Staffing targets are the wrong approach for public service

Staffing targets are the wrong approach to public service reform. In the run up to the UK general election, political parties are tripping over themselves with commitments on the number of nurses, police officers, teachers etc. We need a more grown up understanding of what makes a real difference to public service delivery.

 

We tell ourselves that the independence referendum was a zenith for political debate. Scotland led by example with village halls and community centre’s bulging at the seams, with families, friends and communities engaged in informed debate on social and economic policy. We say it was empowering, engaging and exciting. We are the most politically informed populace in the world.

 

If true, this has to be the time to show it. Scotland needs a grown up debate like never before. Not just where powers lie or who is more left wing or more Scottish than who? But what kind of country do we want to live in and how do we want to be governed and are we willing to make the decisions to make that happen?

 

The downside of this type of political pledge is the whole debate becomes a stats trading war on nurses, doctors, police, and teachers rather than a real debate on public service improvement.

 

Scottish Labour leader Jim Murphy kicked off with an announcement that if elected he will introduce 1,000 extra nurses. Of course our NHS needs more nurses. But the NHS is a large complex organisation seeing increased demands on the whole staff team not just in the NHS but in local government and voluntary sector too.

 

The real national disgrace in the care sector is in homecare. Today’s ‘Seen something? Say something’ campaign on adult harm is very welcome. However, we have large numbers of homecare workers scared to report abuse because they are on zero or notional hour’s contracts.

 

The NHS cannot improve if we neglect the staff who provide social and community care. Social workers, home carers, occupational therapists and others reduce queues at A&E through early intervention and they free up hospital beds by providing personal care at home.

 

It is equally ridiculous for political parties to compete on police numbers. The SNPs pledge to keep an extra 1000 police officers; or to maintain 17,234 police officers in Scotland has been a disaster.

 

If we truly are the most politically educated populace we will know that the chances of a bobby on the beat catching a house burglar as he is climbing through a window is the stuff of The Beano. Crime has been reduced to its lowest level ever by finger print officers, crime scene investigators, anti-fraud officers, intelligence analysts, forensics, custody officers, and many more working with the police. These people have high technical skills. They all help keep us safe.

 

But right now Police Scotland is cutting £1bn from the police budgets. Our police officers are politically protected so who else is going to lose out? Of course its the said civilian staff who work with Police fighting crime.

 

This is actually the worst kind of politics, and should not be tolerated by one of the most politically educated people in the world. Surely we understand that taking police officers off operational duties to cover for civilian specialists, at twice the cost, makes a mockery of Best Value?

 

Last week’s political spat was about teacher numbers. Teacher ratios are just one way of protecting educational standards. There is little point in having better teacher ratios if classroom assistants or administrative support are being cut. The Scottish Government rightly takes credit for reducing ring-fencing of local government. So why reintroduce a policy that says we in Edinburgh know best how to deliver education in every community.

 

It’s another unhelpful focus solely in inputs. The Christie Commission said we should put a focus on outcomes. In reality we need to ensure that we have the right range of inputs and sound processes that lead to the outputs that will deliver better outcomes.

 

We are clearly building up to the same debate on early years and childcare. Parties are queuing up to out do each other on promises of who can deliver the most hours, to the most children, at the lowest cost. Where is the debate on flexibility, women in work, work life balance, gender and childcare, the links between schools and nurseries and quality of provision. And whether we should provide early years childcare with low paid private sector staff.

 

Public services are complex and joined up. Staff need properly rewarded and trained, and yes, that costs money. We cannot have the public services we all say we want, and pay less tax. Scandamerica is an insult to our intelligence.

 

We need to properly debate the council tax freeze. It cannot continue. It is the wrong policy at the wrong time. We have had 40,000 job losses in local government in recent years, there are 40,000 more job cuts in the pipeline. Surely we should at least have an honest debate about fairer local property tax accepting there will be winners and losers.

 

We need to seriously debate our public services and how we reward those who deliver them. We need to debate austerity and how it is decimating our public services dragging the economy down. Simplistic calls on staffing targets don’t help. If we can have a grown up debate, then perhaps we really can call ourselves one of the most politically informed countries in the world.

The case for fully devolving Housing Benefit

UNISON's case for the full devolution of Housing Benefit has been supported by the respected think tank IPPR. Scotland needs all the policy levers to effectively address our housing crisis.

