Welcome to my Blog

I was the Head of Policy and Public Affairs at UNISON Scotland until my retirement in September 2018. I now work on several policy development projects, so all views are very definitely my own. You can also follow me on Twitter. I hope you find this blog interesting and I would welcome your comments.

Thursday, 30 May 2019

Rethinking how to deliver budgets

Instead of just tinkering around the edges of the Scottish and UK budgets, we should radically rethink how to deliver them.

A couple of months ago I blogged about a new book by Katherine Trebeck and Jeremy Williams, 'The Economics of Arrival', which invites us to consider a future where economic progress might not mean endless growth. This involves not just changes in economic strategy but setting different budget priorities. 

The authors are not naive about the political challenges such an approach entails, and so they recommend an evolutionary approach. Having a bright idea is one thing, getting a government to do it is another. However, it would appear that at least one government is prepared to make some steps in this direction.

New Zealand's Labour coalition government has unveiled its "world-first" wellbeing budget. Straight out of the 'Economics of Arrival' play sheet, the Finance Minister said many New Zealanders were not benefiting from a growing economy in their daily lives, and this year's budget had been designed to address the increasing disparity between the haves and have-nots. Budget spending is focused on long-standing problems like mental health, child poverty and sexual violence.

Another interesting international development is Portugal, even if not strictly in the wellbeing sense. In return for a bailout, the European Union imposed privatisations and cuts in salaries, social security and services on Portugal – what we would call 'austerity', through a centre-right Portuguese government. 

A left-wing coalition government decided to take a different approach by scrapping austerity. Recently privatised companies were re-nationalised, the minimum wage rose by 20%, four national holidays were re-established, and pensions were unfrozen. There were some targeted tax cuts, although taxes went up on some luxury items. 

A new report on the economic effect of these policies says it achieved a return of economic growth. This was 4.3% in 2016/2017 after falling 7.9% during the austerity measures. Unemployment fell from 17.5% in 2013 to 7.4% now and the public deficit reduced from 3.1% of GDP in 2015 to virtually zero now – the UK’s deficit is 1.9% of GDP. Prime Minister Costa told the Financial TimesWe have shown that it is possible to raise incomes, lift private investment, cut unemployment and still have sound public finances.”

Of course, this is what many of us argued when austerity was implemented in the UK, but Costa has shown there really is a better way. With 14 million people in the UK locked into poverty, we could have adopted different policies. As the UN Special Rapporteur recently put it; “The imposition of austerity was an ideological project designed to radically reshape the relationship between the Government and the citizenry. UK standards of wellbeing have descended precipitately in a remarkably short period of time, as a result of deliberate policy choices made when many other options were available.”

Tax is an essential element of any budget, and there has been a debate about the impact of tax on reducing inequality.  A new report by the IFS says it does have an effect in conjunction with benefits. They said: “The tax and benefit system significantly reduce the gap between rich and poor, with benefits playing a particularly big role. However, contrary to the ONS’s claim, taxes do also reduce inequality. But the bigger picture is that what matters for income inequality is the progressivity of the tax and benefit system as a whole, and not a specific part of it. The Government should achieve its desired amount of redistribution using those parts of the tax and benefit system best suited to that particular job."

So, as we start the discussion about the next UK and Scottish budgets, let's have a look at the above evidence and think about a wellbeing budget that scraps austerity and reduces inequality. All we need is a bit of political will.

Monday, 29 April 2019

Putting the 'Public' back into Scottish Water

Scottish Water is a public corporation, accountable to Scottish Ministers and parliament. It was created in 2002 by a merger of three regional water authorities. This contrasts with the privatised service in England, which has seen high charges and massive payouts to shareholders and executives - not to mention running out of water. Scottish Water's average household charge is £1 a day lower than the average for England and Wales, despite having higher costs due to geography and structure.

This public service status needs restating because Scottish Water does not always act as a public service.

Scottish Water bosses have a nasty habit, internally at least, of referring to ‘The Company'. This is not only factually inaccurate but reflects a culture and a desire (from some board members and senior staff) to become one. Efforts to privatise Scottish Water are rarely far from the surface. Commercial interests lobby for it and political support is not entrenched as various back door attempts have been made over the years. At times, only the inability to recoup the capital investment in the sale price, which in any case would probably go to the Treasury, has kept the service in public ownership. If Scottish Water were a company its balance sheet and gearing would make it an attractive takeover prospect.

