Welcome to the Public Works blog.

Public Works is UNISON Scotland's campaign for jobs, services, fair taxation and the Living Wage. This blog will provide news and analysis on the delivery of public services in Scotland. We welcome comments and if you would like to contribute to this blog, please contact Dave Watson d.watson@unison.co.uk. For other information on what's happening in UNISON Scotland please visit our website.

Thursday, 22 March 2018

World Water Day

World Water Day, on 22 March every year, is about focusing attention on the importance of water. This year’s theme, ‘Nature for Water’, explores nature-based solutions (NBS) to the water challenges we face in the 21st century.  

Water is a human right according to the United Nations, which in 2010 declared that every man, woman and child should have access to clean drinking water and safe sanitation.  As the most precious life source the earth has to offer, without which humans cannot survive, the recognition of water’s importance to human beings as equal to their right to life and dignity goes without saying.

In Scotland, we take the provision of clean water from our taps and the safe removal of waste water for granted. Sadly, this is not the case in many parts of the world:

  • 2.1 billion people lack access to safely managed drinking water services. 
  • By 2050, the world’s population will have grown by an estimated 2 billion people and global water demand could be up to 30% higher than today. 
  • Around 1.9 billion people live in potentially severely water-scarce areas. By 2050, this could increase to around 3 billion people. 
  • 1.8 billion people use an unimproved source of drinking water with no protection against contamination from human faeces. 
  • Globally, over 80% of the wastewater generated by society flows back into the environment without being treated or reused. 

This February, the European Commission published the Re-cast of the Drinking Water Directive. We have been waiting four years for this first concrete outcome of the European Citizens Initiative, following the Commission’s unambitious Communication in 2014. The proposed Directive, as the ETUC and others said at the time, is a step forward, but misses the opportunity to recognise the Human Right to Water. Now we have to mobilise allies in the European Parliament, the European Social and Economic Committee and the Committee of the Regions to push the European Union to commit to really implementing the Human Right to Water. Hopefully it will happen before Brexit, but I wouldn’t hold your breath.

In Scotland, we have the benefit of a largely public sector water service. Despite Scottish Water’s persistent reference to ‘the company’, they are in fact a public corporation. This public service delivers a quality service more cost effectively than private companies in England, despite the additional costs of managing water in Scotland. The private sector has crept into a few corners of the service through competition measures in the non-domestic market and through ruinously expensive PFI schemes. However, the core service remains in public hands. 

There is a case for greater democratic accountability and moving away from the regulation model that seeks to copy the private sector model in England and Wales. We could also do much more with water as an economic asset, something envisaged in the Hydro Nation concept. Sadly, that vision hasn’t been realised in full. I hope that is something Scottish Labour and other political parties will consider in the run up to the next Scottish Parliament election. 

The sharks are always circling around Scottish Water and we need to remain vigilant. Scotland’s water is not for sale.

Tuesday, 20 March 2018

The case for Just Transition

Any plan to tackle climate change has to have Just Transition and an industrial strategy at its core.

Those of us who take a close interest in climate change tend to leap into the detailed aspects of the policy. In the era of Trump and false news, we should always remember to start any discussion by making the case for tackling climate change. 

In short, we are faced with rising temperatures relating to the build up of carbon dioxide in the atmosphere. To address this, the Paris Climate Change agreement seeks 1.5°C and 2°C commitments. However, if we continue with ineffective mitigation measures, in less than 12 years current emissions will see the 1.5°C aspiration pass by, with the 2°C carbon budget exceeded by the mid 2030s. We need to put long-term planetary stewardship before short-term profit, if our generation is going to bequeath a sustainable planet to our children. 

Scotland can rightly take credit for our radical Climate Change Act, secured with cross party support. However, grand aspirations and ambitious long-term targets need to be backed up by practical action. A new Climate Change Plan should be an opportunity to set out a clear pathway for slashing emissions and building a thriving green economy. Sadly, Parliament found Plan fell remarkably short on new policy action and lacked credibility in key areas like the budget, energy efficiency, cleaner transport and agricultural emissions.

There is public support for stronger action. 99% of people who responded to the consultation want the Government to commit to net zero emissions by 2050 at the latest, and increased action in the next decade with a stronger 2030 target.

On Just Transition, we should welcome the announcement of Just Transition Commission, but again this has to be about more than just process. For example, the growth in renewables has benefited our energy mix, but Scotland has a shockingly poor record on manufacturing jobs associated with renewable energy. Workers in these industries are entitled to expect that Just Transition plans are closely linked to a new industrial strategy. Warm words and vague aspirations don't pay the rent, or put food on the table.

Just Transition plans should build in the principles that livelihoods will be maintained; and training and re-training will be funded. They must also include measures to tackle disadvantage in the labour market.