The command paper 'Scotland in the United Kingdom: An enduring settlement', (love an optimistic title!) sets out the legislative provisions to enact the Smith Commission consensus for further devolution to Scotland. There has been some political froth over who holds power over those aspects of welfare that will be devolved. In fairness, consultation clauses are not unreasonable given the complexity of Universal Credit that will remain reserved to Westminster.

However, this fuss has masked an important debate around Housing Benefit. The draft legislation gives the Scottish government certain powers to vary the housing costs elements of the universal credit and how they are paid. But as UNISON, and now the IPPR have argued, the case for taking housing out of the universal credit altogether is a very strong one.

The rationale is set out in the IPPR North report, Poverty and devolution:

"…the devolved institutions are responsible for key aspects of the housing and property market. They control not just housing policy and investment, but also planning policy. As a result of the Scotland Act 2012 the Scottish government will also have responsibility for all property taxes. Devolved governments can encourage the construction of new houses in both private and public sectors, and in particular facilitate increases in the social housing stock through investment they make, direct or permit, if they wish.

‘And yet in spite of a stronger understanding of their respective national and local housing market conditions, their unique housing problems, and the housing competencies needed to influence the supply and type of housing, they do not have control over rent subsidy. Control over such a key investment stream is the missing piece of the puzzle for better housing policy and a clearer, more local focus on tackling the cost of housing.

‘First, rent subsidy control would allow the administrations to determine problems and priorities that accord to their local circumstances, rather than policies set in Whitehall (such as the spare room subsidy) which appear to be of little relevance to housing markets in the devolved nations – as evidenced by the deal that was struck with Northern Ireland – but nevertheless can force rent subsidy recipients into destitution. For instance, rather than the Scottish government having to invest resources in reversing the effects of the spare room subsidy, Scotland should instead be making rent subsidy budgeting decisions themselves, in a manner that would target Scottish allocation problems, not ones in London.

‘Second, devolving rent subsidy budgeting could over the long run increase the supply of affordable housing and reduce the costs of rent subsidy. By calculating the long-term trade-offs, devolved governments could target their investment in social housing to reduce the costs of housing benefit. Allowing the devolved governments to use a proportion of housing benefit money to build new social housing, and in turn reduce expenditure on the more expensive private rented sector, would result in socially useful assets (which potentially could be sold when no longer needed) and is arguably a better long-term use of public money. Cutting reliance on the private rented sector by offering cheaper rents offers social tenants a quicker route out of poverty.

‘Third, control over rent subsidy would also bring much more stability and certainty to their substantial housing investment budgets. With the ability to control how rent subsidy policy is made, the devolved institutions can provide revenue certainty to their own public housing investments, and provide a more stable platform for affordable housing supply from the registered social landlord sector. As IPPR has argued elsewhere, the devolving of housing benefit would, over time, potentially contribute to reversing the 30-year drift in public spending from building homes to subsidising rents. In the long run it would be far better to invest more in bricks and mortar than in paying private landlords. The devolved administrations have proven much better at investing in new supply of social housing, and are as a result more active in helping families to reduce the housing cost pressures that have such an impact on policy discussions."

UNISON did not argue for the devolution of welfare benefits in total because we accept that there are a number of benefits that should remain a shared risk across the United Kingdom. Mainly because they are cyclical and that creates particular financial challenges for a devolved government. However, this doesn't apply to housing benefit and only the misplaced desire to protect the integrity of the Universal Credit prevented this happening when the original Smith Commission proposals were being developed. The Tories under pressure from the DWP, already in a mess over Universal Credit implementation, changed their position from the original submission.

The announcement from Labour that, if elected, they will fully devolve Housing Benefit is a welcome commitment. Controlling all the levers of housing policy is important if Scotland is to tackle our housing crisis.

 

GDP figures hide an unbalanced economic recovery

Today’s GDP figures look good on an annual basis, but they hide a slowdown in the last two quarters that starts to look like a trend.

GDP, grew 0.5% in the fourth quarter of the year, compared with 0.7% in the third and a recent peak of 0.8% in the second. A big concern is that growth is being driven by retail and consumer spending - not the balanced recovery that is really needed. Manufacturing and investment is petering out.

