Council budget cuts - cutting through the spin

This year’s local government budget allocation has been subjected to even more political spin than usual. So here is my attempt at a bit of clarity.

The war of words in the Scottish Parliament chamber is about the Scottish Government’s draft budget and how much they have allocated to local government. That is a very important part of any council’s finances, but it isn’t the whole picture. 

Lets start with the Scottish Government’s budget allocation to local government. The 2017-18 draft budget will cut the local government budget by £327m.  

The detail of that is set out in parliament’s independent information service report and this chart shows very graphically how badly local government is hit. 

COSLA also fairly put local government funding into context when they say:

”The financial facts are straightforward on this matter:

• In 2017/18 the revenue settlement for Local Government fell by 3.6% (£349m)
• In 2017/18 Local Government’s share of the Scottish budget fell from 30.6% to 29.7%
• LG Revenue Funding as a share of SG funding has decreased by 3.7% (£1bn) between 2010/11 and 2017/18 

Make no mistake the Scottish Government has a political choice here and with additional cash of £418m for next year there was no need for such a drastic cut to Local Government.”

The Scottish government responds to attacks about cuts to local government budgets by listing funding for their key policy initiatives for example:

• £120m for pupil equality scheme 
• £140m for energy efficiency 
• £47m to mitigate the bedroom tax 
• £470m for capital funding for housing 
• £107m social care funding 

Worthy though this spending is, it has little impact on the £327m budget cut. This is because this money is ring-fenced – it’s to pay for new initiatives and so can’t be used to plug the gap caused by the budget cut. The pupil equality scheme will go straight to schools; the social care funding is to pay for the living wage in social care, much of which is provided by the third and private sectors. Capital funding doesn’t pay for day-to-day services and so on. 

The one additional source of revenue that the Scottish Government can fairly refer to (although not include in their budget) is the £111m extra revenue generated by changing the council tax bands. In addition, any council that decides to increase the council tax (capped at 3%) will also generate real income (up to £70m nationally) that will mitigate the budget cut. 

I think councils should use these powers to mitigate austerity. I understand the argument that the Scottish Government is not increasing its basic rate of income tax, but expects councils to increase the basic rate of council tax. However, as my old gran used to say, ‘two wrongs don’t make a right’ – councils should not be the local  ‘administrators of austerity’.

Even this additional council tax funding will vary council by council, depending on their housing mix. For some authorities the number of households paying more tax will outweigh those paying less through the changes to the council tax reduction scheme. In other councils with a higher proportion of low-income families and fewer expensive homes, the picture will be more challenging. 

When UNISON branches sit down with their council finance directors they will find the reality of the local budget bears little relationship to the claims made in parliament. 

The council budget starts with their allocation (in itself controversial) of the Scottish Government cuts, mitigated by the extra council tax revenue and other modest income sources. Then they will be faced with what are described as ‘unavoidable commitments’. This year the biggest of these is likely to be the Apprenticeships Levy and it is as yet unclear how much of that money, if any, will come back to local authorities to support their apprenticeship schemes. In fairness, some of the ring-fenced grants will obviate some of what would have been unavoidable commitments, like the social care living wage costs. The result of this calculation will be budget deficit.

In conclusion, the finance minister’s spin simply doesn’t match the budget reality on the ground, but opposition parties also have to accept that there is some mitigation. However, the net result will be a big cut in the real budget for every local authority, although the scale will vary between councils. This will result in service cuts and even more job losses. 

Draft Scottish energy strategy

The Scottish Government has set a 50% renewable energy target in its new draft energy strategy.

The consultation paper highlights the huge huge shifts in electricity generation in recent years, following the closure of Longannet. There has been a big increase in new supply of renewable electricity.  However, that leaves Scotland with a different kind of energy challenge; one where heat and transport take on even greater significance than electricity. 

Choices about the local supply and consumption of energy are broadening, and the patterns of energy use are also changing.  There are opportunities to shape Scotland’s future energy system, and to help tackle the challenges of climate change, affordability of energy, and the efficiency of energy use.