Then we have executive remuneration. The 2017/18 accounts state that the Chief Executive received £92,000 in bonus payments on top of his £256,000 salary. The Chief Operating Officer got a £67,000 bonus to supplement his £186,000 salary, while the Finance Director took home £66,000. The £225,000 in bonuses amounted to a near 7% rise on the top up payments enjoyed by the same three individuals twelve months earlier. The Scottish Government scrapped bonus payments in its pay policy some years ago but made an exception for Scottish Water. Needless to say, 7% pay rises are not the norm in the public sector, and senior pay is already one of the highest in Scotland's public services. 

The regulatory structure is also not appropriate for public service. Ministers set directions, but the regulatory cost system is very similar to the privatised system in England. The work of Jim Cuthbert and others have highlighted why this is not appropriate.

So, why does this matter and how would a different structure make a difference.

The Hydro Nation concept points to a much broader role for Scottish Water than only delivering water and wastewater services. Sadly, the high blown rhetoric at the launch was not translated into action act scale. A reformed Scottish Water could have a stronger international role, it could develop more significant economic spin-offs from our abundant water supply and expertise, support public health and have a more prominent role in renewable energy. It could also stop outsourcing critical services, developing in-house capability in Scotland as part of a broader industrial strategy.

The current governance structure would need to be changed. There are several options the simplest of which would be to create a Water Agency with a much broader remit, of which the utility function would be only one element. Under this structure, the regulatory role of the Water Industry Commission could be abolished with a considerable saving (£3.5m plus the mirror costs in Scottish Water). This approach would also eliminate the role of the Competition Commission and liberate its function back to Scotland. Retail competition in the non-domestic sector has resulted in few benefits, and the valuable water management role of Business Stream can continue to be delivered without so-called competition.

Another option some may argue for is a co-operative model, at least for the utility role and possibly other sub-streams. In the capital intensive water industry, any mutual body would in effect be controlled by the financial institutions. They would insist that to minimise risk to their money, services and jobs would be transferred to English and European private water companies. This is what happens at the only UK mutual model, Welsh Water. As a co-operator, if there were a viable co-operative model, I would welcome it. However, a mutual shell over a privatised industry is not a co-operative solution.

Across Europe, water services are delivered on a municipal rather than a national basis. In 2006, the STUC and water unions commissioned a paper from the University of Strathclyde and developed the ideas into a paper ‘It's Scotland's Water'. It argued for greater democratic oversight and citizen participation. Elements of this certainly could be delivered locally. Scottish Water was only created on a national basis because of the need to cross-subsidise the cost of providing services in rural areas. There are other ways of achieving this objective.

Water and wastewater services are something we take for granted. The right to water is a human right, and that right should be protected through democratic accountability. The current model of Scottish Water could be reformed to achieve much more economically with a governance structure that reflects a public sector ethos. 

Monday, 15 April 2019

More history and less economics?

“We need more historians and fewer economists”. 

This was the somewhat tongue in cheek claim made by the historian Rutger Bregman in an interview with Dan Snow on his ‘History Hit’ podcast. Bregman is the historian who hit the headlines when he took the Davros elite to task over tax. He is also the author of ‘Utopia for Realists’, which argues that throughout history it is utopian visions that have driven humanity forward. His case for historians is summed up regarding the financial crash:

“I thought that we needed historians to take the stage and explain what’s going on. When I watched the crisis on TV, the only people being interviewed were economists, and these were the guys that didn’t see it coming. I thought that we needed some historians there, so I left academia,”

He has a point, although I declare an interest as a history fan, albeit one who has written a fair bit about economics. I am also the Secretary of the Keir Hardie Society that seeks not only to remember the historical figure but also to promote his ideas in a modern context.

That is precisely what a new generation of historians seek to do. Dan Snow often asks historians to give some historical context to current affairs on his podcast. It is also not an either-or choice, as some economists use historical context effectively. I have in mind Thomas Piketty (Capital in the Twenty-First Century) and Mariana Mazzucato (The Entrepreneurial State). 

This matters because as the Spanish/American philosopher George Santayana said; “Those who cannot remember the past are condemned to repeat it”. You might also argue that those who study history can successfully repeat it. For example, I can think of more than a few generals who have successfully copied Hannibal’s double envelopment tactic at the Battle of Cannae.  

