Tackling austerity

The Autumn 2018 UK Budget will set the spending envelope for public services for the coming years, although Scotland has some flexibility with half the budget now decided by the Scottish Parliament.

A new report from the New Economics Foundation (NEF) highlights that the decade of austerity so far has arguably been the worst economic policy error in a generation. As a consequence, living standards have suffered substantially. The isolated effects of discretionary cuts have suppressed gross domestic product (GDP) by a cumulative 15% between 2010/11 and 2017/18, or £10,000 per household. These cuts have coincided with the slowest increase in life expectancy since the 1970's.

Public services, and the pay of those who deliver them, have born the brunt of austerity. These services are in most need of a spending boost and should be foremost in the Chancellors mind. The NEF model finds that unless the government changes course, the chancellor’s recent claim that there is “light at the end of the tunnel” will amount to hollow rhetoric. In June, the UK government announced a further £20.5 billion for the NHS by 2023/24. But outside of this, overall spending on services is currently on course to see no average increase at all. Furthermore, if the UK government rolls forward its current protections for areas such as police and defence, then in the absence of new money this will have to be funded by further cuts to services elsewhere. As a consequence, budgets for non protected services could see an average real terms cut of 2.1%, or 4.1% per capita, during the first half of the 2020s. The Scottish Government has similar priorities, so this is also likely to be the position in Scotland.

Austerity is of course a political, not an economic choice. NEF's illustrative scenario for keeping up with demand pressures in health, social care and schools services would cost an extra £14.6 billion (or 4% of overall resource DEL) per year by 2023/24. Crucially, they show that these illustrative scenarios are realistic and fundable. 

The good news for Labour's commitment to end austerity, is that new figures from the British Social Attitudes Survey shows that the public’s support for tax rises is at its highest level for 15 years. 61% would accept tax rises to pay for the NHS, up from 40% in 2014 and 31% in 2010. Support for spending more on retirees is down over 20 percentage points in a decade, while support for generosity towards those on low incomes has been rising since 2011. 

This is welcome because it means public opinion is catching up with both demography and economic reality. As the Social Metrics Commission report highlights, 9 out of 10 people living in poverty are in working families, and half of them are families where someone is disabled.

The Resolution Foundation Director makes the point in his Labour Conference blog that we will need to bite the bullet on taxes, at UK level and in Scotland. As the chart below shows, we have largely (and rightly) funded an increasing share of spending going on health and education by hugely shrinking our military spend. But there’s not much military left to shrink - other than capital spending on Trident! 

Labour's internal issues have tended to dominate the coverage of conference this week. However, the leadership has been crystal clear that austerity is a political choice and it is not Labour's approach. The evidence from the reports highlighted above, shows that an alternative strategy is economically viable and it has broad public support. 

Reflections on a worthwhile career

This month I retire from my job at UNISON Scotland. I have worked for UNISON and its predecessors for almost 38 years, and a lay official for 4 years before that. The memoirs might be a retirement project, but I thought I would share some reflections on what I believe has been a worthwhile career.

The right-wing press, and occasionally those in the movement, like to portray trade unions as dinosaurs, resistant to change, or the 1970’s carthorse. They usually mean resistant to cutting pay and conditions to profit bad employers, which we certainly are! However, it is probably true that, internally at least, trade unions change slowly – but change they have.

I joined NALGO on my induction into local government and as it was a new workplace, the organiser got us to elect a ‘workplace representative’ in NALGO parlance. As a Labour Party CLP Secretary, my colleagues viewed me as the obvious choice, although I am not sure the branch officer viewed matters in that light! The last branch secretary was also the Establishment Officer (HR Director) and I suspect many in the branch still agreed with the views of the first NALGO General Secretary, who in 1910 said, “Anything savouring of trade unionism is nausea to the local government officer and his Association”.  

I went on to become Assistant Branch Secretary and an early case involved a woman in the Chief Executive’s Department who was passed over for promotion in favour of a junior and far less experience male colleague. He was a member of the council’s masonic lodge and days later the Staff Side Secretary popped into my office to enquire how I was getting on, ‘Not much in that case Dave?” he asked. 

