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.

Wednesday, 28 May 2014

CIPD survey paints a bleak workplace picture, particularly in public sector.

The CIPD quarterly employee outlook survey offers an insight into employee attitudes in the workplace. The latest report highlights a marked increase in negative perceptions of senior managers, particularly in the public sector. It also reveals that almost a third of employees believe that their current performance management systems are unfair, again particularly in the public sector.

Only a third of employees feel engaged in the business. Job satisfaction levels (+42) are slightly up with employees in the voluntary sector the most satisfied with their jobs (+48). Job satisfaction has decreased in this survey in the public sector (+37), although still up on 2013 levels (+25).

Attitudes towards line managers remain positive, with 64% of employees strongly satisfied or satisfied. However, this survey sees a fall in ratings for senior managers. Confidence in particular has fallen by 5% and trust in senior leaders and perceptions of consultation have fallen by 4% each. Employees in the public sector remain the most negative about their senior managers and there have been some substantial decreases in this survey. The biggest decreases are in relation to senior managers treating employees with respect (down 12%), trust in senior leaders (decrease of 11%).

More employees reported that they believe their organisation’s performance management process is fair (39%) rather than unfair (30%), but these are very low figures demonstrating little confidence in these systems anywhere. Employees in the public sector were even more likely to believe their performance management process is unfair (33%).

The proportion of employees reporting excessive pressure at work every day or once or twice a week in spring 2014 remains high at 41%. Employees’ satisfaction with their work–life balance has remained at the relatively high level of 58% in this survey. However, it is women (63%) who are significantly more likely than men (52%) to enjoy a better work–life balance. The public sector is now the least satisfied sector.

Spring 2014 sees a slight drop in the overall number of employees saying it is very likely or likely that they could lose their job as a result of the current economic context. Employees’ fears over losing their jobs are highest in the public sector (23%) and lowest in the private sector (13%). There is increasing concern in the voluntary sector over job losses. These numbers show that workers are not convinced by rhetoric around the economic ‘recovery’ and does not bode well for economic confidence in the longer term.

Overall this survey shows a pretty depressing picture of the UK workforce. The fact that the public sector comes off worse in almost every section is a reflection of the constant UK government attacks on workers in the sector.

Tuesday, 27 May 2014

Scotland's tiny circle of public appointments

A survey by the Scottish Review reveals that, despite repeated assurances of greater diversity in appointments to official boards, public life in Scotland is still dominated by a tiny circle.

The survey found a remarkable extent of interconnection and overlap. Of the 212 seats looked at in the survey, no fewer than 81 (38%) are occupied by people with more than one public appointment. On five key national bodies – Care Inspectorate, Scottish Fire and Rescue Service, Scottish Police Authority, Scottish Social Services Council, and VisitScotland – a majority of the board are picking up taxpayer-funded fees from at least one other public body.

The article looks at three particularly busy people in quango land to illustrate their point.

The article concludes, "These facts make a mockery of the Scottish Government's periodic undertakings to enlarge the number of people taking part in public life. The truth is that the same names crop up in list after list and that some have been around so long that they have become semi-permanent fixtures, moving seamlessly from one quango to another."

UNISON Scotland has long argued that we should be bringing greater democracy to public bodies. It is often argued that the benefits of appointments is that they bring new people and expertise that might not wish to engage in elections. This looks like a pretty weak argument in light of this research.

 

Thursday, 22 May 2014

Britain isn't booming

Is Britain booming thanks to the Chancellor's austerity economics? In a word, no.

John Weeks from the University of London has helpfully debunked George Osborne's claims using four charts. These show that the recovery actually began in mid-2009 and continued unabated until coalition policies killed it off in the second half of 2010. In other words it would have been a fairly normal economic cycle, with a reasonable recovery, until the Chancellor intervened.

The charts, taken from ONS data make this point very well.

