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 firstname.lastname@example.org. For other information on what's happening in UNISON Scotland please visit our website.
Thursday, 17 December 2015
Wednesday, 9 December 2015
While sound and fury explodes all around us on NHS spending, spare a thought for the crisis in Scotland's social care system.
Today, I was in parliament for the launch of the Commission for the Provision of Quality Care in Scotland report. The Commission was established by Neil Findlay MSP when he was Shadow Cabinet for Health and Wellbeing with the aim of reviewing how we can improve the way adult social care is delivered. It was Chaired by David Kelly who was a Director of one of the first Community Health and Care Partnerships in Scotland and brought together all the main stakeholders.
The strength of this Commission and the earlier one on health inequalities is two fold. Firstly, they address issues that don't get nearly enough attention in the Scottish health debate, that at times seems obsessed by A&E waiting times to exclusion of all else! Secondly, Neil was very clear in his remit that he didn't just want another analysis of the issues (something we are very good at in Scotland), he wanted solutions. Even if the solutions might be politically difficult.
The report starts with a stark assessment of the current position. We have an ageing population with an increase in multi-morbidity and long term conditions. In disadvantaged areas the most common co-morbidity is mental health and this combination has a strong association with health inequalities and negative outcomes for individuals and families.
These additional demands bring with them associated costs. The report estimates a real term increase of up to £2bn per annum will be required by our health and social care system by 2025. With a small growth in the size of the overall population this is likely to place an increasing tax burden on the working age population. The recent IPPR report reinforces this point.
During the years of Tory austerity the Scottish NHS budget has had a degree of protection at the expense of other public services including social care.This approach has failed to recognise the inextricably linked relationship between acute hospital care and care in the community. The consequences can be seen in the numbers of patients blocking beds in our hospitals and a £5million increase in the amount councils are having to generate from charging income for social care in order to compensate for the financial shortfalls.
The report describes the complex and frankly inadequate ways the quality of care is assessed in Scotland. UNISON Scotland's 'Time to Care' report starkly set out the views of care staff over the quality of care they are forced to deliver. While in the main health and social care services are provided good levels of quality, there are still too many examples of poor quality. The report concludes that general trends about quality cannot be ignored. In particular, the connection between the quality of staffing, working conditions, and quality of care is a matter of primary importance.
The workforce chapter seeks to address a key component of this. The Commission recognises that more than anything else, the payment of the living wage and a general improvement of terms and conditions will be required to deliver a social care workforce consistent with our aspirations for quality care. This view is shared by the evidence submitted to the Commission from both trade unions and employers across the public, private and voluntary sectors. The contracting race to the bottom in care provision has to stop.
Since the report was written the social care crisis has if anything got worse and today councils and providers in England are making similar points. We have residential and homecare providers in in very difficult financial circumstances, drawing on reserves and some are struggling to meet even day to day cash flow. Others have significant vacancy rates and increasing staff turnover. Social workers in care of the elderly teams report that it is becoming increasingly difficult to find a provider to deliver care packages in some parts of the country.
Pay is but one element of fair work. The Commission commends UNISON's Ethical Care Charter that includes the wider considerations that commissioners of home care should account for when contracting. These include training, induction, travel time, ending zero-hours contracts and most importantly ensuring that there is time to care.
The Scottish Government's standard response to concerns about social care is to refer to the new Integrated Joint Board's that aim to provide a seamless care service. While the Commission supports this approach, it recognises that this structural change will not in itself be enough. The recent Audit Scotland report confirms this. Despite the Kerr report and much talk about preventative spending, we have not been able to break the public perception that everyone should have a district general hospital within ten minutes of their house – nor the political pressure to satisfy that thirst.
The Commission argues that a top-down approach to the commissioning of services will fail to deliver responsive care and support. The report places an emphasis on getting locality planning right building on the knowledge and capacity of local people about their own wellbeing. It also recognises that best practice needs to be supported and rewarded. Equally, there is a need to work with poorly performing locality teams to improve outcomes. We need to recognise that not all differences in outcomes are down to differential resources. It can reflect poor leadership, organisation and bad practice.