I accept this trend is not always progressive. I watched David Starkey on Politics Live last week, at his pompous, arrogant worst, as he patronised a young woman panellist.

The teaching of history in our schools has come in for some criticism. Professor Tom Devine argued some years ago that pupils are leaving school with little knowledge of their nation’s past because history is being squeezed out of the curriculum. When Scottish Ministers raised this issue, some argued this was a nationalist plot to indoctrinate young people. I didn’t agree then or now. 

Many people in Scotland would benefit from a better grasp of our history. Last year I was on the Culloden battlefield when a visitor was telling his son and me that this was where the English murdered the Scots. He wasn’t too happy when I politely pointed out that we were standing on the spot in the ‘English’ line held by the Royal Scots Fusiliers, supported in the second line by the King’s Own Scottish Borderers. And don’t even start me on Braveheart, Scottish knights fighting with Edward at Bannockburn or the recent Netflix film on a well-known descendant of the Norman French de Bruis family!    

This also plays into concerns that there has been a narrowing of subject choice in Scotland’s schools. The Scottish Parliament’s Education and Skills Committee is conducting an inquiry into that very issue. Lindsay Paterson also makes a case for a broad curriculum in yesterday's Sunday Times.

This is one of the issues raised in Scottish Labour’s current education policy consultation. That paper also asks how we can develop Scotland’s working class and labour movement archives and increase access to our industrial museums?

We have a strong heritage sector in Scotland, with good museums that strengthen our understanding of the past. My encounter at Culloden might not have been necessary if the excellent revamped visitor centre had been open. But many of our battlefields are not so well preserved. Even Culloden is threatened by development, as is Prestonpans and Transport Scotland are planning to do further damage to the Killiecrankie battle site. 

Our industrial museums operate on very modest funding levels. Local government cuts have added to the pressure on local historical facilities. The People’s Palace in Glasgow was only saved after a local campaign. It has just reopened after a £350k refurbishment, but the Winter Gardens remain closed.

The Scottish Government held a consultation last year on a draft culture strategy. The responses generally support the ambition and approach while emphasising the need to support the capacity financially. Extra funding can be levered in, but stable government funding is crucial.

Neither should we be parochial. The responses emphasised the importance of an international focus. Not just in promoting Scotland's diverse cultural assets, but in enriching and renewing our culture at home through meaningful contact and exchange with cultural policy and best practice from around the world.

That is reflected in the growing popular interest in world history. The National Trust is a large membership organisation, and historical societies of all kinds are well supported. Well written popular history helps, but it also drives broader study. I am always pleasantly surprised when picking up a book in my local library on what
even I think is an obscure historical subject, to find how many times it has been borrowed.

So, while we need both economics and history, let’s think about how we can better support our history through education, museums, sites and events. Not just to remember the past, but also for what it can tell us about the issues of today.

Tuesday, 2 April 2019

Radical climate action needs social justice and a just transition

There is a broad consensus on the need for ambitious targets on tackling climate change, but there are some differences around the edges when it comes to taking practical action.

The Climate Change (Emissions Reduction Targets) Bill is being debated in parliament today. Timely, as the Intergovernmental Panel on Climate Change is meeting in Edinburgh. I was pleased to be able to support the rally outside parliament, which included many references to the recent inspirational protests by school pupils.

This is the First Stage debate, so parliament is only considering the general principles. These mainly revolve around how ambitious the revised targets should be. Climate change campaigners, co-ordinated by Stop Climate Chaos Scotland, supported by Labour and the Greens, want the Bill to go further. SCCS are calling for a reduction in emissions of 80% (on 1990 levels) by 2030 and net zero emissions by 2045 at the latest. They also want the new legislation to provide assurances of transparency in how public funds are spent to contribute towards emissions reductions and commit to policy change to give warm homes, cleaner travel and support for greener farming.

The Scottish Government is not opposed to this in principle. The climate change minister argues in today's Scotsman that Scotland is at the forefront of global ambition on climate change. They are awaiting next month's UK Committee on Climate Change's advice on the credibility of a 100% reduction. 

The case for taking radical action is not in dispute, except for a few climate change deniers, or the subtler delayers. Denial is, as Mary Robinson described recently, not just ignorant, but ‘malign and evil’.

