to triangulate on. Labour is at risk of losing that base and we have to start by offering real solutions.

Ever since the New Labour era, many Labour politicians sound timid and unsure. Predistribution is the right policy, but instead of just asking bad employers if they would stop taxpayer subsidised poverty pay - we should say, 'we will raise the minimum wage to the living wage'. Instead of saying, 'we will see if we can build a few more houses' - we should say, 'we will build the 10,000 homes a year Shelter say we need'. And by the way neither of these policies need have a net impact on public spending.

Now, some people say the 'New Labour' textbook has worked for the SNP. Of course they have adopted much of it and there is often a gap between their rhetoric and delivery. However, the difference is that they can and do blame any and all delivery failure on wicked Westminster - although even this will wear thin eventually. I would also say, is power without purpose what most of us joined the Labour Party for? No, we want power and we want to do something with it.

Neil also comes without negative political baggage. Labour's political opponents can't say, he voted for or did any of the unpopular policies associated with past Labour governments. This means he can focus on the future, not spend all his time defending the past.

It is not surprising that the establishment is not supporting Neil. His politics are a challenge to the politics as usual that they are comfortable with. But Neil is no wide eyed 'leftie', he can be just as scathing about fantasy politics on the left as he is when attacking the real enemies of working people. He can build a broad coalition of support for a fairer and more equal Scotland, because many of those doing well can understand that a more equal society benefits everyone.

Neil Findlay is not a perfectly groomed professional politician, with a ready sound bite for every occasion. But in the current political environment that's a strength, not a weakness. He's the real thing. An authentic politician of the sort that Labour used to produce in droves - before politics became a career choice. That's why I am supporting Neil Findlay for Leader and I hope you will too.

 

 

 

 

 

Diversifing energy ownership needs a more radical approach

Community energy provides an opportunity to diversify Scotland's energy ownership from the dominance of big energy companies. The Scottish Government has published a Community Energy Statement that sets out the measures they are taking to encourage the development of community energy.

The Scottish Government's ambition for community energy is that it provides an opportunity to spread the benefits of the rich energy resource with which Scotland is blessed. Support for community projects reflects their importance in empowering communities to take control of their own destiny and make the most of their own local resources.

Community energy covers a spectrum of activity – from direct ownership of energy assets, through joint ventures to community benefits payments. These enable communities to take a stake in the full range of heat and electricity generating technologies, from onshore wind, to solar PV and solar thermal, hydro, biomass and heat pumps.

 

The ambition is to see a fairly modest 500 MW of renewables in community and local ownership by 2020. This has been independently estimated to create some £2.2 billion over the operational lifetime of those projects. There is already 285 MW operating in 2013, including 43 MW of community energy. Most benefit comes from community benefit payments made by commercial developers. In the past 12 months this amounts to about £6 million from over 3 GW of (mainly) onshore wind schemes. While the cash is no doubt welcome to the communities concerned, this is not community ownership.

Support for community energy is currently delivered through the Community and Renewable Energy Scheme (CARES) delivered by Local Energy Scotland, and the Renewable Energy Investment Fund (REIF) delivered by Scottish Investment Bank. These schemes provide funding and technical support. While these initiatives are welcome, fully functioning direct ownership is limited to small scale, mostly rural hydro and wind farms.

Continuing down this path is unlikely to deliver a radical change in energy ownership in Scotland. There are substantial barriers to this form of community ownership as the Statement recognises. Not the least of which is the UK government's volatile energy policy. Long term investment in energy needs a stable pricing regime. Another is the speed of connection to the grid, something that other European countries accelerate through public ownership of the grid.

Experience from Europe indicates that to make serious steps in diversifying ownership requires new public sector entrants to the market, primarily local authorities, although Scottish Water could also be a bigger player. The Statement recognises that the formation of Local Authority Energy Supply Companies (ESCOs) may be an opportunity to improve competition and offer a wider range of tariffs. CARES support has recently been awarded to Comhairle nan Eilean Siar to explore the potential to establish an Outer Hebrides Energy Supply Company (ESCO), which could enter the UK electricity market in 2016-2017 retailing green Hebridean electricity to local and export markets.

The next big step requires new municipal entrants to the energy market in urban areas. Cities should be engaging in the energy supply market where this can support efforts to tackle energy affordability and promote local generation. The Institute for Public Policy Research paper 'City Energy, A new Powerhouse for Britain', July 2014 showed one way forward.

This Scottish Government Statement is a reasonable description of the relatively small scale efforts made to date to encourage community energy ownership. However, the ambition is modest, lacking proposals to seriously diversify ownership in Scotland. The next big step requires support for local authorities to return to their 19th century role as an energy provider. They can do this on their own or in partnership with cooperatives. This model brings significant benefits to communities across Europe with lower energy prices and income generation for public services. I set out this approach in more detail in the energy chapter of the Red Paper on Scotland.

For all the words in this latest publication the reader is left with the overwhelming impression that the Scottish Government is not in the business of taking on the big energy companies. As they have not been over energy retail prices. A few rural wind farms in community ownership is not going to make the radical diversification we really need.  

 

 

 

This blog is cross posted at Utilities Scotland

NHS Scotland is under financial pressure and it's going to get worse

NHS in Scotland is facing significant pressures at the same time as having to make major changes to services to meet future needs. That's the key message from the latest Audit Scotland report on NHS finances.

This infographic sums up the pressures.