Housing provision also needs to change if we are to address the needs of an ageing population. All too often, a person will move from their family home into a care home via a period in hospital.This is partly because of the lack of suitable alternatives at local level. We need to build new, affordable and sustainable housing, with a range of house types and sizes that encourages mobility in the housing system and enables downsizing for those that wish it. Housing support services currently play a small, but significant, role in supporting older people to remain living at home and needs to be expanded.
A key recommendation of the Commission is that we fundamentally rearticulate the basic social contract between the citizen and state based on the principle of reciprocity.That people contribute to the wider social good through payment of tax and direct contribution to care and support – and in return people receive high quality care and support when they need it and irrespective of their financial circumstances. This means addressing the current differences between services free at the point of use such as healthcare and some social care, but not for those under the age of 65.
As such, the Commission arrives at a new and more robust social contract: the responsibility of the state is to ensure that citizens with personal care needs receive that care free at the point of use; and that citizens are otherwise responsible for their daily living costs and additional support requirements, funded from personal wealth or income, or for those citizens who are less well off, from welfare support.
Finally, the Commission addresses the question of funding. A properly funded and organised social care system would actually save money. For example, a bed in a District General Hospital costs in the order of £2,500 per week, as compared with £500-£800 per week for a care home and even less for home care. The Commission points to work done elsewhere in the UK on the options for addressing the funding gap, something we have simply ducked in Scotland. A national conversation needs to be informed by a detailed examination of the spending gap and how that might be funded. The Commission makes no claim that its work is sufficiently detailed to be a definitive statement on this issue. However, they do say that it is sufficiently large that it cannot be wished away or ignored.
The value of this Commission report is that it does more than simply analyse the scale of the problem, important though that it is if we as citizens are to grasp the importance of social care. The Commission goes much further in describing what a quality care might look like and how it should be delivered. It also doesn't duck the need for a new social contract and the necessary conversation about funding.
Thursday, 3 December 2015
The Public Bodies (Joint Working) (Scotland) Act 2014 aims to ensure health and social care services are well integrated and that people receive the care they need at the right time and in the right setting, with a focus on community-based and preventative care.
Despite this progress, Audit Scotland have identified significant risks which need to be addressed and they argue that IAs will not be in a position to make a major impact during 2016/17. Difficulties in agreeing budgets and uncertainty about longer-term funding mean that they have not yet set out comprehensive strategic plans. Many IAs have still to set out clear targets and timescales showing how they will make a difference to people who use health and social care services.
The report also points to the complexity of the proposed governance arrangements, with some uncertainty about how they will work in practice. This will make it difficult for staff and the public to understand who is responsible for the care they receive.
There are significant long-term workforce issues identified in the report with IAs inheriting workforces that have been organised in response to budget pressures rather than strategic needs. Other issues include different terms and conditions for NHS and council staff, and difficulties in recruiting and retaining GPs and care staff. They identify three main workforce difficulties:
- Financial pressures on the NHS and councils. NHS boards and councils continue to face pressures from tightening budgets and rising demand for services. Most councils have responded to these pressures in part by reducing staff numbers and outsourcing some services to the private and voluntary sectors. These changes are less evident in the health sector. As a result, there are concerns that any future changes to the workforce will not affect health and care staff equally.
- Difficulties in recruiting and retaining social care staff. Over many years, councils have had difficulties recruiting and retaining care home and home care staff. Organisations in areas such as Edinburgh and Aberdeen, with high living costs, have had particular difficulties. There is a need to develop a valued, stable, skilled and motivated workforce. We found examples of organisations developing new approaches to making careers in caring more attractive. For example in Dumfries and Galloway and Aberdeen City they are considering creating caring roles that are part of a defined career path, to encourage more people into these roles.
- The role of the voluntary and private sectors. Voluntary and private organisations play an important role in providing care and support, but there are particular challenges in how IJBs can involve these diverse organisations as part of a coordinated workforce plan. The introduction of the national living wage will have a significant impact on the voluntary sector and their ability to provide the same level of support for health and care services.
Overall, this report is a useful description of the current state of play in developing health and care integration. It also highlights a number of concerns over the pace of progress and the financial and other pressures the new arrangements will face.
Monday, 30 November 2015
MSP’s have highlighted today how local government pension funds could make a useful contribution to infrastructure in Scotland.