As the TUC has pointed out today, the Treasury has fallen back on that old statistical trick of recalibrating its data back to 2014, rather than the much less favourable 2010, when the ConDems took over. The UK now languishes well down the OECD growth league table. We should also not forget that this is the slowest recovery in history.  

Many have argued that Britain's economy before the 2008 crash was too reliant on debt-fuelled consumer spending. We know from the OBR analysis of the Chancellor’s Autumn Statement that he is relying on households going heavily into debt to drive his economic recovery. When what Britain really needs is a pay rise.

Shadow chancellor Ed Balls said the slowdown in fourth-quarter growth was a concern, and that, "Tory claims that the economy is fixed will ring hollow with working people" whose "wages are down by £1,600 a year since 2010". Indeed!

The fall in gas and petrol prices will help the inflation figures, but unless wages increase this will provide only a temporary fillip and not the sustainable growth we need. It could also provide a further knock to our unsustainably large current account deficit.

The other question we should ask is who has paid most for the recovery? The JRF and others have published the final papers in a series of detailed academic reports that show how poorer and vulnerable groups have been disproportionately hurt by austerity economics. Tax credits and cash benefits took more away from those in the bottom half of the income spectrum than they gained from increases to tax allowances. Savings made from rebalancing of benefits and tax allowances were wiped out by cuts in income tax for the better off. 

As this chart shows the changes to direct taxes and benefits have had no real effect overall on the public finances. Almost all of the savings achieved by cutting benefits were offset by gains for richer groups. 

It is also interesting to look at the impact on different groups. As this chart shows pensioners have been protected (because they vote?), while the working poor, and latterly children, have suffered more.

Overall, while there may be a limited recovery for some, even that is faltering, and it is workers and the vulnerable who continue to pay the price. 

Why energy bills should be falling faster

Energy prices are back in the news as politicians call on the energy companies to reflect the oil price fall in their gas and electricity prices.

EoN were first out with a gas price cut, followed by British Gas and now ScottishPower. The Prime Minister claimed this undermined Labour's price freeze, although just how a cap stops a price cut isn't really explained. Ed Miliband described the 5% fall as "too little, too late" when wholesale prices were falling by approximately 20%.

As oil prices have more than halved, why haven't the energy companies been quicker to pass on the savings to consumers?

It is certainly the case that wholesale reductions don't have a similar impact on retail bills. Primarily because wholesale costs only make up half the average consumer bill. Only 30% of the gas in Europe is now bought on the price of oil, probably even less than that in the UK. Companies also buy a lot of supply in forward markets, up to two years ahead of use. In the longer term, companies will point out that the Autumn Statement says levies on energy companies are set to rise by £6.3bn over the next seven years.

However, falling prices do give some headroom for reductions and there is a suspicion that companies are defending their retail margins after the mild 2013/14 winter. Gas demand was down 10-20% last winter.

A 25% drop in forward wholesale prices for gas should drive at least a 10% cut in retail prices. Ofgem estimates that the supply margins of the Big Six have doubled in the last twelve months, increasing from 4% (£49) in 2013 to 8% (£105) today. The average household’s annual energy bill is now £260 higher compared to 2010 and the poorest 10% of households have seen their energy bills rise nearly twice as fast as other households. Hardly surprising then that Ofgem has referred the energy companies to the Competition regular stating: "We found that suppliers do not adjust their prices as quickly when costs fall compared to when wholesale costs rise… ". Typically masterly understatement from the toothless regulator!

We are also not seeing reductions on the scale expected because companies are more focused on share price than consumers. Every 1% off retail prices cuts around 5% off SSE's earnings per share. Another by-product of a privatised industry. Smaller companies are able to respond to wholesale price changes more quickly because they have less risk. Another argument in favour of a more diversified ownership model that includes local authority energy generation.

Labour's solution is to give Ofgem (or its replacement) the power to make energy companies pass on cuts in the cost of oil and gas to bill payers. Ed Miliband said: "Let’s reduce energy bills for consumers. We can do that as well as having this freeze to make sure energy bills don’t rise."

The SNP has not taken a strong line over the energy companies, but instead have been calling for an increase in the Winter Fuel Payment. Chic Brodie MSP said: "Energy bills have increased by over 37% since 2000-01 and if winter fuel allowance had increased by inflation since 2000-01, pensioners would be £76 better off in 2014-15 than they are". This allowance is to be devolved to Scotland under the Smith agreement.