The ConDem's often claim that however weak our growth is, it’s better than other countries. Again this is mince. One country suffered a recession deeper than the UK (Japan), and another almost as deep (Germany). Japanese GDP is now more than 2% above the beginning of 2008, and Germany’s is 3% above. America’s economy has recovered to 4% above 2008. Britain is still below 2008, even with anaemic growth of 0.8% last quarter.

Weeks' concludes, "Osborne’s achievements are quite different. Draconian expenditure cuts achieved an initial reduction in borrowing, which killed a nascent recovery and mired the economy in stagnation for three years."

Headlines that we are achieving the 'highest employment level ever', can also mislead people into believing that we have a robust recovery. Stephen Boyd at the STUC sets out why this claim isn’t very significant at the Better Way blog. Brian Ashcroft covers Scotland's relative position at his blog.

Stephen highlights concerns over the increase in self-employment - working less hours, earning less money and as a consequence paying less tax. The headline figures also tell us very little about the quality of new jobs being created. For example, around 120,000 zero-hour contract jobs in Scotland. And of course the unprecedented decline in real wages since 2009. He concludes, "it's good that employment is rising and unemployment falling in Scotland, but the labour market is nowhere near a state that would justify the grand political claims."

There is a meaningful recovery for some. As Paul Johnson at IFS shows, the richest 1% of the population are becoming increasingly removed from everybody else. The share of post-tax income captured by the richest 1% leapt from 8.2% to 9.8% in 2013/14. The total post-tax income increased by about £37 billion last year. Of this, £16 billion went to the richest 1%, with just £11 billion shared across the poorest 50 per cent. This doesn’t seem the most sensible or efficient kind of ‘recovery’ possible.

Austerity is only for the workers in Osborne's Britain.

Tuesday, 20 May 2014

Making childcare a priority

In today's Scotsman we set out the case for making childcare a priority for Scotland.

Research shows low-cost quality childcare benefits women, children, family budgets, in-work rates and economic growth. It’s one of the few policies that contributes to both growing the economy and redistributing that growth more fairly. It is undeniably a good thing.

Good progress was made in the early years of devolution, but that pace was not maintained. However, childcare is rightly back on the political agenda and we should welcome that. Childcare is too expensive for many families and that is driving a race to the bottom with poor quality provision. It is local authorities who employ the best-qualified and most experienced childcare workers and are best placed to expand their workforce while maintaining a high standard.

Transforming childcare will cost money, we can’t pretend otherwise, and without doing the preparatory work at this stage it is anyone’s guess as to how much. But we do know it will generate more tax by creating jobs and by supporting women to return to work after maternity leave. And we know there will be a return on our investment. We will also make savings if we invest in getting it right in the first place, as opposed to the high costs we currently pay to overcome the effects of poverty and inequality.

Also in today's Scotsman, there is a helpful piece on child protection social work from the ADSW President, Sandy Riddell. He makes the point that social workers seem to be the default group to blame when a child is harmed. He says: "We shouldn’t risk paralysing a profession in order to give the public the comfort of having someone to blame quickly. No social worker killed any of these children and if we didn’t have good committed social workers, how many more children would be at risk of harm?"

Wednesday, 14 May 2014

Audit Committee confirm UNISON warnings over police reform

The Public Audit Committee has published a report on police reform. The report covers many of the concerns that UNISON raised at the time the Bill and the subsequent merger was rushed through.

A key UNISON concern was the lack of a full business case before the Bill was passed. Despite promising such a document it was never produced and instead was merged into a short term financial strategy. As the Committee says:
“The Committee considers that by not developing a full business case neither the Scottish Government, Police Scotland nor the SPA were able to comprehensively test the accuracy of the projected costs and savings in the outline business case following parliamentary agreement to the Bill.”