The Scottish Parliament’s Local Government and Regeneration Committee has published a report on pension fund investment in infrastructure and City Deal spend. This is a good analysis of the current position and they examine the barriers to infrastructure and other socially useful investment.
The Committee draws attention to the UNISON Scotland report Funding and building the homes Scotland needs 2013. I wrote this paper with assistance from the Scottish Federation of Housing Associations. It called for local authority pension funds, with Government backing, to invest in Registered Social Landlords providing low risk and socially useful investment. Sadly, nearly three years later, there has been only a limited take up of this proposal, while £billions have been invested in overseas equities – not to mention arms companies, tobacco firms and fossil fuels.
The Committee identifies a number of barriers to infrastructure investment. Most of these have been recognised by the Scheme Advisory Board (SAB) for the Scottish LGPS and are included in their current workplan.
The investment regulations limit the amount of investment each fund is allowed to invest in infrastructure and other categories. These are overly prescriptive and the SAB at its last meeting recommended abolishing them and replacing the regulations with a more flexible code of practice.
Another barrier is lack of expertise. In effect pension funds invest in what they are comfortable with or as the Government Actuary Department (GAD) put it: “GAD considered funds didn’t invest in infrastructure because of a lack of necessary expertise to assess and quantify the risks involved, so they preferred to invest in assets with an established income stream.”
The obvious solution is to recruit the expertise. This is linked to an over reliance on expensive external investment managers. Lothian Pension Fund is probably one of the better examples of building in-house capacity in Scotland, but the best UK example is West Yorkshire, as the report notes:
“37. Our attention was also drawn to WYPF and its approach to in-house investment management. In its written submission, it gave a number of advantages over externally managed funds, namely the speed of identifying potential infrastructure opportunities, the speed of authorisation for new infrastructure investments and the ability to manage investments over the longer term as in-house investment managers were free to make investment decisions based on a long-term assessment of the investment and returns.
38. This in-house approach enabled the Fund to gear its strategy towards low risk investments, over a longer period of time, and to keep fee costs down to achieve a 96% funded scheme.”
Fiduciary duty is also claimed to be a barrier to infrastructure investment. In my view this has been interpreted too conservatively by some funds in advice to their pension committee/boards. The report urges funds; “which haven’t yet considered these types of investment, to challenge themselves to do likewise and give a degree of priority to investing members’ funds more locally and building in elements of public good”. This is sound advice and I have written a briefing on fiduciary duty for our members on pension boards that sets out how this can be done. The SAB has also commissioned further legal advice and plans to issue guidance to funds on this issue next year. As the committee puts it; “We make the point that without some degree of risk taking, innovation will not happen. We see parallels with the taking of a narrow interpretation of the fiduciary duty”
The report briefly touches on the pooling of funds as one way over reducing costs and building expertise. This follows the UK Government’s decision to push funds in England and Wales into six ‘wealth funds’. Guidance on this was published last week as part of the Chancellor’s Autumn Statement. The Committee was ‘less attracted’ to this formal approach, drawing attention to the informal links that exist between funds in Scotland. The SAB has this issue in its workplan and is starting with new data collection tools that should inform this exercise. Pooling investment is not just an issue for infrastructure investment. It is also a means of improving transparency and reducing the very high costs of external investment.
Finally, the Committee looked at the topical issue of ethical investment and concluded:
“43. While considering rates of return, it would be remiss of us not to consider investments in certain industries, for example, fossil fuels, arms and tobacco. These might provide a high rate of return but we question whether local government pension funds should be investing in such industries given social, environmental and ethical considerations. We note Strathclyde Pension Fund’s view these industries would be less responsible if public pensions did not invest and also that collective action by investors can have a greater influence on the industry. We consider funds should be guided by consultation with their members on this issue.”
The Committee is right to question such investments as UNISON representatives have been doing at pension boards. While pension funds are part of local government they are also bound by public law duties that government has placed on councils, such as climate change.
Overall, this short inquiry is a useful overview of pension funds and infrastructure investment and well worth a read. Most of the issues they have identified are being taken forward by the SAB, but there is also an issue of pension fund culture to be addressed. That may be a more intractable challenge.