As the poll published by SCCS today shows, there is broad public support for climate action. 70% of respondents support Scotland taking greater action in transport, food and homes to tackle climate change. And the concern is growing, with one in three more concerned about climate change than a year ago.

So far so good. However, there have been some differences over the measures required to deliver on climate action.

For example, the Scottish Greens tabled a motion calling for a climate emergency, which called “on the Scottish Government to recognise that the policy of maximum economic recovery of oil and gas is incompatible with addressing the climate emergency.”

I would agree that the fossil fuel industry has to recognise that some reserves will have to stay in the ground if we are to achieve the necessary reductions in carbon emissions. The problem at this stage is that it is unclear how much of the existing reserves will be needed and how quickly technological developments will allow us to achieve this. Crucially, the motion omitted any mention of a Just Transition that protects jobs. Workers in the oil and gas industry have noted the absence of a Just Transition in the renewables sector, and we certainly don't want to repeat the experience of the coal industry, which blights many communities across Scotland to this day.

That is why we need to develop a new industrial strategy based on a Green Industrial Revolution that demonstrates a credible pathway to new jobs. This is an approach that a Green and Labour MP have come together on at Westminster, with their Green New Deal Bill. A statutory Just Transition Commission in the Climate Change Bill is an essential element of that approach.

Similar considerations apply to the Workplace Parking Levy. Penalising workers who have little option but to use a car to perform their duties or get to work, before we have a functioning public transport system, is not going to persuade anyone.

In essence, we need to put the horse before the cart, not the other way around. If we don't, we risk losing the argument on climate change and fuelling a backlash. The Gilets Jaunes protests were triggered by increasing fuel prices, and they were not an isolated example. Research by Davide Natalini at the Global Sustainability Institute has recorded 44 different events worldwide.

He argues that the design and implementation of new policies need to become more inclusive. The rich can buy their way out of climate action, the poor cannot. Climate policy needs to be seen as relevant for those communities if they are to support its implementation. Cash transfers, what I would call the redistribution of wealth, needs to ensure that those who cannot shift to more sustainable and expensive options quickly are supported.

There also needs to be better communication of why these measures are required to ensure the support of communities who are likely to be most affected.

The case for radical action on climate change is undeniable. But to win support for what will be a difficult transition we need to take workers and those least able to bear the cost of change with us.

Wednesday, 20 March 2019

Big challenges require radical action

It’s time to get radical if we are to address the vast challenges facing Scotland and the rest of the UK. 

Let’s start by understanding the scale of the problems facing us. In my New Year blog, I suggested four new ‘giants’:

  • Inequality. One million people in Scotland live in poverty, including 230,000 children and 140,000 pensioners. Poverty is not just a condition, it is a matter of life and death. Healthy life expectancy can vary by as much as 20 years between the most and least deprived areas of our country. 
  • Climate change. The latest UN report says we have twelve years to simply limit a climate change catastrophe, by keeping the increase in global warming below 1.5C. Our health, the economy, our diverse fauna and flora, as well as wildlife, are all at risk.
  • Disempowerment. The UK is over-centralised and too many powers stop at Holyrood while others are taken from local government. Economic power continues to be grabbed by big corporations, mostly unchecked by regulation or industrial democracy.
  • Broken society. Too much emphasis is placed on economic performance and too little on the impact on human beings and the communities of place and interest they live in. Automation at work is used to exploit the workforce rather than liberate them. Isolation, intolerance and our consumer culture are contributing to a broken society, where we patch and mend the mental health consequences, rather than tackle the root causes. 

I have been working on the Scottish Labour Party’s policy development process for the 2021 manifesto. The first stage consultation paper highlights a large number of challenges and invites members and stakeholders to suggest ideas that will develop Labour’s vision of real change.

I would argue that while Scotland has adopted some progressive policies, certainly compared with the UK government, they have all too often focused on process rather than radical action. This is the ‘safe' middle ground that the US Congresswoman Alexandria Ocasio-Cortez recently challenged. She said:

“Moderate is not a stance. It’s just an attitude towards life of, like, ‘meh.’ We’ve become so cynical, that we view … cynicism as an intellectually superior attitude, and we view ambition as youthful naivety when ... the greatest things we have ever accomplished as a society have been ambitious acts of vision. The ‘meh’ is worshipped now. For what?”