Whatever the economics say, Miliband and Osborne both calling for price cuts is going to keep the energy companies spin doctors busy in the run up to the General Election.

Budget blues

The consequences of austerity economics dominate budget setting at UK, Scottish and local authority level.

The Budget Bill was presented to the Scottish Parliament this week. Over five years the Scottish budget has been cut by around 10% in real terms with the capital budget facing a real terms cut of 26% as a result of the UK Government’s austerity programme. For the coming year this means a 1.7% real terms cut in the budget.

There is little new in the Bill from the Scottish Government’s original spending plans that I outlined last October. John Swinney will be privately congratulating himself that he didn’t press devolving oil revenues at the Smith Commission. The Scottish Government’s White Paper assumed that offshore receipts would be between £6.8bn and £7.9bn in 2016-17. At the current oil price those revenues would be around £1bn – that’s a £6bn cut in revenues available for public services. There is a perfectly respectable case for independence, but swapping the Barnett formula for devolved oil revenues, as the SNP proposes, is simply reckless.

Its not been a good time for John Swinney, normally the proverbial ‘safe pair of hands’. He has also been embarrassed by the £444m underspend in the Scottish Budget. This is an astonishingly high figure and he shouldn’t be surprised by the criticism, given that he has claimed credit for low underspends in previous years. He has also done two U-turns on taxation – scrapping his ‘Tesco’ tax and now amending his more progressive replacement for Stamp Duty. I actually thought he got both of these right first time, showing some imagination and adopting progressive tax principles - unlike the regressive Council Tax freeze.

One positive announcement is using the Barnett consequentials from the UK Autumn Statement to allocate £100m to address bed blocking. This is the biggest challenge facing the care sector at present and it is a direct consequence of council cuts. Frankly, a bigger priority that Jim Murphy’s 1000 extra nurses. While we certainly need more nurses and other members of the health team – it’s social care that is in the immediate greatest need. Having said that, £100m over three years is nowhere near enough cash and is being rolled out too slowly.

This year’s council budget setting is a particularly fraught process. Most are struggling to balance their budgets as they bear the brunt of cuts. They will be looking at the Scottish Government’s underspend and wondering why that hasn’t been allocated to the many pressing needs at local level. I highlighted some of these in a UNISON briefing to MSPs last week.

That leaves us with the root cause of Scotland’s financial problems – the UK coalition government. We had political row over the Westminster vote on the Charter for Budget Responsibility. While this is largely political froth, it does highlight a mixed message problem for Labour. They want to appear tough on economic credibility, while at the same time attack the Tories and LibDems on austerity.

In fact there are very important differences between the Labour and Tory spending plans. The Autumn Statement made it clear that they plan to reduce public services to a level not seen since the 1930’s. As the UK government’s own Office for Budget Responsibility (OBR) put it;

"Between 2009-10 and 2019-20, spending on public services, administration and grants by central government is projected to fall from 21.2 per cent to 12.6 per cent of GDP and from £5,650 to £3,880 per head in 2014-15 prices. Around 40 per cent of these cuts would have been delivered during this Parliament, with around 60 per cent to come during the next.”

While Labour’s spending plans are not all I might wish them to be, they are planning a different approach. As the independent Institute of Fiscal Studies (IFS) analysis of the political parties plans puts it, Labour’s looser fiscal policy allows them to “spend more or tax less to the tune of around £43bn in 2019-20 and still remain on course (just) to achieve their targets”. That is before any additional taxation, such as the planned ‘Mansion tax’ or an increase to the top rate of income tax.

While it’s the UK coalition government’s ideological attack on public services that is at the core of the budget problems in Scotland – the Scottish Government has also made some poor choices. Could do better, is the commentary on this year’s budget report card. Labour also needs to recognise that mixed messages confuses the very voters they are trying to attract.

Fracking - over to you!

Some astute politics by Labour and Tom Greatrex MP puts decisions on fracking very firmly in the Scottish Government's court.

The Smith Agreement proposes the devolution of licences for gas exploration. The political significance is that the Scottish Government Energy Minister, Fergus Ewing, has used the UK government's plans on underground access rights, to give the impression that he opposes fracking.

This is simply a political fig leaf, as I explained in an article last November in Utilities Scotland; "Scottish Government already has planning powers that could end the prospect of fracking in Scotland now. They have used these powers to stop new nuclear power stations, but not fracking. Simply put, Ineos are making this level of investment because they are confident that the Scottish Government is not going to stand in their way."