Practical action should include:

  • A heat map of vulnerable industries and companies.
  • Advance planning, not last minute BiFab style interventions.
  • Links to a green industrial strategy and Fair Work principles.
  • Investment, including the National Investment Bank and pension funds.
  • Community benefit including the use of local supply chains.
  • Recognising that ownership matters, including taking a stake in enterprises to ensure just transition and support for co-operatives.
  • Using public sector procurement to promote transition.

There are international examples of good practice that we can call upon including; Statoil, Alberta coal and the Latrobe Valley in Australia. Canada and New Zealand are also looking to develop Just Transition commissions.

I am concerned that the Scottish Government is planning a very low key Commission model, reporting just to ministers with a short life span. The Commission needs to adopt a social dialogue model with social protections; an independent secretariat and adequate resourcing, not a rehash existing funding pots

It should also report to Parliament as well as ministers, allowing the economy and climate change committees to scrutinise its work. There is a case for putting it on statutory footing in the new Climate Change Act, but at a minimum it must have a balanced membership, with credible people, a realistic work programme and extensive worker engagement.

The Just Transition Partnership will shortly be publishing their detailed proposals for the Just Transition Commission. These proposals will argue that the focus should be on transforming Scotland’s whole economy through driving the transition to low carbon emissions, attending to jobs and job quality and the needs of workers and geographical communities. Setting out what needs to be done and how it can be done expeditiously and with a fair distribution of costs and benefits. 

Thursday, 15 February 2018

Childcare Risks

The Audit Scotland report on childcare will not be a fun read for Nicola Sturgeon. It is an even more difficult read for parents expecting to get 1140 hours of free childcare in two years time. “Significant risks” is strong language from Audit Scotland. It is clear that this policy is in trouble.

UNISON has been highlighting these issues for some time. It was clear that government made the announcement about the extra hours without any real information about how the current system was working and what would be needed to meet the expansion.

The report details just how much is still to be done. The key issue as ever is adequate funding. The Scottish government says it will cost £840m a year but councils, who are currently delivering the service put costs at £1 billion. That’s a substantial gap.

This is not the end of the problems. The whole “funding follows the child” commitment means that councils are being asked to plan for a service when they will have no way of knowing how parents will spend the money. How can they possible design a service under these conditions?

While the Audit Scotland report does highlight the need for 12,000 extra FTE staff, I fear it underestimates the numbers. This is a largely female workforce and many will want to work part-time as they have their own caring responsibilities. Worse there isn’t anything in place to ensure that even the 12,000 workers will be available in time.

High quality early learning depends on highly skilled and qualified staff. If the service is to meet the stated aim of improving children’s outcomes and closing the attainment gap then there needs to be not only initial training for new staff but ongoing professional development for all staff.

Pay is also a problem: while the government is looking at ways to guarantee the living wage, this is far too low to reflect the skills and qualifications for the job. The report shows just how complex using procurement will be to guarantee that rate. As there is no detail on how the “funding will follow the child” yet it is also unclear how that will link into checking rates of pay for staff. If, as the report points out, the government funding will cover that rate of pay for the 1140 hours how will the rest of their working week/year be funded at that rate?
There is so little detail or data that it is hard to see how the government is going to deliver on time.
As I have said before expanding childcare is a great plan. There is widespread support. The government needs to put in a lot more effort and funding to ensure that it works. There is no time to waste.

Friday, 2 February 2018

Council funding - a step forward, but not out of the woods

The Scottish Budget dance has taken another swirl as the Bill passes its first stage. Let’s have a look at what the changes mean for local government and pay.

First a quick recap. The draft budget proposed no cash increase for local government, which meant a ‘real terms’ cut in council budgets of around £153m. This was in a year when the Scottish Government had a cash increase in its own budget from Westminster of £188m. They also announced a new pay policy, but allocated nothing in the budget to pay for it.

After the Finance Settlement was published with details of individual local authority allocations, councils spotted an ‘accounting error’, which after the government correction resulted in a number of winners and losers.

On the day of the Stage 1 debate this week, the Government announced that an agreement had been reached with the Greens to support the budget, in return for an additional £159.5m of revenue funding. No repeat of last year’s padding the numbers by mixing capital and revenue. They also improved the pay policy by extending the 3% band to those earning up to £36,500. It remains at 2% for those earning above that.

Dealing first with the revenue funding, this roughly means that councils are now getting a standstill budget in ‘real terms’. However, that does not mean there won’t be more cuts in the coming year. 