In parliament this afternoon the energy minister, Paul Wheelhouse said: 

"To maintain momentum, a new 2030 all energy renewables target is proposed in our energy strategy, setting an ambitious challenge to deliver the equivalent of half of Scotland's energy requirements for heat, transport and electricity from renewable energy sources. I hope that members will welcome this landmark proposal given the support shown for such an ambition last month in this chamber during the debate on support for Scotland's renewables sector."

The plan aims to deliver:

• a modern, integrated, clean energy system, delivering reliable energy supplies at an affordable price, in a market that treats all consumers fairly; and 
• a strong, low carbon economy – sharing the benefits across our communities, reducing social inequalities and creating a vibrant climate for innovation, investment and high value jobs. 

The ‘whole system’ view seeks to describe where Scotland’s energy comes from and how it is used. Energy efficiency is to be the cornerstone of this through the SEEP programme.

The ‘stable transition’ is driven by the need to further decarbonise the energy system, in line with emissions reduction targets. However, this still involves a ‘strong oil and gas sector’ and a commitment to support carbon capture. That will be challenging given that the UK government made a complete hash of pilot schemes, as highlighted by the National Audit Office recently.

The ‘smarter model of local energy provision’ means moving away from central provision to local innovation. There is considerable opportunity to create decentralised or distributed energy systems, but progress so far has been pretty slow in real community ownership. 35% of Scotland’s electricity generation still comes from our two nuclear power plants. 

The strategy repeats the commitment explore the potential to create a government owned energy company (GOEC) to help the growth of local and community projects – although still no detail. This will include empowering communities to use the income from energy development to support other communities develop their energy potential. They will also explore the creation of a Scottish Renewable Energy bond in order to allow savers to invest in and support Scotland’s renewable energy sector. 

It is important to emphasise that this is an energy strategy, not just an electricity generation plan. So heat and transport use are also important issues.

On jobs, the paper claims the renewable energy industry employs 14,000 people, with up to 43,000 in the wider low carbon and renewable energy economy. To put that in context, 125,000 are employed in oil and gas production.

There is a separate consultation published today on unconventional gas (fracking), so no decision. The paper places considerable emphasis on new energy sources and it is very difficult to see how dirty fuel from fracking fits into this strategy.

Overall, the ambition in the strategy will certainly be welcomed, although there will be some concern that the new strategy is no clearer than the old one on how it will be achieved. In particular, there is no detailed breakdown of what the future energy mix will actually be. Much of Scotland’s energy policy also remains reserved, and the strategy, predictably, if largely fairly, highlights a number of damaging decisions.

There will be a four month consultation closing on 30 May 2017.

Ethical care: good for workers and those they care for

Raising social care standards is good for workers and the people they care for.

Today, I was at North Ayrshire Council, the latest employer in Scotland to sign up to UNISON’s Ethical Care Charter. The charter commits employers to a range of Fair Work principles including; the Scottish Living Wage, travelling time, sick pay and stable employment contracts. That’s good for workers, but it’s also good for service users, because the Charter provides for proper training and time to care, based on client need.

The Ethical Care Charter was developed by UNISON at UK Level in 2012, following a survey into the working conditions of homecare workers across the UK and production of a subsequent report, “Time to Care”.  The survey responses showed “a committed but poorly paid and treated workforce which is doing its best to maintain good levels of quality care in a system that is in crisis”. The comments from workers illustrated the correlation between poor terms and conditions and lower standards of care for the clients they served. 

UNISON Scotland surveyed Scottish homecare workers and published its own report entitled, ‘Scotland: It’s time to Care’ in February 2014. We followed that up with another survey ‘We Care Do You?’ in July last year. Both surveys painted a grim picture of social care in Scotland with the majority of workers indicating that the service was not sufficient to meet the needs of the elderly and vulnerable people they cared for. In particular, they didn’t have enough time to properly address people’s needs, with budget cuts and outsourcing putting an emphasis on quantity over quality.