Longer term savings are only now being identified and the report says:
“the SPA and Police Scotland had not yet agreed a financial strategy (as at November 2013) to demonstrate how savings will be achieved after 2013/14”

Another key UNISON concern was that the structure chosen by the Scottish Government meant that Police Scotland would be unable to recover VAT. Again we have been proven correct as the report says:
“previously the eight police forces were able to recover VAT but that from 2013/14 a VAT liability of approximately £22 million will be required to be met each year by Police Scotland and the SPA. The Committee heard that part of the funding for police reform of £147 million was to be used to meet the additional VAT costs arising from the creation of a single police service. The Scottish Government had not yet decided whether it would meet the VAT costs of Police Scotland and the SPA from 2015/16.”

There are several other critical comments in the report, although the SNP majority on the committee has watered down criticisms of the Scottish Government. Publishing their own stronger version yesterday, MSPs Hugh Henry, Ken Macintosh, Tavish Scott and Mary Scanlon said it was not their job to put out a “flattering interpretation.”

An example of this is:
“The Committee notes the AGS comments that a lessons learned review on police reform which has been already undertaken by the Scottish Government focussed on what went well rather than what did not work effectively.”

The minority report adds, “The Committee therefore seeks confirmation from the Scottish Government that its post implementation review will scrutinise what worked well as well as not so well.”
The Committee Convenor Hugh Henry MSP said, “There’s a cult developing here of obedience and slavishness which some governments and regimes elsewhere in the world would be proud to have, and it’s unfortunate we’re seeing this in 21st-century Scotland.”

While the minority report is stronger, even the watered down version confirms the warnings UNISON gave at the time over the lack of a robust business strategy.

Friday, 9 May 2014

Progress on the Scottish Living Wage and procurement

Progress with spreading the benefits of the Scottish Living Wage depends on a robust approach to public sector procurement.

The Procurement Reform Bill reaches its final stage in the Scottish Parliament next week and one of the most contentious issues has been the exclusion of the Scottish Living Wage. Labour's James Kelly MSP, who also led a separate debate on this issue, makes the case well in his recent Scotland on Sunday article. He is supported by a large civil society coalition who campaigned on this and other procurement issues.

In fairness to the Scottish Government, no one doubts their commitment to the Scottish Living Wage. Scotland leads the way in the UK with the implementation of the living wage across almost all the public sector. They have also funded an accreditation project that aims to encourage more private sector employers to adopt the living wage. The gap is procurement and this is largely due to the muddle and confusion over EU law.

The muddle is largely of their own making because they sent a very unwise letter seeking clarification from the EU Commission in 2012 that formed the basis for the current guidance. Daft letters tend to elicit daft answers and that is what they got. We had a perfectly straightforward statement from the Commission in 2009 setting out the way the living wage could be applied in procurement. That approach is supported by the counsel opinion we provided to the Committee considering the Bill. Only last week the EU Commission repeated their position, when they corrected another unwise speech from the First Minister blaming the EU for the problem.

Despite all this, I am pleased to say that we are now making some very real progress. The Deputy First Minister has tabled amendments to the Bill that does introduce the living wage for the first time. This approach gives public bodies legal clarity and a way of introducing the living wage into procurement. They will now be able to include the living wage in their procurement strategies in a way that will make it clear to contractors that, for relevant procurements, they will evaluate bids taking their employment policies including the living wage into account. That will then be included in the contract and can be enforced through contract performance.

This will be set out in more detail in the statutory guidance that public bodies 'must' take into account in relevant procurements. We have been given a very clear assurance from the DFM that the guidance will be robust, actively enforced and we will be involved in its drafting.

This is important because past experience has not always been positive in this regard. In particular, we already have the Local Government in Scotland Act s52 guidance that was supposed to end the two tier workforce. However, that has been poorly followed by many authorities. The irony is that if authorities properly applied s52 then the living wage would already be mandatory in public procurement. That's because the guidance covers not only new outsourcing, but also to a change of provider. As councils pay the living wage that should be specified in the contract now to avoid a two tier workforce.

Of course we still believe that the Scottish Government could go further and make the Scottish Living Wage mandatory. The legal basis is clear and the grounds for legal challenge minimal, not to mention unlikely for the reasons I set out to the Committee. But governments are cautious beasts when it comes to legislation and the DFM has promised to pursue the issue further with the EU Commission. Verbally this time!