That’s because ‘real terms’ means an assumption that inflation will be 1.4% next year. No one really believes this will happen, certainly not a prudent council finance director. The OBR has forecast that the CPI will be 2.4% next year and the RPI 3.3%. Pay alone, which is 55% of the budget, will be around double the government’s inflation assumption according to the pay policy.

Then there will be the usual round of ‘unavoidable commitments’. These include demographic change, which IJBs alone calculate at 2% per annum. Most IJBs are already reporting big shortfalls in their planned budgets for next year and will be looking for additional financial support. Not helped by the £66m allocated for the living wage and other new care duties only being ‘support’, not the full cost.

COSLA calculated all these demands at 2.6%, plus 3% for a realistic inflation estimate. That’s where their £545m figure comes from, which was the basis for Scottish Labour’s budget proposal.

That leaves pay. Does the revised budget meet the Scottish Government pay policy, let alone the trade union side claim?

A 3% pay increase costs councils around £210m. As pay makes up around 55% of the revenue budget, £88m of the new money is for pay. Then councils can increase the council tax by 3% raising £77m, which by the same proportions is £42m for pay. That’s a total of £130m, or a shortfall of £80m. They could of course meet the cost by spending almost all the new money on pay, but that leaves almost nothing for inflation and those unavoidable commitments.

Councils also have less flexibility in other areas. They can increase charges again, but the income is dropping off every year they do this, quite apart from the regressive nature of many charges. Councils took £79m from their reserves last year, not something they can continue to do.

In summary, the extra money is very welcome and makes a significant contribution to the draft budget shortfall. It also means that local government is suffering as badly, but not much worse (this year at least), as other departments outwith the protected spending areas. However, it still means an underfunded pay policy and service cuts.

Saturday, 20 January 2018

No 'fair deal' for councils

Barely a day goes by without another report on the impact of cuts on local services, as councils start the difficult process of managing yet another round of cuts.

Today, I was speaking at Scottish Labour's Highland conference in Inverness. The Highland Council's plans to cut services were all over the media this morning, a timely reminder of the problems that face councils across the country. As with most of these stories, they end with a Scottish Government spokesperson claiming that councils are getting a 'fair deal'.

Even allowing for the exigencies of government spin, this is simply not true. 

Councils have had an 8% cut in real terms since 2010/11. This isn't just down to Tory austerity, wicked though that is. Since 2013-14 council budget allocations have been cut by 6.9%, while the Scottish Government's Revenue Budget fell by 1.6%. Yes, there has been extra money for the government's priorities, but there has been a £590m cut in core funding. The money that pays for the basic local services that mark a civilised society. 

Council's have plugged the gap with a 13% increase in charges, a regressive tax that hits the poorest in society. They have also used up an unsustainable £79m of reserves along with £500m of cuts. The biggest impact has been in local employment, with 30,000 jobs gone since the crash. If councils have had such a 'fair deal', then why are 9 out of 10 austerity job cuts in local government?

The last minute budget deal last year helped, but it still left a £225m revenue cut, in a year when the when the Scottish Government budget went up. It was mitigated by £100m from the change in council tax bands and lifting the council tax freeze. However, that still left  a revenue shortfall of at least £55m. And that was just the consequences of central budget allocations. Councils faced additional unavoidable commitments like the apprenticeships levy and the cost of an ageing population.

In the current budget debate,the Scottish Government is receiving a £188m cash increase in its budget from Westminster, yet local government gets nothing. In real terms it is a £135m to £153m cut. Even if every council increased the council tax by the maximum 3% allowed, it would only generate £77m.

In practice, the cuts will be much worse because ‘real terms’ inflation will be much higher than the 1.4% assumed in the budget. The OBR forecasts are for RPI to rise 3.3% and CPI by 2.4%. There is no funding to meet the Scottish Government's new pay policy, which itself is less than the cost of living.

These are the numbers, but what about impact on services? UNISON has outlined the views of staff in eighteen ‘Damage’ reports. The common theme is that jobs are cut while demand increases, leaving staff stressed and demoralised while they attempt to keep basic services going. 

Even statutory services have been cut and preventative work dropped almost entirely. An example of this is building control. Even after the Grenfell Tower tragedy, building control staff spend little time inspecting properties, while they cope with vacancies and government bureaucracy.

These cuts have a disproportionate impact on low income families who have a greater reliance on local services. Less obvious is the impact on the economy. On Monday, the Jimmy Reid Foundation will publish a report commissioned by UNISON Scotland on this issue. It shows how local authority funding is crucial to sustain and grow economic and social benefits to local communities and society in Scotland as a whole.

We simply cannot go on like this. We need a proper reform local finance, including the use of discretionary taxation. An end to ring fencing budgets and for central government to properly fund its own initiatives that are delivered locally.