The race to the bottom in social care has primarily been driven by budget cuts to councils. That neglect is now being addressed through additional funding, which should at least ensure that the living wage is paid, even if funding falls short of ensuring time to care. In part, the change has been driven by a belated recognition of the impact cutting social care is having on the NHS, with hospital beds being filled by patients who should be cared for in a community setting.

Councils who sign up to the Ethical Care Charter are showing just the sort of political leadership we need in Scotland on this crucial issue. We expect seven councils will have signed up by the end of this month – leaving plenty of room for others. 

Raising employment standards will help to address the high turnover of staff in the sector, providing some much needed continuity of care. Elderly and vulnerable people in Scotland deserve the highest care standards we can provide.

Getting it right in schools

Reorganising education governance is simply a distraction from the real issues facing our schools as highlighted in UNISON Scotland’s survey of school staffs. That’s also the conclusion of a wide range of published responses to the Scottish Government’s governance consultation.

 

UNISON Scotland’s response to the consultation highlights the OECD report on Scottish education, which identifies successes and challenges in the Scottish education system and offers recommendations to drive continued improvement. The report points out that it’s time “for a bold approach that moves beyond system management in a new dynamic nearer to teacher and learning”. Instead we are seeing a continued focus on systems and governance.

 

Current education structures provide democratic accountability through local government. Parent councils and parent forums also exist to give parents a voice in their children’s schools. Local authorities also provide a balance allowing economies of scale for HR services, purchasing and specialist support. Where there are difficulties for head teachers accessing the support they need the issues are about staff shortages and budget cuts not the structures involved. Managing more bureaucracy under central direction is the last thing schools need.

 

If the government needs an example of this, then we give them one today in our publication ‘Hard Lessons’. In probably one of the biggest surveys of school support staff ever in Scotland, staff report heavier workloads, jobs cuts, lack of educational supplies, and dirtier schools. This is while pupil numbers and education support needs are increasing.

 

There are 6707 more pupils since 2010 in Scottish schools, but there 1841 less support staff and 1389 less teachers. This report confirms the enormous stress this puts on support staff.

 

54% of support staff say budgets have been cut, 40% carry out unpaid work to meet workloads, 60% say morale is low, and 80% say workloads are heavier. And services like school libraries are closing. Many report stress from the lack of training and support they receive for the tasks they are asked to carry out – like administering medicines or caring for pupils with challenging behaviour.

 

The report reveals a dedicated workforce committed to supporting children to reach their potential. Staff skip breaks and work late to meet their pupil’s needs. But they are exhausted, undervalued and under enormous pressure.

 

Any serious attempt to improve educational attainment has to start well before children get to school - that’s why early learning is so important. In UNISON Scotland’s submission to the Scottish Government’s ‘Blueprint 2020’ for early leaning and childcare, we place an emphasis on quality provision.

 

We need to make sure that we learn the lessons of the adult care sector where we now have a fragmented service, which is costly and hard for users to navigate, with varying quality of service and a race to the bottom for staff terms and conditions. The voucher schemes proposed in the consultation have a high risk of creating a service based on low paid and unqualified staff.  It risks creating a two tier system where those who can afford to pay more on top of the vouchers will have access to better nurseries than those on low incomes. Vouchers also add extra complexity and administrative costs to the system. Vouchers will do the opposite of closing the attainment gap.

 

The Scottish Government’s ambition to close the attainment gap is entirely right. However, simply moving the deck chairs didn’t work for the Titanic and it won’t work for schools. The focus should instead be on tackling the issues identified in today’s UNISON report and invest in preventative spending like early learning.

A new approach to public service reform

Since the publication of the Christie Commission report five years ago, public sector reform has been largely piecemeal and driven by austerity cuts. The debate can also drift into a contest between localism and centralism. In a paper for the Reid Foundation, I argue for a holistic approach to reform with services built upwards from integrated local delivery, while recognising that in a small country there is an important role for the centre.