Lunchtime drinking was something I struggled with coming from a sports centre job and reflected a mostly male culture. NALGO’s membership newspaper when I joined, ‘Public Service’, had a regular feature (often on page 3) called ‘The prettiest young recruit’. I kid you not, even for the 1970’s. 

So, the modern trade union movement might not be perfect, but it has changed, not least in its more diverse workforce and modern systems. As the teams I manage have poured over KPI’s, the balanced scorecard and Gant charts, it is literally a world apart. 

The campaigns we run, the way we organise and bargain have also changed. Sometimes by necessity, but also from invention. We learn from every generation that has joined our ranks.

What makes this job really worthwhile is making a difference to people’s lives, in the same way as most UNISON members in public services do every day they go to work. I was once asked at a school presentation, what was your proudest achievement? My immediate thoughts turned to pay deals, avoiding redundancies, pension schemes, legislation and much besides. 

While these are huge and helped thousands of members, it is always the individuals that you remember. I represented a young clerical worker early in my career, who had been sacked. Years later she saw an article I had written in a local government journal and rang up to ask if I was the same Dave Watson who saved her job. I asked her what she was doing now and she was the Assistant Chief Executive of another council. Apparently, at every induction course, she told the story of how her career would have ended at 18 years of age had it not been for a union official finding grounds to give her a second chance. And as she told every new member of staff, ‘That’s why you should join the union’. 

I once told that story to a headhunter who was offering me a job as a management consultant. The job involved selling and then implementing their latest management fad, before starting the whole process all over again. It paid almost double my union salary and he couldn’t understand why making a difference mattered that much. He thought I was just negotiating a bigger package. He finished by saying he hadn’t met many people like me. My response was that he should spend more time in our movement, where every day thousands of staff and activists go that extra mile because they know they make a difference to workers lives.

I sometimes joke that I should have been a history professor. But the truth is, while an interesting hobby makes anyone a more rounded person, I doubt I if I could look back with the same sense of achievement. 

I have most certainly not always got it right. It is also a job with often long and unsocial hours that has placed a strain on my personal relationships. None the less, our movement is full of great people, doing amazing things and I hope I have played a small part in that story. 

My advice to those students starting out in life, is to choose a career where you can make a difference. I have had that privilege – so can you.

Tories two-faced on austerity

In this year’s Spring Statement, the Chancellor had an opportunity to address the devastating impact of eight years of austerity on public services. However, he rejected calls to announce the end of austerity. In Scotland, Ruth Davidson hailed the budget as a ‘win’ for her MPs.

Some argue that the Conservatives' historic strength has been their adaptability. Depending on circumstance, they have been Europhile and Eurosceptic, statist and laissez-faire, isolationist and interventionist. The challenge in Scotland, is trying to convince us they support better public services while saying nothing about austerity.

My local Tory MSP’s newsletter is full of his campaigns to get the Scottish Government and the local council to improve various local services. More should be spent on this, that or another public service. Absolutely right, but you won’t find a similar plea for the Chancellor to end austerity, the underlying cause of all these spending cuts.

The Scottish Conservatives at a national level are not exempt from this double-speak. I have gone back through their press releases over the past six months.

There are numerous calls for more spending on NHS Scotland. Spending on mental health services, particularly services for children, is apparently inadequate. So is spending on GP services, A&E departments, doctor training, smoking cessation, care of veterans, ambulances, drug and alcohol services, cancer services and various drug treatments. Not to mention complaining about bed cuts in several hospitals. Thanking our members for their efforts during the 70th anniversary celebrations is all well and good, but ending austerity funding would be even better.

Local government is also underfunded according to the Scottish Conservatives. It is, but austerity isn’t going to pay for their £100m ‘pothole fund’, or stop councils having to dig into their reserves, as the Tories have helpfully highlighted! It is also somewhat less than credible to argue for a cut in business rates and complain about Council tax increases – all of which would add to council cuts.

In education, they have complained about falling teacher numbers, cuts in FE colleges, while also asking for extra spending on textbooks. They want to ensure that foundation apprenticeships are a part of every single Scottish school’s offer by 2020. They have also highlighted underfunding of the early years expansion, which although true, will not be solved under the austerity policies of their party.

