Scottish budget ducks tax and shunts austerity to councils

If yesterday’s budget is “a Scottish response to austerity” then we are in very deep trouble. A response to austerity has to be more than simply administering George Osborne’s efforts to wreck our public services.

Let's start by acknowledging that the root cause of the problem is Tory austerity. The Chancellor’s Autumn Statement confirmed that public expenditure in Scotland faces year-on-year real term reductions. By 2020 
it will be 12.5% lower in real terms than when the Conservatives came
 to power in 2010. This is the equivalent of one pound in every eight being cut by 2020.

There are also further commitments on Scotland’s public services including around £250m in payroll costs due to the UK government increase in National Insurance contributions. At the time he announced these increases he vaguely suggested that the savings to the Treasury would be recycled into public services. I said then that ‘pigs might fly’, and true to form they haven’t.

This leaves John Swinney with some difficult choices on tax and spending. A real response to austerity would have looked at growing the spending envelope by increasing tax revenues. I am not unsympathetic to his argument against using the Calman powers on income tax, because there will be no power to introduce variable rates until the new Scotland Act powers are implemented in 2017. As many of us argued, this was the big flaw in the Calman compromise. There is a welcome new 3% LBTT supplement on second homes, although it is less clear why properties below £40,000 are exempt, or why the supplement isn’t larger. Other Scottish taxes only increase with inflation.

Far from increasing taxes when new powers arrive, they announced a 50% cut in Air Passenger Duty. This is not only bad for the environment, just days after the FM’s Paris climate change rhetoric, but it also amounts to even more middle class welfare. A 50% cut in APD would put an additional 60,000 tons of CO2 into the atmosphere. It's also a social justice issue because half the public doesn’t fly. No prizes for guessing which half.

The big cop out was the Council Tax freeze. Even George Osborne recognised the pressures on social care by promoting an increase in the Council Tax in England that is likely to raise £2bn. An equivalent in Scotland would expand the spending envelope, and together with the money he is routing through health, would start to make an impact on Scotland’s very real social care crisis. The problem with routing £250m of funding through the NHS is that health boards, with some justification, will argue that they need an equivalent to the English NHS increase and therefore will find every way possible to avoid passing all the funds on. The recent Audit Scotland report on integration includes all the warning signs.

While any tax freeze is popular, most people understand that it can’t go on forever. If the Scottish Government want’s to support income, there are more progressive ways of doing this than a tax freeze that helps wealthy households the most. It is the most disadvantaged who pay for this tax freeze through cuts in services and increased charges.

The big loser in yesterday’s budget is local government. The budget is cut by 3.5% or £500m in cash terms. On top of that there are additional commitments like the NI increases that could double that cut. CoSLA calculates this will cost 15,000 jobs or ‘the equivalent of 50 Tata Steelworks’ – but don’t expect a taskforce!

A cynic might take the view that the Scottish Government is simply outsourcing the most difficult cuts to councils – the ‘not me guv’ strategy. References in the budget document to reform, including shared services, are not going to plug the gap. When will politicians learn that more centralisation simply doesn’t work.

I spotted a related announcement in England yesterday that is worth watching. There is a plan to devolve Attendance Allowance (AA) to English councils. When free care for the elderly was introduced the Scottish Government argued that they should get the savings this policy created for AA. Unsurprisingly, the Treasury said no. However, if they devolve this funding there should be Barnett consequentials of some £500m. Not all of this would be ‘new’ to Scotland, but it could provide a source of some additional funds for social care.

There is little good news for the rest of the public sector in the budget. Food Standards Scotland faces a significant cut, so check your xmas dinner because regulatory and funding cuts means inspection and enforcement are being cut. The Fair work, skills and training budget is cut by £13m in real terms. The Tories and Liberals who like to portray Scottish Water as a burden on the budget, might like to note that it will make a positive contribution to the budget of nearly £100m.

Education and police budgets largely flatline. For education, the Scottish Funding Council faces a small real terms funding cut of £23m. The Scottish Police Authority budget is also cut by £12m in real terms although mostly on capital spending. There is a welcome £4m uplift for community justice services. Fire and Rescue has a somewhat larger cut of nearly £20m in real terms.

Iain Macwhirter makes some valid points on why silence on tax is a ‘counsel of despair’ in today’s Herald. He said: “The Scottish political classes like to boast their progressive credentials and they vie with each other in their hatred of the evil Tories. But they are all for social justice just as long as it doesn't mean increasing taxes.”

A proper Scottish response to austerity would be to have a serious national conversation about tax. Yesterday’s budget ducked the big issues and simply shunted austerity down to councils.   