The paper starts by making the case for public services as the measure of a civilised society, but also as the basis of a more equitable society and a stronger economy. I then describe the many challenges facing Scotland’s public services – primarily financial, but also the impact of our deeply unequal society and demographic change.

The public service workforce has often been an afterthought in service reform. This is a serious oversight given that workers, directly or indirectly employed, are central to service delivery. I describe the impact of austerity on the workforce and how a new approach, built around a national workforce framework, could avoid unnecessary duplication and support integration.

Scotland’s approach to public service reform has taken a different route to the rest of the UK since devolution. I describe the various initiatives including the Christie Commission report and its patchy implementation. Reforms elsewhere are also covered, along with ideas generated by academics and think tanks across the UK and in Europe.

A new approach to public service reform has to be based on a set of underlying principles. I suggest nine principles (see infographic) that all reform proposals should be tested against.

How we finance public services is a crucial issue. This involves difficult discussions around taxation, now that we have significant devolved powers. It includes a better understanding of what we mean by universalism and the importance of preventative spending. Local taxation also needs radical reform, not further tinkering. We also need a new approach to funding capital investment, away from ruinously expensive PPP schemes.

Most reform measures start with central government and then consider what powers to devolve. I propose an alternative approach that starts with recognisable communities and builds service delivery from the bottom up. Community hubs could physically site services together, breaking down the silo mentality that Christie identified. Service design would be done with citizens and front line staff adopting ideas from Systems Thinking, The Enabling State, Participatory Budgeting and Co-operative councils. This would then form the basis for a debate on the best structure for local government, the NHS and services delivered by national bodies, ensuring democratic accountability.

Where I differ with pure localism is in advocating an important role for central government - not in directing service delivery from the centre, but focusing on strategic outcomes. I would even go somewhat further than that. In a country the size of Scotland there is no value in unnecessary duplication and difference for the sake of it. National frameworks would allow local services to focus on service design without reinventing the wheel. A national workforce framework is a good example of this, possibly leading to the concept of a single public service worker.

The scale of the challenges facing public services in Scotland is immense. If they were challenging five years ago when the Christie Commission reported, they are even more so now. This paper argues that there is balanced approach to reform in a small country. We do that by building public services from the bottom up based on the principle of subsidiarity, with integration, democracy and transparency at the core of delivery. The role of central government should be to set the strategic direction and agree frameworks that allow the local to focus on what matters.

I don’t expect everyone to agree with all I say in what is not a short read! I also accept that the solutions need further development. However, I hope it’s a helpful contribution to the debate that attempts to identify solutions to the challenges facing our vital public services.

REID FOUNDATION - PUBLIC SERVICE REFORM IN SCOTLAND

A major new policy paper by Dave Watson of UNISON.

The Paper will be launched at a seminar on Friday 20 January at 10am, free to attend but registration is essential.   Register online at https://www.eventbrite.com/e/public-service-reform-in-scotland-launch-of-new-policy-paper-by-dave-watson-tickets-30926610324

The venue is Lecture Theatre 2, Appleton Tower, University of Edinburgh, 11 Crichton Street, EH8 9LE http://www.ed.ac.uk/maps/maps?building=appleton-tower

Registration tea/coffee 10.00/30 and event begins 10.30am-12.30pm.

Chairperson: Professor James Mitchell; Speaker: Dave Watson: Questions and discussion

The Foundation gratefully acknowledge the support given by the University Academy of Government in the organisation of the seminar

Happy New Year - looking forward to a better 2017

Happy New Year! If 2016 was another ‘anno horriblis’, lets hope 2017 is an ‘anno magnus’. As I demonstrate how I scraped through law school without properly learning Latin!

I don’t do predictions, but I do believe in a bit of environmental scanning for planning purposes. So, lets have a look at what 2017 is likely to throw at us.