The absence of a mandatory provision means that public bodies might not make the necessary changes to their procurement policies. The main issue here is cost and the key area is social care contracts. This is being addressed in other forums and progress on this issue is the next big step forward. We believe the costs are not massive and in any case the current arrangements are indefensible, as UNISON Scotland's 'Time to Care' report shows.

So not everything we would want, but very real progress and potential light at the end of this very long tunnel. The Scottish Living Wage makes a big contribution towards tackling in-work poverty and promoting sustained economic growth. Using Scotland's substantial public procurement spend will be a big step forward.

 

Thursday, 8 May 2014

Sustained economic recovery needs wage growth

The much vaunted economic 'recovery' won't be sustained for workers until we see real wage growth. Despite optimistic UK government forecasts, there is little evidence that that is likely to happen.

Professor David Blanchflower, a former member of the MPC and CEP, and Stephen Machin have taken a detailed look at the evidence and have concluded that unless the division of economic growth becomes more fairly shared and productivity boosted to generate wage gains for all workers, then poor real wage outcomes for typical workers may be here to stay.

They argue that median wages seem to have become ‘decoupled’ from productivity growth because of rising inequality, which means that a growing share of the value from productivity growth is absorbed by pensions and higher salaries for top earners. For significant real wage growth to reemerge, productivity would need a sharp increase of the kind experienced much earlier in the UK recessions of the early 1980s and early 1990s. There are few signs of this happening, and the problem has been magnified by the UK’s dismal investment rates.

Even if productivity were to rise rapidly, the unequal division of wages from productivity gains to the top (like bankers’ bonuses) would need to be addressed. This is a point also made in the groundbreaking work of French economist Thomas Piketty, who argues that reductions in the top rate of tax encouraged senior managers to pay themselves more, further widening inequality.

Blanchflower also states that the economy is still well below full employment and there is a large amount of slack in the labour market. There is little evidence of widespread skill shortages, which would push up wages. Another important factor from a UNISON perspective is that public sector pay restraint with continuing redundancies reduces wage growth in a big sector of the economy.

For these reasons improved economic performance doesn't necessarily result in wage growth. As Blanchflower puts it, "Firms have started to perform better so their ability to raise pay levels may have increased slightly – but so far we see no evidence of any change in their willingness to pay. In line with our discussion of inequality, this does raise a key question: why, if nothing changes, wouldn’t they continue to keep any gains to themselves? It stretches credulity to believe that all of a sudden bosses will hand over pay increases to their workers when they have shown no inclination to do so for several years."

Taking a similar line, Simon Wren-Lewis from Oxford University argues that critics of the UK government should focus on the “wasted years” of 2010-2012, and on the fall in median incomes over the last five years. The economic issues for today and tomorrow, should be a focus on inequality. He concludes, "To sum up, the recovery is welcome: it is not an illusion, but neither does it atone for the sins of the past. Above all else, it must not lead to complacency. We have still a long way to go to repair all the damage caused by the recession. Even when that has been done, the problems that led to the financial crisis have not been fixed. We remain dangerously vulnerable to any future large negative demand shock."

Desperate attempts by the Chancellor to spin wage growth shouldn't fool anyone. Until there is real wage growth and serious efforts to tackle inequality, the recovery will be at risk. Wage restraint in the public sector simply adds to that risk.

 

Friday, 2 May 2014

Scotland's public water service continues to deliver

Scotland's public water service continues to deliver high levels of investment with charge increases below the rate of inflation. However, they persist in disowning their public corporation status and we the consumer continue to waste £millions on bottled water

Scottish Water has published capital investment plans totalling £3.5bn for the period 2015 to 2021. The overall cost of delivering the plan will be £8bn. met by customer charges of £7bn and net new government borrowing of £720m. There will be a fixed nominal annual price increase of 1.6% for the years 2015/16, 2016/17 and 2017/18. Well below the rate of inflation.