Wednesday, 25 November 2015
Economists at the Health Foundation and the Institute for Public Policy Research (IPPR) have published a report that looks at the scope for public funding to match these pressures and what the potential funding gap for health and social care looks like. They model the potential revenue that might be raised by different taxes to fill a health and social care funding gap, the distributional impact of the different tax options and how they compare to the profile of the ‘beneficiaries’ of additional health and social care spending.
While the analysis starts from English spending, they do try and extrapolate the numbers to paint a UK wide picture. The pressures in Scotland are in any case very similar. The solutions in Scotland may be different because of our different policy approaches, like 'free' care for the elderly.
The main findings are:
•Our analysis shows that despite government commitments to additional funding for the NHS in the UK, there is still likely to be a shortfall of £2bn in 2020/21, rising to £9bn (above inflation) by 2030/31.
•For adult social care the pressures are greater. We forecast a funding shortfall of £6bn by 2020/21, rising to £13bn in 2030/31, assuming there is no change in policy.
•The projected health funding gap of £9bn in 2030/31 is worth 5% of the projected budget that year; for adult social care the funding gap of £13bn is equivalent to 62% of the total expected budget for 2030/31.
•The combined pressures on health and social care funding will amount to an estimated shortfall of £8bn in 2020/21 and £22bn in 2030/31.
•The government has committed to eliminating the deficit in the national budget by 2019/20 and is planning to run a surplus of £10.5bn (0.5% of GDP) by 2020/21. If the planned fiscal surplus of 0.5% of GDP were spent on health and adult social care, it would close the combined funding gap in 2020/21, but leave an estimated shortfall of £8.4bn in 2030/31.
•One alternative to taxing income and employment is to tax consumption and in particular consumption that has a harmful effect on health – a so called ‘sin-tax’. The report looks at taxing sugar specifically.
•There are choices that need to be made about the medium to long term financing of health and adult social care. One option is to bridge some of the gap through a lower public finance surplus than currently planned; another is to increase taxes.
•While our analysis suggests that the NHS faces considerable pressures, it does not appear unsustainable. However, there must now be real doubts about the sustainability of the current financing system for adult social care.
Social care funding in Scotland is already at crisis point. This report shows that funding pressures are not going to get any easier and some very tough political decisions will be required.
Tuesday, 24 November 2015
IT systems that are crucial to reform have suffered from delays and overspend. Getting systems right is not just about cost and efficiency, as the M9 tragedy showed. The HMICS report has taken into account the high level of pressure that UNISON police staff members work under in the Contact, Command and Control (C3) division of Police Scotland. Let’s hope this report shapes the C3 direction with greater accountability and assurances for the public.
The unique and major flaw in police reform has been the cosmetic police officer number target that should have corrected when Police Scotland was created. This flaw does not allow management to make the right Best Value decisions to create an effective, efficient, modern police force for Scotland. It’s time to change course or it will only get worse.
Friday, 13 November 2015
Given the short term thinking that bedevils much political thinking, we can be forgiven for looking cynically at government targets that stretch long ahead of the political cycle. However, sometimes they catch up with governments. One such legislative target is the eradication of fuel poverty in Scotland by November 2016.
This target is given some focus for me today, as I am chairing a session at the annual conference of the fuel poverty charity Energy Action Scotland. UNISON Scotland is affiliated to this campaigning charity that also delivers a wide range of practical actions to help alleviate fuel poverty.
Fuel poverty is defined as a household having to spend 10% or more of its income on energy to maintain a warm home. When I first got involved it was almost exclusively an issue for the elderly - no longer.
A recent report by Citizen's Advice Scotland told the story of a father of a two-week old baby who was left without any money for gas and electricity, after being told he had to wait two weeks for a Universal Credit payment. Another case in the east of Scotland involved a couple with a nine-month-old baby girl being left without any money for food or gas and electricity. Their benefit was stopped by the Department of Work and Pensions after it claimed a sick note had not been received - even though it had been sent the previous week.
According to CAS, the number of Scots in 'fuel poverty' has soared by 130% in the past five years, with shocking cases of struggling households being left for months without any means of heating or cooking. They dealt with 28,000 cases involving energy issues in 2014-15 – an increase of a third from the previous year and up 130% since 2011.