Why the Presiding Officer is wrong on the anti-Union Bill and what Parliament should do about it

At last night’s STUC event in Glasgow, a packed Concert hall heard just why Scotland overwhelmingly opposes the Anti-Union Bill. It showcased all that is great about our movement. From the community justice campaigns highlighted by Aamer Anwar, to the work of young trade unionists in the Better than Zero campaign - tackling the bad bosses who exploit young workers.

It also showed the breadth of political opposition, with Chris Stephens MP and Nicola Sturgeon setting out the SNP’s opposition to the Bill at Westminster and Holyrood. Followed by Jenny Marra MSP for Scottish Labour and, of course, the finale with Jeremy Corbyn. This was classic Corbyn. Reminding us of us of the movement’s history, while raising our eyes to what a different future could look like – Jez We Certainly Can!

Sadly, in the cold light of a dreich day we have the Scottish Parliament’s Presiding officer, raining on the campaign with her letter ruling that a Legislative Consent Motion (LCM) opposing the Bill is not a competent motion.

The LCM is an important part of the campaign in Scotland because it puts the Scottish Parliament into the legislative process. Amendments at Westminster are fine, as are proposals to devolve employment law. However, the timing and the parliamentary arithmetic are against us. With that strategy we are pleading with the Tories – with an LCM we are negotiating with the full political backing of Scotland’s parliament. It is also a more effective contribution to the UK wide campaign against the Bill because it could force the UK Government to amend its provisions.

Another Presiding Officer might have recognised the mood of parliament and used some imagination. George Reid come back, all is forgiven! The clerks have churned out typically conservative advice. They have been blinded by the Bill’s amendment of TULRCA, an Act that is specifically reserved to Westminster in the Scotland Act 1998. This was a deliberate Tory strategy, in part to obviate the need for an LCM they knew they would never get. The Trade Union Bill’s provisions create whole new clauses that didn’t have to go into TULRCA.

Just because that is where they chose to put it doesn’t make it a reserved matter. If the Tories placed new duties on NHS Scotland in a defence bill, it wouldn’t make it a reserved matter. The weakest part of the Presiding Officer’s letter is the claim that the Bill doesn’t impact on Scottish Ministers executive competence. As UK ministers have admitted, this Bill provides for ministers running English departments, like health and local government, to be able to direct the work of Scottish councils and health boards. There can be no clearer example of why at least parts of the Trade Union Bill are clearly devolved.

So, what should Parliament do next? If the Scottish Parliament’s Standing orders are the problem – they should be amended.

One option is to amend Rule 3.1 to give Parliament, say on a two-thirds

majority, the power to challenge a ruling of the Presiding Officer on a motion. There is nothing in s19 or s22 or Schedule 3 of the Scotland Act 1998 that debars this. This is the normal approach in most standing orders and the Scottish Parliament is only following the Westminster procedure in this instant.

  

In the alternative, parliament could amend the Standing Orders to allow Scottish Ministers (or an MSP) to table an LCM in circumstances where they believed one of the tests of a relevant bill has been met. It would then be for parliament, not the Presiding Officer, to agree or otherwise that the tests for an LCM have been met.

There are wider reasons for doing this than simply the Trade Union Bill. The current Standing Orders were drafted in the expectation that the UK government would abide by the spirit and the letter of the Sewell convention - in cases like this that they would initiate an LCM.

This is the first majority Tory government since devolution and they are not playing by the unwritten rules of a parliamentary convention. The Devolution Practice Note says that the UK government should consult where legislation has implications, not just actual legislative competence, and they didn’t. This demonstrates their bad faith. In these circumstances the Scottish Parliament has to have a mechanism for challenging the UK government’s bad behaviour.

Another concern for Parliament should be a conflict of laws. The Trade Union Bill places the Scottish Government and public bodies across Scotland in a potential breach of the Human Rights Act because the Scotland Act requires devolved compliance with that Act’s provisions. Parliament needs a mechanism to raise these matters with Westminster.

As last night’s event demonstrated, there is a great broad based campaign against the Anti-Union Bill in Scotland - in the same way that we opposed the Poll Tax and other measures that challenge our sense of fairness. We must not allow a quirk of parliamentary procedure to stop our Parliament from challenging the legislative competence of the Bill where it impinges on devolved matters.

Jez and others reminded us last night of our history – the scribbling of clerks would not have stopped the giants of our movement. We don’t want another debate – we want our MSPs to take decisive action. Don’t let us down!

Time to get serious about social care

While sound and fury explodes all around us on NHS spending, spare a thought for the crisis in Scotland's social care system.

Today, I was in parliament for the launch of the Commission for the Provision of Quality Care in Scotland report. The Commission was established by Neil Findlay MSP when he was Shadow Cabinet for Health and Wellbeing with the aim of reviewing how we can improve the way adult social care is delivered. It was Chaired by David Kelly who was a Director of one of the first Community Health and Care Partnerships in Scotland and brought together all the main stakeholders.