There is nothing ‘moderate' about the vast inequalities in Scotland, homeless people on our streets, the growing mental health crisis, climate change or the uncontrolled power of global corporations. The establishment tells us to be pragmatic and stick to incrementalism - when what is needed is systemic change.

Let’s take just three very recent examples of proposals for radical change.

It has taken today’s children to demand that my generation takes climate change seriously. As Phil McDuff argues, climate change is the result of our economic and industrial system – we need to re-evaluate our relationship to ownership, work and capital fundamentally. 
I wouldn’t normally regard the Scottish Land Commission as a body ready to consider radical solutions. However, today’s report says that most of the disadvantages of Scotland's current pattern of land ownership are related to a concentration of decision-making power. It noted that in some parts, that hampered economic development and caused serious and long-term harm to communities and there was an "urgent need" for mechanisms to protect fragile communities from the "irresponsible exercise of power".
Progressive think tanks like the New Economics Foundation have long argued that we need a new approach to local economies that challenge the economic orthodoxy of inward investment. Last week they built on their long-term criticism of personal allowances with a proposal that replaces those allowances with a weekly national allowance.
Radical change isn't easy for political parties. The two biggest Scottish spending budgets that could be shifted by preventative spending are acute hospitals and prisons. However, a minority of voters understand the case for moving resources and are much more likely to be concerned about ward closures and reductions in the use of custodial sentences.
The typically dismal mainstream media reaction to Richard Leonard’s conference speech on free bus travel reflects the establishment’s need to stamp on radical change. The problem they face is that policies like this are actually growing in popularity. Radical progressives are having an impact far higher than their ‘incrementalist’ peers. Just look at the way Alexandria Ocasio-Cortez’s Green New Deal has started a meaningful discussion about climate change in the USA.

So, radical change isn’t easy, but the challenges that face us deserve radical solutions. And more and more people, of all ages, are recognising that reality.

Thursday, 7 March 2019

London showing the way on fossil fuel divestment

Pension funds need to consider the long-term impacts of their investment decisions. That is particularly obvious when it comes to fossil fuel companies. The evidence is unequivocal that companies cannot burn all their reserves if the world is to avoid catastrophic climate change.

That analysis doesn’t come from a Friends of the Earth or Greenpeace briefing – it is the view of Mark Carney, the governor of the Bank of England. Others have made the moral case, he highlights the financial risks of investments in companies who could find their assets ‘stranded’ as the world acts to tackle climate change.

Last night, I was speaking at a seminar chaired by the Deputy Mayor of London, in an impressive venue, the Living Room at City Hall. I was outlining a trade union perspective on divesting fossil fuel investments from my experience in local government pension funds.

View from The Living Room in City Hall

Some London funds have already taken this decision, and others are quietly moving away from these investments. The seminar heard from Southwark Council who are one of several in London who have clear policies. Leadership from Mayor and GLA is crucial. The Sainsbury Foundation also spoke at the seminar, highlighting their helpful guide to divesting and reinvesting.

It is a sign of progress that the case for divestment as set out by Platform London, is broadly accepted. The discussion in the panel session and workgroups was around the practicalities.

I outlined the importance of action on climate change and the role of the public sector in leading by example. I described the public sector duties in the Climate Change (Scotland) Act 2009 to reduce emissions, introduce adaption measures and work sustainably. This legislation had significant cross-party support in Scotland and is currently being updated in a Bill being considered by the Scottish Parliament.

While the ambition in Scotland to tackle climate change is undeniable, action on fossil fuel divestment in Scotland has been slow. This is despite national and local campaigns and even resolutions passed by councils who are the administering authorities for pension funds. Presentations have been made to Pension Boards, and a parliamentary inquiry by the Local Government Committee highlighted the issue.

There are some barriers to action by pension funds. Officials tend to adopt a conservative approach to change and dislike what they perceive to be political considerations. Too many funds are small and don't have the expertise to consider this issue thoroughly. This is one of the reasons why Scotland is looking at a structural review, which would enable funds to develop a team with the necessary expertise. 

Fiduciary duty is often wheeled out as a last-ditch defence, and it was raised by several speakers last night. I wrote a briefing on this issue for UNISON in 2015, which explains why this shouldn’t be an issue. It cites Scottish and English Law Commission reports and an opinion from Nigel Griffiths QC. In essence, pension funds are entitled to take environmental and social issues into account so long as they do not risk material financial detriment to the fund. 