There are regular press releases claiming the Scottish Government is ‘soft on crime’, calling for longer sentences without any understanding that prison spending is way above the European average and a huge wasteful burden on public spending. They attack community alternatives to prison that actually work and are more cost effective. They complain about police numbers falling and the fire service budget, but not about austerity.

Of course, the Scottish Government now has the powers to address austerity. However, the Scottish Conservatives haven’t urged them to do so, instead they have opposed tax increases for the better off. If parliament had voted for their tax policies, funding for public services would be cut by £335m. 

I understand the de-toxification strategy and many of the press releases highlight legitimate concerns about public services. However, you cannot avoid the reality that services are stretched largely because of austerity. An unwillingness to say anything about that is simply hypocritical. Facing two ways might make a nice local leaflet, but it does nothing for political credibility.

Tolpuddle Martyrs Festival

I had the pleasure of attending the Tolpuddle Martyrs Festival yesterday. Some thirty years ago I worked in Dorset, and as Chair of the local trades council, I helped to organise this event. I still cherish my numbered bottle of Martyrs Ale, brewed for the 150th anniversary event I was involved in.

I am pleased to say that the event is better supported than it has ever been - effectively the southern equivalent of the Durham Miners Gala. Extended to a weekend festival with many comrades camping in the village. The attendance of Jeremy Corbyn undoubtedly boosted numbers this weekend. His announcement that a new Labour government would reconstitute the Agricultural Wages Board was welcome and relevant.

The story of the Martyrs is unusual, not just because Dorset is not renown for its socialist heritage. In 1834, farm workers in west Dorset formed a trade union. Unions were lawful and growing fast, but six leaders of the union were arrested, after a complaint from a local landowner, and sentenced to seven years’ transportation for taking an oath of secrecy. This legislation was introduced to deal with mutiny during the Napoleonic Wars.

 A massive protest swept across the country. Thousands of people marched through London and many more organised petitions and protest meetings to demand their freedom. All were pardoned in March 1836, with the support of Lord Russell who had recently become home secretary. They returned to England, although James Hammett was the only one of the six to die in the county. He is buried in the village churchyard.

The Martyrs also came from a Methodist tradition in the village, which is commemorated in the chapel.

Jeremy got a warm reception, both in the procession and during his speech.

It's only a short procession, but the numbers yesterday meant it took some time to organise.

It was a grand event and one I was personally pleased to make a return to.

We need a radical Transport Bill, not another market dabble

The Transport Bill is an opportunity to take a radical look at integrated transport in Scotland. Sadly, the Bill as introduced falls somewhat short of this aim.

The Scottish Government has introduced a Transport Bill to the Scottish Parliament. The main provisions are summarise in the UNISON Scotland briefing.

Tackling the appalling air quality in our cities should be a government priority, given it could be contributing to around 15,000 early deaths in Scotland every year. The Bill puts the regulatory structure in place to introduce low emission zones. This is welcome, but the key challenge is to put in place real action to cut emissions. We don't need more plans about plans.

Other provisions on integrated ticketing, ending (some) double parking and another go at regulating road works are worthy measures, but they are unlikely to make a significant difference.

A key issue in the Bill will be the regulation and delivery of bus services. The Bill extends the powers of local authorities to run buses and develop bus partnership plans. The aim is to allow councils to act more flexibility to improve services, either by working with bus companies or by stepping in and running services themselves.

Local buses are the most frequently used mode of public transport in Scotland. With 393 million passengers on local bus services, more journeys are made by local bus than by rail. However, there has been a dramatic fall in the number of journeys, down from 487 million in 2007. There has been a 10% reduction in past five years, which is double the reduction in Great Britain as a whole. Part of the reason has to be that bus travel is 65% more expensive in 2018 than in 2008, at a time when real household incomes have been falling. There has also been a 16% reduction in the number of buses in operation.

So something is going seriously wrong in Scotland.

While bus passengers are losing out the companies are not. They have just raised prices to cope with the decline in services and in any case 43% of bus company revenue comes directly from local or central government through grants and concessionary travel reimbursement.