Labour MP Tom Greatrex pressed home this point by lodging amendments to the Infrastructure Bill requesting that full powers over shale gas exploration be given to the Scottish Parliament ahead of the general election. The coalition government did not back this as such, but instead pledged to exclude Scotland from the impending legislation.

Tom Greatrex said:

"The Tory-led Government have belatedly conceded Scottish Labour amendments to force the devolution of the remaining secondary parts of the framework for shale gas in Scotland, effectively implementing these parts of the Smith Agreement prior to the general election.

"Whilst some in Holyrood would like to pretend that the Scottish Government is powerless to act over fracking, the truth is that already nothing can happen at all in Scotland without the approval of ministers in Edinburgh. Their control over the planning and permitting regime gives the SNP ultimate responsibility and an effective veto for shale gas extraction in Scotland.

"But in the context of devolved planning and permitting regimes, it makes sense for underground mineral access rights, which are essentially a secondary aspect of the planning process, should be devolved as well. Labour have won a major concession from the Government on this point, who will now exclude Scotland from changes being made in the Infrastructure Bill."

Of course Scottish Labour isn't opposed in principle to fracking either and has instead said it cannot go ahead unless we have a system of robust environmental regulation and comprehensive inspection. However, they are not the government making this decision.

Friends of the Earth Scotland Director, Richard Dixon put it well in his recent opinion piece in The Scotsman: "Circumstances are conspiring to ensure that in the next few months, the SNP will have to come off the fence and either decisively stop the unconventional gas industry north of the Border or admit that they are happy to let big companies like INEOS drill and frack significant parts of Scotland."

Indeed, when you run out of others to blame - for government's, real politics can sometimes be very difficult!

 

 

 

Protecting Public Services

Scotland's public services are living through a lost decade as a consequence of austerity economics and we can do more to protect public services.

Tomorrow (Tuesday 13 January 2015) the Scottish Parliament will debate protecting public services. UNISON Scotland's briefing to MSP's draws from our recent report 'Austerity Economics Don't Add Up', which charts the impact austerity economics is having on Scotland’s public services and the staff who deliver them. Austerity is damaging people’s lives and health, hitting low-paid women hard, causing misery, risking a lost generation of young people who can’t find work, and creating greater levels of income inequality, which is bad for the economy, for those on the lowest incomes and for society in general.

In addition, we have been undertaking a series of surveys of public service workers in different occupational groups. You can access some of these on our Public Works web page. Our surveys let staff express their concerns about our public services in their own words.

While each group has specific concerns, I have identified some common themes for MSPs. They highlight issues that not everyone thinks about when the impact of cuts are debated:

• The impact of cuts on service delivery and in particular on the most vulnerable in our communities. Social care is a particular concern with a race to the bottom in provision.
• Corners are being cut to give the impression that services are being maintained. Whether its food sampling, inspections, hospital cleaning or the time elderly people are allocated for basic care.
• Core infrastructure is collapsing while staff patch and mend. Sticking plasters won’t last forever.
• Preventative work is being abandoned as staff focus on the basic statutory functions.
• Moving staff around to manage one crisis after another. ‘Keeping the plates spinning’ is a very common comment from staff.
• Growing levels of stress and related health issues. A particular challenge for what is becoming an ageing workforce due to recruitment freezes.
• Delayering of structures results in quite junior staff having to take decisions, without adequate support from more senior and experienced staff.
• Cuts in support staff and administration results in front line staff having to spend more time on paperwork - exacerbated by outdated or inadequate IT systems.
• Increased aggression and violence from service users, frustrated by service cuts and delays.

The overwhelming forward looking response from staff is that it’s bad now, but they believe it is going to get worse. This is happening at a time when public service wages have been slashed in real terms placing significant personal pressures on staff.

The importance of the preventative agenda in public service reform was highlighted again today by the Finance Committee. However, in practice it is clear that this is being abandoned by staff who are forced to fall back on reactive solutions.

I hope MSP's will also recognise that there is a better way. Of course the driving force for austerity comes from the UK coalition government, but Holyrood doesn't always make good choices. What is needed is the political will to challenge the view that austerity is necessary and to put in place better policies that deliver for all our communities.