Also, pension funds are not exempt from the public law duties that apply to the administering authorities. All investments involve a degree of risk, so fiduciary duty doesn't mean taking no risks. Ethical investment is rarely any riskier than other investments, and legal challenges are rare so long as funds follow a proper process.  

UNISON has also produced a useful guide on how to divest from fossil fuels. That starts with gathering information on investments before influencing the fund's investment strategy. It is import to emphasise that the policy should not only decarbonise but also adopt positive investments in the low carbon economy. 

The discussion last night also highlighted concerns over shareholder engagement strategies and the ‘Green Wash’ produced by some companies and investment advisors. We need more genuinely fossil free funds to invest in, not vague commitments like ‘low carbon’.

The campaign to divest from these risky and unnecessary investments is making steady progress across the country. The practical experience of funds is helping that development as are the growing number of national and local campaigns. London is showing great political leadership on this issue.

Monday, 25 February 2019

The Economics of Arrival

Every month economists and commentators pour over the Gross Domestic Product (GDP) figures, and at budget times we worry about the projections published by the Fiscal Commission and the Office of Budget Responsibility. Including those great fan charts that show the wide range of forecasts that are supposed to measure economic growth.

Since the 1930s GDP has become the primary target for government and international comparison. This has led to an era of mass consumerism and an expectation of endless GDP growth. Despite what we know about the environmental impact of growth on our finely balanced planet, the solution to all our economic and social ills is apparently even more growth.

A new book by Katherine Trebeck and Jeremy Williams, ‘The Economics of Arrival’, invites us to consider a future where economic progress might not mean endless growth. In Scotland, we know Katherine best from her work at Oxfam on the Scottish economy and the Humankind Index. This book is a natural expansion of that thinking.

Before anyone dismisses this as anti-growth, the authors acknowledge the benefits that economic growth has delivered. In the decade to 2012, all countries accelerated their achievement in the Human Development Index. There have been dramatic reductions in child mortality and levels of poverty, common diseases are being controlled, and more children are attending school with a consequential increase in adult literacy. We live in an extraordinary age, and much has been achieved. 

However, you just knew there was going to be a ‘but’! Growth on its own does not automatically help people to move out of poverty. Growth only translates into real progress when resources are shared, including on collective institutions and socially constructive purposes such as health and education. 

For example, Egypt under Mubarak regularly posted growth rates of 6-7%, but 90% of the population never benefited. The United Nations Development Programme identifies different forms of negative growth. These include ‘jobless growth' that does not create employment, ‘ruthless growth' in which the rich get richer, and the poor get poorer, and ‘futureless growth' that comes at the expense of the environment.

Much of this book aims to explain how the fruits of growth are coming to an end. As we prioritise growth over security for all we are seeing an increase in the diseases of affluence, environmental degradation, and even stalling life expectancy, as the recent ScotPHO report shows. If we are in a global growth race, when do we reach the finishing line?

The authors persuasively argue that improvement in people's quality of life is not on an endless upward curve as social progress is decoupled from GDP growth. Alternative indexes show that social progress slows when countries reach middle-income status. This can drive demands for spending that equates to ‘failure demand', not dissimilar to the approach described in systems thinking.

They ask us to embrace the concept of ‘Arrival’ and making ourselves at home. Countries need to become better at focusing on the quality of the economy instead of its size - pursuing further growth risks undoing the achievements already realised. This is not a new concept. Even Adam Smith back in 1776 imagined a country that had “a full complement of riches”. 

This book does not offer a new system of post-growth economics that we can switch over to. It recognises that moving to these alternatives will be an evolutionary process. There is no grand top-down vision – it is something that people and communities need to discover together.

Making ourselves at home means sharing wealth more widely, rather than permitting a few to pathologically hoard it. Getting things right the first time and so avoiding the harm and costs that come with a blinkered focus on more. Surveys tell us that we are at our happiest when socialising and engaging in meaningful activity, not when consuming.

This does require a profound cultural shift as well as an economic and political one. Practical measures might include shifting taxation from income to luxury goods, wealth, land and unearned income. Shared and better work, ending the economic reliance on unpaid work, mostly done by women. This is also where the ‘foundational economy’ can contribute, developing a circular economy, co-operatives and new business practices. All of this has to be underpinned by a vibrant and responsive democracy.