Bus companies argue that they offer competition. However, the Competition Commission’s 2011 report into local bus services said, “head to head competition between bus operators is uncommon", because of “customer conduct”. The worst, most irrational thing these difficult customers did was to ignore the choice of operators the free market had to offer, opting instead “to board the first bus to their destination that arrives at their bus stop" - there's a shock!

While the Bill talks about the role of local authorities, the companies view it as an opportunity. That's because the Bill will allow private operators to cherry pick the profitable routes, leaving councils to pick up the bill for the rest. Ironically, the Scottish Government is following the English Tory policy in the Bus Services Act last year.

In contrast, the public want government to go in the opposite direction. A recent poll shows clear public support for buses to be run by public operators - only 15% of Scots believe they should be run by private companies. Interestingly, almost half of Tory voters support public ownership.

So, we don't need local partnerships, we need local public ownership. Publicly owned Lothian Buses is the best operator in Scotland, even getting the middle classes onto the bus. Levels of customer satisfaction for Lothian Buses are the highest in the industry and the publicly owned company recently returned £5.5 million to the public purse.

This is one of the models we could adopt in Scotland, together with other non-profit initiatives like co-operatives. As the Co-operative Party's 'People's Bus' campaign shows, across the UK, co-operative, social enterprise and other forms of not-for-profit bus operators are proving that it’s possible to run bus services that are affordable and responsive to the needs of local people. Most recently in David Cameron's constituency of Whitney.

If we are really serious about cutting vehicle emissions, how about free transit? This is an idea being piloted in Germany by “the end of this year at the latest”. Five cities across western Germany are involved, including former capital Bonn and industrial cities Essen and Mannheim. It won't be easy, but has some links to a new industrial strategy given the demand it would create for electric or hydrogen buses.

It is difficult to accurately cost free local transit because a key element would be funding increased demand. Based on current funding and demand, it could be somewhere between £200m and £300m per annum and that doesn't take account of the savings from not having to pay for dividends and expensive borrowing. Not an impossible ask by any means and we should account for the preventative spending benefits from the emission reductions.

Scotland needs a more integrated public transport system that results in a meaningful shift away from car use. Re-regulating buses and more public and community ownership would be helpful in doing this. In addition, we need green travel plans at work, with incentives for lower energy transport, cycling, car-share, public transport, walking and the use of lower emissions vehicles.

We need a radical transport policy, not another dabble with market mechanisms.



Happy Birthday to our National Health Service

Happy Birthday to our National Health Service, one of Labour’s finest achievements in government. A brilliant socialist concept that shows the benefits of collective action to tackle the challenges facing our society.

There are a range of celebrations in the coming week to mark the 70^th anniversary of the NHS. I was pleased to be speaking at one of those today in Glasgow, organised with the new Scottish Labour Westminster candidate for Glasgow North, Pam Duncan-Clancy. One of a great group of UNISON women who will be contesting the next UK general election in Scotland.  

Some people, including NHS staff, can be a bit cynical about NHS anniversary celebrations. While they welcome the praise and celebrate the NHS they have dedicated their careers to, they wish politicians would also be thinking of those warm words when they are allocating budgets and funding their pay and conditions. A bit like Firefighters after Grenfell - warm words from the Prime Minister after she had slashed the fire budgets in the name of austerity.

None the less we should welcome these celebrations and I argued today that NHS 70 offers two broad opportunities.

Firstly, to remind everyone of the importance of the NHS - something we can take for granted. For most of us it has literally been there from the cradle to the grave. In a column in the Guardian this week – Emma Brockes coming back from the USA, compared the two approaches. She said:

"For all its faults and in spite of terrible under-investment, the very fact of the welfare state when seen from the US is nothing short of a miracle. I used to take it for granted, but that has gone. We are not supposed to think of the world in terms of us and them, yet it is impossible, moving between the two countries, not to see the welfare state, the NHS, and the philosophy that underpins them, as the greatest bulwarks between society in the UK and life as it is lived in the US. I know which side I’m on."