There is little doubt that Brexit will continue to dominate public policy in the coming year. In January, the Supreme Court will decide if MPs will get a vote on the UK government’s Brexit strategy, assuming there is one. There is also an interesting new legal challenge on separating our membership of the EEA from the EU. All this could ensure greater scrutiny of how Brexit is to be delivered with as little damage as possible.

Minimising the damage should be the first priority - for the economy and the consequential impact on public spending. The OBR is forecasting UK growth will slow to 1.4% next year, and Scotland will probably do slightly worse, largely due to the weakness of the oil and gas sector. We can’t expect consumer spending to carry us through given poor wage growth. The rhetoric about ‘JAMs’ and ‘ordinary people’ will be lost in the reality of austerity and savage welfare cuts.

While parliament should triumph over the Royal Prerogative, it doesn’t mean that other matters should be ignored. The big challenges remain, including: low wages, climate change, obesity, over-mighty financial services, widening inequality and demographic change. Our democracy had a tough time finding answers to these challenges in 2016 – we all need to do much better this year. 

I wasn’t enthused to hear that the First Minister puts Brexit down as her priority. Only three Bills from the Scottish Government’s modest legislative programme have been introduced in nearly eight months since the election. You can only debate the imponderables of Brexit so much!

At least the Budget Bill will be introduced in January. This is the ‘best’ austerity year for the Scottish Government with a small increase in its budget. However, local government continues to take the biggest hit, albeit with some mitigation in its own hands through the council tax. The NHS will also continue to feel the pinch. Double counting the social care funding may make clever politics, but in reality you can’t spend the same pound twice.

The next two years of austerity is going to be even more difficult. That means many will be looking towards public service reform to plug some of the gap. We have an array of piecemeal reforms out for consultation, with few inspiring much enthusiasm. 

The attainment gap in schools wont be solved by moving the proverbial deckchairs about. Like so much else in Scotland, its inequality stupid! Expanding early years provision is just the sort of preventative spending we need. However, the value will be lost if we don’t deliver quality provision with properly qualified and fairly paid staff.

Social care is the right health priority, but it will take time to correct years of neglect. Shifting resources from acute to primary care is also the right approach, but hugely difficult to achieve.

In January the Reid Foundation will publish my paper on public service reform in Scotland. Five years on from the Christie Commission I have attempted to set out the challenges, analyze the plans and offer a different way ahead. I hope it will at least contribute to a debate that leads to a holistic approach to reform.

On the basis of the current polls, we have the potential for a change of political control after the council elections in May. What wont change are the financial and other challenges facing councils. The Scottish Government’s centralising approach needs a political response from councillors of all parties. They need to become the political champions of their communities, not simply the administrators of austerity.

There are other aspects of government policies that have the potential to improve working lives. The Fair Work agenda is one such initiative, if it can move from rhetoric into action. As a major energy union UNISON will be interested to see how the Scottish government’s new energy strategy matches the benefits of renewable energy with the problem of intermittent supply – not to mention the thorny issue of fracking. Climate change and food policy may have been pushed into the long grass, but many of us will be campaigning to keep these issues up the policy agenda.

UNISON Scotland will be busy in the New Year on most of these issues. Yes, highlighting the damage austerity is doing to our public services, but also offering constructive alternatives and practical ways to mitigate the impact. We will rightly criticise poor decisions that damage our members and the services they deliver, but we also have a duty to show that there is a better way. 

My personal New Year resolutions are sadly predictable. Eat less, get more exercise and cherish my family. Hope that Fulham’s current decent form continues and perhaps even imagine a trip to Wembley in the play-offs! I did say I didn’t do predictions!

But most of all, keep an open mind to new ideas and be optimistic that a kinder, more egalitarian spirit, can be rekindled in our country. The world could be a very dangerous place in 2017. Those of us on the left need to better articulate how we can create a peaceful, sustainable and more equal world that delivers prosperity for everyone, not just the privileged few.