The strength of this Commission and the earlier one on health inequalities is two fold. Firstly, they address issues that don't get nearly enough attention in the Scottish health debate, that at times seems obsessed by A&E waiting times to exclusion of all else! Secondly, Neil was very clear in his remit that he didn't just want another analysis of the issues (something we are very good at in Scotland), he wanted solutions. Even if the solutions might be politically difficult.

The report starts with a stark assessment of the current position. We have an ageing population with an increase in multi-morbidity and long term conditions. In disadvantaged areas the most common co-morbidity is mental health and this combination has a strong association with health inequalities and negative outcomes for individuals and families.

These additional demands bring with them associated costs. The report estimates a real term increase of up to £2bn per annum will be required by our health and social care system by 2025. With a small growth in the size of the overall population this is likely to place an increasing tax burden on the working age population. The recent IPPR report reinforces this point.

During the years of Tory austerity the Scottish NHS budget has had a degree of protection at the expense of other public services including social care.This approach has failed to recognise the inextricably linked relationship between acute hospital care and care in the community. The consequences can be seen in the numbers of patients blocking beds in our hospitals and a £5million increase in the amount councils are having to generate from charging income for social care in order to compensate for the financial shortfalls.

The report describes the complex and frankly inadequate ways the quality of care is assessed in Scotland. UNISON Scotland's 'Time to Care' report starkly set out the views of care staff over the quality of care they are forced to deliver. While in the main health and social care services are provided good levels of quality, there are still too many examples of poor quality. The report concludes that general trends about quality cannot be ignored. In particular, the connection between the quality of staffing, working conditions, and quality of care is a matter of primary importance.

The workforce chapter seeks to address a key component of this. The Commission recognises that more than anything else, the payment of the living wage and a general improvement of terms and conditions will be required to deliver a social care workforce consistent with our aspirations for quality care. This view is shared by the evidence submitted to the Commission from both trade unions and employers across the public, private and voluntary sectors. The contracting race to the bottom in care provision has to stop.

Since the report was written the social care crisis has if anything got worse and today councils and providers in England are making similar points. We have residential and homecare providers in in very difficult financial circumstances, drawing on reserves and some are struggling to meet even day to day cash flow. Others have significant vacancy rates and increasing staff turnover. Social workers in care of the elderly teams report that it is becoming increasingly difficult to find a provider to deliver care packages in some parts of the country.

Pay is but one element of fair work. The Commission commends UNISON's Ethical Care Charter that includes the wider considerations that commissioners of home care should account for when contracting. These include training, induction, travel time, ending zero-hours contracts and most importantly ensuring that there is time to care.

The Scottish Government's standard response to concerns about social care is to refer to the new Integrated Joint Board's that aim to provide a seamless care service. While the Commission supports this approach, it recognises that this structural change will not in itself be enough. The recent Audit Scotland report confirms this. Despite the Kerr report and much talk about preventative spending, we have not been able to break the public perception that everyone should have a district general hospital within ten minutes of their house – nor the political pressure to satisfy that thirst.

The Commission argues that a top-down approach to the commissioning of services will fail to deliver responsive care and support. The report places an emphasis on getting locality planning right building on the knowledge and capacity of local people about their own wellbeing. It also recognises that best practice needs to be supported and rewarded. Equally, there is a need to work with poorly performing locality teams to improve outcomes. We need to recognise that not all differences in outcomes are down to differential resources. It can reflect poor leadership, organisation and bad practice.

Housing provision also needs to change if we are to address the needs of an ageing population. All too often, a person will move from their family home into a care home via a period in hospital.This is partly because of the lack of suitable alternatives at local level. We need to build new, affordable and sustainable housing, with a range of house types and sizes that encourages mobility in the housing system and enables downsizing for those that wish it. Housing support services currently play a small, but significant, role in supporting older people to remain living at home and needs to be expanded.

A key recommendation of the Commission is that we fundamentally rearticulate the basic social contract between the citizen and state based on the principle of reciprocity.That people contribute to the wider social good through payment of tax and direct contribution to care and support – and in return people receive high quality care and support when they need it and irrespective of their financial circumstances. This means addressing the current differences between services free at the point of use such as healthcare and some social care, but not for those under the age of 65.

As such, the Commission arrives at a new and more robust social contract: the responsibility of the state is to ensure that citizens with personal care needs receive that care free at the point of use; and that citizens are otherwise responsible for their daily living costs and additional support requirements, funded from personal wealth or income, or for those citizens who are less well off, from welfare support.