Of course we should also look at reform and the Local Governance Review announced by COSLA and the Scottish Government before Christmas is an important initiative. But that won't plug the gaping financial gap anytime soon.

Tory Austerity isn't ending short of a general election and the U.K. Government keeps digging itself a bigger hole rather than changing course. But that austerity has largely been dumped on councils in Scotland, and more. The suspicion is that's because it is far removed from ministers in Edinburgh.

Everyone who cares about democratically accountable local services should be making the case for fair funding in the current budget debate. That then provides the basis for a serious debate about strengthening local democracy.

Thursday, 11 January 2018

Protecting our pensions and the planet

Pensions are meant to safeguard our future, but that future is threatened by the burning of carbon in fossil fuels like coal, oil and gas. It's also a poor investment, which is why there is a growing movement to divest our pensions from fossil fuel investments.

I was in London yesterday for our UK annual pensions conference, which included the launch of UNISON’s new guide on this issue. It is designed to help members of local government pension schemes push for changes in the investment of their funds. The aim is to explore alternative investment opportunities, allowing funds to sell their shares and bonds in fossil fuels and to go carbon-free.

This is an issue that UNISON Scotland has championed for several years with our ReIvest campaign partners, FoE and Common Weal. Scottish Local Government Pension Scheme funds have some £1.8bn invested in fossil fuel companies - that figure grows to £16bn across the UK.

New government regulations for fossil fuels have raised the costs of high-polluting industries and reduced their investment appeal. Equally, emerging clean and green technology has created new and lucrative business opportunities for funds. The UK government is also consulting on allowing pension schemes to dump fossil fuel investments by dropping ‘best returns’ legal rules.

In Scotland, all local authorities, including those who administer the local SLGPS funds, have a statutory duty to reduce emissions in accordance with the Climate Change (Scotland) Act. That is an additional reason for challenging investment proposals to invest in fossil fuels.

One of the strengths of this new guide is to challenge the conventional wisdom that fiduciary duty is a barrier to divestment. The law is actually quite clear, pension funds should consider any factors that have a  financial impact on the performance of their investments, including social, environmental and corporate governance factors. Trustees can take account of non- financial factors where they have good reason to think that scheme members share their view, and there is no risk of major financial harm to the fund.

The guide also sets out a range of actions anyone who is concerned about this issue can take - not just our union branches and members.

By investing in fossil fuel extraction, our local councils are attempting to take a short term profit from climate change. As public bodies, councils have a responsibility to work for the public good,  they shouldn’t be financially and politically supporting the most destructive industry on the planet. Fossil fuel investments undermine existing Scottish and local authority climate change mitigation and adaptation strategies.

Let's protect our hard earned pensions and leave a planet fit for future generations.

Friday, 22 December 2017

Councils are not getting a 'good deal'

The Cabinet Secretary for Finance Derek Mackay says he has delivered a “good deal” for Scottish councils in the local government budget settlement. Well that’s a relief! Or it would be if it was true.

Lots of numbers are bandied about in relation to the local government budget. I dealt with the most common confusion over a ‘real terms’ increase in a previous blog post. So, let’s try and decipher what’s going on in local government.

Let’s start with the trends over recent years. Looking at the comparable, post police and fire transfer, years between 2013-14 and 2017-18, the local government revenue budget fell by 6.9%, whereas the Scottish government Revenue Budget fell by only 1.6%. This chart shows the trend in detail:

The most damming statistic relates to jobs. If local government has had such a ‘good deal’ then why are nine out of ten austerity job losses in councils?

For the coming year the allocation of £9.63 billion is a “flat cash” settlement, but it isn’t a like for like comparison with the previous year. Next year’s funding includes new Scottish Government policy commitments such as starting to implement the expansion of Early Years and Childcare and ring fencing teachers’ pay and classroom ratios. These add up to a total of £153 million and once they are deducted from the “flat cash” settlement, there is a cut of £153 million for core local government services. 

This table shows how this is calculated. 

Even if every council raised the Council Tax by 3%, it only raises £77m. Certainly not enough to plug this gap. The finance minister’s claim that this would deliver a real terms increase, does not stack up.

We focus on revenue because that’s what pays for core services and of course pay. SPICe has estimated that, if local authorities were to match the Scottish Government's pay policy, this would cost around £150m (gross) in 2018-19. I think this is a little on the low side, but it’s difficult to be precise because of poor workforce data. In fairness, in real terms councils have 1% factored in for pay, so the gap is around £90m. 

We should also remember that because of the allocation formula the pain is not equally spread across councils. This chart shows the variations.

The bottom line is that the finance minister has been told to protect half the budget. That means that the other half takes a disproportionate hit. Most of that is local government, so however you try and spin it, councils are not getting a ‘good deal’.