Most people in Scotland don't get to experience that comparison. However, on the train the other day I listened to two young women discussing an American medical drama - The Resident. This drama highlights the shocking profit driven approaches of a big US hospital. They concluded 'thank god we have the NHS'.

Well apologies to those of a religious persuasion, but the NHS isn't an act of God. It was campaigned for by organisations like the Socialist Health Association and delivered by a visionary health minister in a radical Labour Government. And it has been Labour government’s that have funded it better than any others.

We only have to look at the shambles of marketisation in NHS England to see how easy it is to drift into privatisation. So, we should also thank the Labour health ministers Susan Deacon and Malcolm Chisholm who took Scotland in a different direction in the early years of devolution.

Secondly, while we should celebrate achievements - should take the opportunity to recognise the challenges and look forward. These are set out in the SHA Scotland paper launched today, and Professor David Conway outlined these at today’s event. 

 It is important to emphasise that while the NHS does a lot of preventative work it is largely about patching and mending us when we get ill. So, preventing ill health requires action outwith the NHS.

With the exception of Asthma, you are more likely to suffer every other illness the lower your income group. That points to the fundamental challenge facing health of the nation - inequality. The research in the book the Spirit Level showed us how unequal societies are also unhealthy societies. Interestingly, it also showed that even the relatively affluent members of society also do worse in unequal societies.

And the NHS points the way towards the collective action we need to take to seriously tackle inequality. The NHS commands widespread support because we all use it. Even the rich understand that while they can buy a luxury room in a private hospital, it will be an NHS paramedic or the staff in an A&E dept who will save their lives in an emergency.

In Glasgow in the 19th century the council delivered many of the great projects that did so much to improve health in the city. It wasn't just hospitals. It was clean water from Loch Katrine and many other public health measures that made the difference. You can imagine one of those rich merchants saying to another on the council, why should I pay for these things. The answer was that disease knows no boundaries, even the rich couldn't inoculate themselves. 

It's that collective approach, yes socialism, that should drive our thinking as we move forward. In housing, social care, the economy and the broader welfare state. 

I may not make the 100th anniversary of the NHS, but if I do, I hope that we will have addressed the 21^st century challenges, which will reduce the demand on the NHS. By creating a more equal society that will honour the socialist giants, like Nye Bevan, on whose shoulders we stand.

Pensions reform offers no easy options, but scale matters

Scotland’s largest pension scheme is considering major changes in the way it’s £42bn worth of assets are administered.

The Scottish Local Government Pension Scheme (SLGPS) Advisory Board is asking employers and trade unions to compare the current structure against three options that, by degrees, consolidate the functions of the scheme’s 11 constituent funds by collaboration, pooling and merger. Today’s launch seminar in Edinburgh heard from speakers outlining the options and experts who advised the Board on the available options.

Current SLGPS governance structure 

There is an international movement towards greater scale in pension management that makes the status quo very difficult to sustain. This was set out very clearly by Iain Clacher, from the University of Leeds at today’s seminar. With greater scale in pensions come economies of scale, which reduce costs, increase efficiencies, and this ultimately secures the pension benefits of members. Every basis point (0.01%) shaved off costs equates to £3.5m. 

UNISON's own research reinforces the benefits of scale. While UNISON would normally champion the cause of localism, there are very few local factors in pension management that make local control the determining factor. 

Given the case for scale the status quo does not look like a viable option. Some scale could be achieved through collaboration. This has been tried by Lothian and Falkirk, but it offers only modest gains in scale while retaining complex governance arrangements. 

The English model of pooling assets provides scale, although the funds retain their responsibilities for administering the scheme. Governance is a problem with this model and UNISON colleagues in England and Wales have significant concerns. 

The most radical option would result in a full merger of funds, which would have the advantages of scale. However, governance would need to be centralised either on a joint board or NDPB model. There would also be significant implementation challenges. 

This is not a straightforward or easy decision. However, pension funds are consolidating across the world for good reasons. When I meet fellow union pension negotiators across the world, they are astonished that we voluntarily retain such small funds.

Scale gives greater investment clout, tackles fee transparency, enables in-house expertise to invest in new areas like infrastructure, and reduces duplication and cost. It’s not a decision that we can afford to duck.