There are some examples in the book where these principles are present. Some South American countries and, perhaps surprisingly, Japan. GDP growth in Japan stopped growing in the mid-nineties, but they score highly on almost every other measure, even though they are reluctant to accept they have arrived and challenge their work-based society. Costa Rica overperforms on alternative indexes, delivering longer life expectancy and higher wellbeing than the US, but with just one-third of the ecological footprint.

Of course, there will be massive resistance to change from those who perceive that they benefit from the current system. The authors distil Meadows ‘4 Tasks' approach:

  • ·     Highlight the failures of the current system. 
  • ·     Paint a compelling picture of what a new economic model might look like. 
  • ·     Work with people who have power in the current system, or who could gain it. 
  • ·     Support people who are seeking and delivering change themselves, and those who are open minded, leaving those who are unlikely to change where they are.

A key ingredient of change is the development of alternative measurements to GDP. There has been some work on this in Scotland and elsewhere, including the Oxfam Humankind Index for Scotland. These show that there are better ways of measuring genuine progress than a simple increase in economic activity.

No single project will change the system, but many small steps over time will. This book suggests steps for international institutions and governments. Steps for business, cities and local communities. And steps for individuals. There is no avoiding action!

In conclusion, as the authors say, the last few decades of growth have brought immense benefits, but those gains have been unevenly shared and are at risk of slipping away as the environment and society come under increasing pressure. We need to reimagine progress beyond more of the same. This book is a great starting point.

Friday, 8 February 2019

Austerity is killing us

Two reports published today show that the increase in life expectancy in Scotland has now stalled and that health inequalities have worsened.

One report compares life expectancy trends in Scotland to those seen internationally. The other report explores the relationship between stalling mortality improvements and socioeconomic inequalities.

The international comparative report shows that 2012-2016 life expectancies in Scotland increased by 2.5 weeks/year for females and 4.5 weeks/year for males, the smallest gains of any period since the early 1970s. The best estimate of when mortality rates changed to a slower rate of improvement in Scotland was the year to 2012 for males and the year to 2014 for females.  Among the UK countries Scotland has the lowest life expectancy, with a life expectancy 2 years lower for women, and 2.5 years lower for men than in England.

Of the 24 high-income countries for which data was available, nearly all had smaller life expectancy gains in 2012-2016 than in the immediately preceding period. Denmark is notable for having maintained mean life expectancy gains of around 10 weeks/year among females across the period 1997-2016, and even greater gains among males.

The second report concludes that as mortality improvements in Scotland stalled in 2012-2017, socioeconomic gradients in mortality became steeper. With increased mortality rates over this period in the most socioeconomically deprived fifth of the population.
This table shows what we already know and what additional information this reports gives us.

Dr Gerry McCartney, Head of the Public Health Observatory at NHS Health Scotland, said:

“What we see here is a worrying trend. Life expectancy not only gives an indication of how long people are likely to live, but also serves as a ‘warning light’ for the public’s health. In addition, the fact that socioeconomic position now plays a bigger role in how long you live than it did before is cause for concern.”

The question is why these figures are going in the wrong direction, bucking a long standing trend since the Second World War. Gerry suggests that austerity is the strongest factor:

 “There are likely to be a number of factors at play. The strongest candidates are recent policies that address recent economic setbacks which have reduced spending on benefits, squeezed incomes and trapped people in poverty – these may all have contributed. Cuts to council budgets and pressures on key local services, such as social care, could also have had an impact. There have been some severe flu outbreaks in recent years which will have increased demands on services too.”

He suggests three key actions:

• Protecting budgets that determine our health, like social care, housing, benefits etc. And ensuring they are provided according to need.
• Reducing poverty for all groups and protecting the most vulnerable.
• Maximise the take up of the flu vaccine.

While pension funds may regard these figures as having something of a silver lining, they are bad news for almost everyone else. Governments and policy makers should be taking particular notice, and develop appropriate responses. Austerity isn’t just damaging the economy, it is literally killing us.

Monday, 28 January 2019

The Common Good

Austerity has undermined many of the local institutions that bind our communities together. Cuts to our libraries, community learning, youth work, day centres and grants to voluntary organisations have all contributed to a sense of isolation.

While action on individual social isolation is essential, we also need to think about the role of social infrastructure. This relates to the physical conditions that determine whether personal relationships can flourish. When social infrastructure is robust, it fosters contact, mutual support, and collaboration among friends and neighbours. When degraded, it inhibits social activity, leaving families and individuals to fend for themselves.