Finally, the Commission addresses the question of funding. A properly funded and organised social care system would actually save money. For example, a bed in a District General Hospital costs in the order of £2,500 per week, as compared with £500-£800 per week for a care home and even less for home care. The Commission points to work done elsewhere in the UK on the options for addressing the funding gap, something we have simply ducked in Scotland. A national conversation needs to be informed by a detailed examination of the spending gap and how that might be funded. The Commission makes no claim that its work is sufficiently detailed to be a definitive statement on this issue. However, they do say that it is sufficiently large that it cannot be wished away or ignored.

The value of this Commission report is that it does more than simply analyse the scale of the problem, important though that it is if we as citizens are to grasp the importance of social care. The Commission goes much further in describing what a quality care might look like and how it should be delivered. It also doesn't duck the need for a new social contract and the necessary conversation about funding.

 

Lessons from Oldham for the Blairite Tendency

There has been little so entertaining this week as reading the bemused response to the Oldham by-election result in the mainstream media. All those ‘Corbyn must go’ stories had to binned and a whole raft of explanations dreamt up to explain why it didn’t go to script.

Just for the record, Labour’s candidate Jim McMahon secured a 10,722-vote majority over UKIP's John Bickley, and a 62% vote share that was higher than at the general election. Yes, that’s right, a 7.5% increase in the share of the vote.

Of course Labour had a good local candidate, as we should, and of course the campaign played to those strengths. However, this victory was on the back of a well funded UKIP campaign that talked about little else than Jeremy Corbyn – during a week when he was being vilified for his stance on bombing Syria. A campaign that played to some stereotypes about white working class voters, which I thought were very effectively dealt with in this article by Harris Beider.

Yesterday morning I came very close to cancelling my Guardian membership. This fine newspaper’s news coverage of Jeremy since his leadership victory has been very poor, sometimes almost as bad as the Tory tabloids. But its news piece on the result was a new low – nothing positive about Jeremy, it was all down to other factors. It showed all the signs of the panic rewrite I mentioned above.

I was also opposed to the decision to bomb Syria. I wouldn’t have explained my reasons in quite the same way as Jeremy because I have no problem in principle with military action. I just don’t think it would work and Cameron’s case for war is very weak, not least his fanciful 75,000 ground troops claim. I accept that we do on occasion have to meet evil with force as our socialist forefathers did in the Spanish Civil War. But even so, I thought Hilary Benn’s attempt to claim this is a war against fascism, was very weak.

Sadly, I had to turn to the Daily Mail for a credible analysis, one that I suspect played equally strongly with the voters of Oldham. Peter Oborne, no fan of Jeremy’s, said:

“Whether or not you like Mr Corbyn (and I profoundly disagree with many of his policies), there is no denying that he emerged from the arguments over Syria as a man of moral courage, integrity and principle. Indeed, how interesting that after months of denigrating Corbyn, the Blairite tendency — together with those excitable inhabitants of the Westminster bubble — have been made to look silly in their prediction that Labour would lose the Oldham by-election. In the real world, it seems the voters have more time for the Labour leader than the metropolitan commentariat.”

The ‘Blairite Tendency’, as Oborne puts it, can be guaranteed to pop up whenever a rent a quote is required to attack the Labour Leader. Even some of those who lost their seats in the General Election, show little sign of any humility or taking responsibility for their contribution to that defeat. I rather enjoyed this blogger’s theory that certain members of the PLP have narcissist tendencies.

Today we have Carolyn Flint attacking Momentum in the Independent. Sorry, but I must have missed her criticism of Progress – a real party within a party, with minimal internal democracy and millionaire funding. Jeremy has rightly condemned abuse, but not all the stories turned out to be true, such as the mythical protest outside Stella Creasy's house. What actually happened is explained in this post at Left Futures.

And for those MPs who think they can launch a coup in the summer, Tom Quinn’s explanation of the party mechanics should be required reading. As I have frequently pointed out, the Labour Party rules are poorly drafted, but it is hard to find fault with this interpretation on Labour List.

That’s not to say I am uncritical of Jeremy’s leadership. In particular, some of the messaging has been ill disciplined. The conversational style is fine in small groups, but addressing the mass media requires clear lines that are tested carefully so that they are less easily misinterpreted.

At least in Scotland we have a leadership that has recognised the benefits of a different approach to politics. Kez Dugdale wears her ideology light and is by no means a natural supporter of Jeremy’s. None the less, her measured, team building approach has accommodated the change rather than confronting it. Today's interview in the Guardian is an honest reflection on her own and Scottish Labour’s position that I think most people will respect.

So, it may be wishful thinking, but let’s at least hope that the Oldham result will give those narcissistic MPs some food for thought. Time for a bit more campaigning with the party than against it. I can but wish!