They also found evidence that NHS boards are finding it increasingly difficult to cope with these pressures. NHS boards’ revenue budgets increased by just over one per cent in real terms in 2013/14, and smaller real terms increases are planned from 2014/15 onwards. Cost pressures, such as the growing costs of drugs and other health technologies exacerbate this tight financial situation. This table shows that while spending overall has increased in cash terms, spending per head of population has decreased since 2009/10.

While resources are falling in real terms, the demands on the NHS are increasing. This is as a result of demographic change, particularly the growing population of elderly and very elderly people; the number of people with long-term health conditions; and people’s rising expectations of healthcare. Audit Scotland conclude that it will be challenging for the NHS to make the scale of changes required over the next few years to meet the 2020 Vision strategy. In particular, progress has been slow in moving more care into the community - a process not helped by council budget cuts. They point to pinch points in the complex health and care system with only three boards meeting the delayed discharge targets. It remains to be seen if health and care integration will tackle these.

While all NHS boards met their financial targets, several required additional funding from the Scottish Government or relied on non-recurring savings to break even. NHS Highland, NHS Orkney and NHS 24 had particular difficulties. Five boards are relying on non-recurring savings to meet efficiency targets. A classic indication of NHS cost pressures is the backlog of maintenance required to ensure that hospitals and other buildings are fit for purpose. In 2012, the Scottish Government forecast that the cost of this backlog would decrease by £174 million by 2013, from £948 million to £774 million. The actual reduction was £90 million, to £858 million.

The NHS capital budget available to boards fell by 21% between 2012/13 and 2013/14, from £605.5 million to £481.3 million. In a separate announcement the Scottish Government has announced a big PPP/PFI programme. This expensive form of finance is funded from revenue.

In addition, despite significant efforts, the NHS did not meet some key waiting time targets in 2013/14. The report highlights a range of pressures including a significant increase in outpatient appointments. Audit Scotland argue that the current level of focus on meeting waiting time targets may not be sustainable when combined with additional pressures of increasing demand and tightening budgets.

There has been a reduction in the number of hospital beds across Scotland. Between 2008/09 and 2012/13, the average number of available staffed beds in acute specialties reduced by 7% (1,144 beds); the number of acute surgical beds fell by 11% (596 beds); and the number of acute medical beds fell by 5% (313 beds). The main reason given for this reduction is the growth in day surgery.

The report highlights a range of staffing pressures, particularly amongst medical staff. NHS Scotland spent £128 million on bank and agency nursing and midwifery staff in 2013/14, an increase of 15% since 2012/13. Spending on agency staff increased by 46%, to £9.3 million. This follows a rise of 62% the previous year, reversing the trend of falls in spending on agency nurses since 2008/09. Agency staff are likely to be more expensive than bank nurses, and also pose a greater potential risk to patient safety and the quality of care.

Overall, this report gives a good overview of the financial state of NHS Scotland and its constituent boards, shorn of the usual spin. In short, it's tough now, but it's going to get a lot worse.

 

 

Let's be bolder on tackling poverty pay during Living Wage Week

During Living Wage Week we should focus on ensuring that the 400,000 workers in Scotland on poverty pay are paid the living wage.

The idea behind a living wage is very simple. A worker should be paid enough to live decently and to adequately provide for their family. It helps prevent in-work poverty and ensures workers are not exploited through low wages.

The Scottish Living Wage is good news for workers as they get higher wages that also improves their health and job motivation. It’s good for employers because it reduces turnover, improves productivity and attracts better staff through reputational gain. The wider community benefits through lower benefit cost, less stress on the NHS and cash into the local economy. The Institute of Fiscal studies has calculated sub-living wage employers cost the taxpayer £6bn a year in in-work benefits alone. The indirect cost on poverty is around £25bn a year.

This year’s Living Wage Week got off to a good start with a 20p increase in the rate to £7.85. That means a much needed pay rise for those on the living wage. That includes most of the public sector in Scotland and a growing number of private sector employers who have signed up voluntarily. The energy company SSE has been a champion of the living wage in Scotland this year and they have been joined by high profile firms including Nationwide and Heart of Midlothian Football Club. Celtic have yet to follow, but there is a great grass roots campaign pressing them at every opportunity.

Of course its women who are the main victims of poverty pay. Today is Equal Pay Day, marking the point at which women working full-time effectively stop earning as they are paid £5,200 (15.7%) less per year, on average, than men working full-time. Equal Pay Day for women working part-time was way back on 28 August. Research published last week by the World Economic Forum revealed that the UK has fallen out of the top 20 most gender-equal countries in the world for the first time after women’s incomes fell by £2,700 over the past year. The UK is now behind Nicaragua, Bulgaria and Burundi for women having an equal chance of a good education, career and health. And it’s not just women. Young workers, part-timers and black workers are all more likely to be on poverty pay.

The Scottish Government is to be commended for including the Scottish Living Wage in their pay policy and for supporting the Scottish Living Wage accreditation initiative. However, it is through procurement that they could do much more to extend the scope of the living wage in Scotland. Promises were made during the passage of the Procurement (S) Act that have not been delivered. Our experience on the ground shows that public bodies are not even abiding by the current rules - so we need to get a move on with developing the statutory guidance. In this briefing I set out how we could make progress now.

Labour also needs to be more radical. Ed Miliband’s plan to raise the National Minimum Wage (NMW) to £8 by 2020, won’t do a lot for workers below the living wage after you take into account rising inflation. UNISON and others, in submissions to the Smith Commission, have argued for the devolution of labour regulation including the NMW.

 

Scottish Labour, under a Leader like Neil Findlay, could be much bolder. Helping families out of poverty and saving the taxpayer from subsidising bad employers.