I was brought back to this concept by reading Eric Klinenberg’s book ‘Palaces for the People: How to Build a More Equal and United Society’. He looked at two districts in Chicago after the 1995 heatwave. They had similar socio-economic characteristics, but one district had a much higher death rate. The difference wasn't cultural or about how much people cared about each other – it was that poor social infrastructure discouraged interaction and impeded mutual support.

Libraries are the best example of Klinenberg’s ‘Palaces for the People’. They are accessible and organised by professional staff that uphold a principled commitment to openness and inclusivity. A cafĂ© might be, but it depends on the degree of openness, cost etc. Similarly, an early years centre where parents meet up at the same time is social infrastructure, but not a childcare centre in a commercial area where parents pop in and out to match their working hours.

Some might argue that this is less important in the internet age. Klinenberg argues that communication technologies work best when they direct us to physical spaces that everyone can access. Ironically, the sort of areas that the tech giants create in their own workplaces. The excesses of internet culture and the ‘echo chamber' patterns of use, add to the problem. It feeds what social scientists call ‘bonding social capital’, but starves us of the ‘bridging social capital’ we need to live together.

Mark Zuckerberg’s vision of Facebook as social infrastructure is flimsy because it cannot give us what we get from churches, unions, sports clubs and the welfare state. The primary aim is to keep us glued to the screens.

Safe, green spaces are another essential part of social infrastructure. This includes parks and gardens, but also in the design of housing developments. Studies show that the greener the immediate surroundings of a building, the lower the rate of crime. Although this only works when they are well maintained and so used by residents, creating passive surveillance and feelings of greater ownership and control.

Social infrastructure is also essential for health – the more physical environmental deprivation, the worse the community’s health. For example, with the opioid crisis in the US and rising levels of poor mental health in the UK, we overlook the importance of social cohesion and social support. A 2017 Harvard study, by Michael Zoorob, shows that communities with strong social capital were more likely to be insulated from the opioid crisis. Other studies point to the value of community gardens or allotments to us. Chicago has spent $2.5m on its inspirational 21,000 square-foot City Hall roof garden. In Singapore, the open spaces associated with housing projects are used for exercise, meetings, affordable dining and markets.

Public sports and leisure facilities have been squeezed due to austerity cuts. In Iceland, they have free swimming pools or ‘hot pots’ that are used by people from all walks of life – one per 2,750 residents. Mind you, the rule that everyone must strip naked and wash off in a public area before entering the tubs, might be a reform too far for Scotland! 

Organised sports can build similar social interaction. In the UK, 80% of people who play organised sport have friends in the organisation, a much higher rate than for other organisations. Along with people who regularly attend church, they are more likely to volunteer in other civic projects.

In Scotland, we have a historical manifestation of social infrastructure in our local Common Good funds. A 2014 Scottish Government report identified more than £300m in these funds covering moveable and heritable property. These were often donated by landowners when they sold development land for towns. Several modern day tech entrepreneurs invest some of their gains into good projects, as did old ‘robber barons' like Andrew Carnegie. However, none of this is at the scale necessary to create the social infrastructure we need.  

Another feature of our crumbling social infrastructure is the decline of the high street in most of our towns. If you listen to some voices, all that is required is a cut in business rates. What we actually need is to rebuild them as social infrastructure. Doncaster is one town that is fighting back, with the opening of a new cultural and learning centre, and retail shops that offer something different. Others talk about replacing the acquisition of goods and services on the high street with local experiences. 

Community Hubs that bring together public services are another idea that could contribute to the revitalisation of our high streets. I discuss this in more detail in my Jimmy Reid Foundation paper on public service reform. 

George Monbiot highlights projects in Barking and Dagenham, including ‘maker spaces’ equipped with laser cutters and other technology. Places where people meet, discuss ideas and start projects. Turning old warehouses and churches into community facilities where people can start collaborative businesses and welcome new arrivals to the area. As George says, “Perhaps it’s not the whole answer to our many troubles. But it looks to me like a bright light in a darkening world.” 

Since the 1980s, anti-tax ideology has whittled down the public funds we need to build and maintain critical infrastructures - austerity has been the last straw. As we replace crumbling physical infrastructure, we should also consider how it might contribute towards strengthening our social infrastructure. A modern version of the Common Good.