Scottish Water said: "We expect that our future capital investment requirements will remain around £500 million per annum (in 2012/13 prices) as a result of increasing capital maintenance requirements and ongoing investment to improve services to meet customers' expectations in areas of water supply resilience and prevention of flooding from sewers."

These plans show the continuing benefits of having a public water service in Scotland that doesn't have to fund private profit. Not that you would recognise that from Scottish Water publications that talk about being a trusted 'business', rather than a public service. Scottish Water subsidiary, Business Stream talks about customers cutting £36 million from their consumption-related water bills due to the introduction of competition. This is simply nonsense, what's happened is that 'customers' have been helped to invest in water efficiency measures - nothing to do with competition.

Despite getting high quality water from the tap, the UK market for bottled water is now worth £1.6 billion per year and Britons drink more bottled water than fruit juices or wines and spirits. Consumption per person exceeded 34 litres in 2012, up from 26.9 litres in 2001 and is set to reach 40 litres per person by the end of the decade.

Given the fact that UK tap water is widely considered to better for you than the bottled variety and subject to more stringent safety checks, why do we insist on purchasing something which is up to 300 times more expensive than what comes out of our taps?

It is of course a triumph of marketing over common sense, but with a big environmental kick. Plastic bottles add massively to pollution and clog up landfill sites. Professor Paul Younger puts it well, “The bottled water industry is very largely a scam, and a very expensive one at that, in terms of both money and extravagant carbon footprint.”

So let's celebrate our public water service even if Scottish Water dreams of privatisation. We might also drink more of it and help the environment at the same time.

 

Thursday, 1 May 2014

Fighting Low Pay

The new Joseph Rowntree Foundation report on “Rewarding Work for Low Paid Workers” reveals the complexity of low pay in the UK. The report looks at how effective human resources and development practices are for tackling in work poverty and whether a business case could be made to persuade low paying employer to increase wages.

The report contains detail on patterns of low pay in the UK which campaigners may find useful.

JRF make clear that voluntarism (waiting for companies to just raise pay themselves) "faces an uphill struggle if it’s to successfully reduce the relatively high incidence of low wage/low quality employment in the UK economy”. There is no substitute; it seems, for trade union action when it comes to improving workers lives.

There are now more people living in poverty in households with work than in households with no work.

5% of jobs (around 1.5 million) are minimum wage jobs (NMW) in the UK. And 20% of workers (5million) earn less than the Living Wage £7.65 per hour. This places the UK second only to the US in having high numbers of low paid workers.

The report also shows that the relationship between low pay and in work poverty is complex. Multi earner households even on low pay can avoid poverty just as a single earner can be living in poverty on a reasonable wage if they have non- working dependants. In fact 44% of adults in working poverty aren’t low paid.

Hospitality, retail and cleaning sectors are the worst offenders. They account for 54% of minimum wage jobs. Social care, transport, food processing and storage account for 4% each.

The incidence of low pay rises as the size of the organisation falls. Minimum wage jobs account one in 20 jobs in a large firms but one in 12 in small firms.

A 2011 survey (Workplace Employment Relations Survey WERS) showed that in one in six private sector workplaces one in four employees were paid an hourly rate below the adult NMW. The proportion in the public sector is one in forty. It’s no coincidence that trade unions have stronger representation in the latter.

The continued outsourcing of care and cleaning jobs from the public sector raises real concerns for the future wage rates of workers in these sectors.

What is clear is that low pay while not the sole determinant is a key factor in ensuring that many people live in poverty. And in work poverty costs the rest of us money.

If the Living Wage was paid across the UK we would save £3.6billion through a combination of increased tax revenues, higher National Insurance Contributions and reduced spending on tax credits. In short our taxes subsidise low paying companies’ profits.

UNISONs proposals to the Procurement Bill, currently being taken up by the Scottish Government, to guarantee the living wage and open up public contracts to smaller companies will help reduce the incidence of low pay. Joining a union and fighting for your rights will be even better