Energy Action Scotland's Director Norrie Kerr, has also said that they see a lot of younger people in fuel poverty who are on the minimum wage or less than the minimum wage, who are really struggling just to make ends meet: “It is not just about pensioners any more, it is about in-work poverty. When you are being squeezed like that there is the very real dilemma for people between heating and eating. In some cases foodbanks are being asked for food parcels that don’t require people to heat anything, because they are frightened to put on the cooker to boil a pan of pasta or heat a tin of beans."
So, are we going to meet the legislative requirement to eliminate fuel poverty by November 2016? Based on what we heard at today's conference, almost certainly not. Are we making sufficient effort to try and reach this target? Again probably not.
One particular disappointment is the Scottish Government's decision to postpone a consultation on energy efficiency measures in private sector housing. This is the fastest growing housing sector and landlords need help and support, and tenants need protection against unjustified rent increases. CAS covered this issue well in their report 'Coming in from the Cold'.
Funds have been made available for fuel poverty, but it simply isn't enough. We heard about a some measures and more task groups and reviews. As with other policy areas we are very good in Scotland at analysing the problem - less good at making difficult decisions to solve them. Equally the UK government programmes are also inadequate, but as some are to be devolved, we have an opportunity to bring programmes together and do some things differently.
Energy efficiency is only one aspect of the measures needed to tackle fuel poverty. The other two are the price of energy and income support. Action on prices have been limited with the cost going up by 180% between 2002 and 2013. If prices had gone up with inflation fuel poverty in Scotland would be below 11% of households, instead of 39%. It has only been helped very recently by the drop in wholesale prices - rather than government action over the failed energy market.
Government's put great emphasis on switching supplier and there has been some increased take up recently. However, it is far from a smooth process. I recently switched supplier and was presented with an absurd estimated opening gas reading that was almost double my last bill. As a consequence I was presented with a bill for £3,600!
On income support, the U.K. Government's slashing of social security is having a devastating impact on low income families in and out of work. We should also not forget the cut in real wages over a decade or more. This is something the Scottish Government could do more on, including the living wage for care workers. As Jackie Baillie reminded us today, the £1300 cut in Tax Credits is the equivalent of the average annual fuel bill.
If the same number of people suffering from fuel poverty had an illness or disease we would be crying out for the government to take action by pouring resources into the NHS. It's time to treat fuel poverty with the priority it deserves.
Wednesday, 11 November 2015
The Scottish economy is slowing and cuts to tax credits for low paid workers won't help.
Strathclyde University’s Fraser of Allander Institute has published its latest commentary. It shows that the Scottish economy had slowed both in absolute terms and relative to the UK. The divergence with the UK has occurred even though expansion in the UK as a whole was slowing significantly.
Editor, Brian Ashcroft, also urged Chancellor George Osborne to think again about his planned £4.4 billion per annum of cuts in tax credits. He highlighted the impact on domestic demand and UK economic growth. He said: “The overall plan is to take £12 billion out of the economy, which is quite large. Tax credits are quite a large component of that. You are taking money away from individuals who would spend that money, whereas other people with more money would save more of it. There is a direct impact on spending that is going to affect demand in the economy.”
This supports the message of UNISON General Secretary Dave Prentis on tax credits, he said: “Mums and dads – who are already walking a financial tightrope because money is so tight – have been having sleepless nights at the thought of losing as much as £50 a week next April. Working families will now hope the government re-thinks its heartless decision to snatch so much away from so many.”
This is because Tax Credit cuts cannot be balanced simply by raising wages. Tax Credits were introduced to support working families by recognising the extra expenses of raising a family, a role businesses cannot be expected to fill, and are paid to households rather than to individual workers.
The Allander analysis has been reinforced by today's labour market statistics. As the STUC commentary says:
“This was another disappointing set of statistics which confirms the swift reversal in Scotland’s labour market recovery. Over seven and a half years since the recession took hold, Scotland’s unemployment rate is still precisely 50% higher than its pre-recession trough. While all age employment has seen a very small increase over the year, growth is now basically stagnant. If jobs cannot be found for people returning to the labour market then unemployment is unlikely to fall over the coming year. The prolonged period when women benefitted disproportionately from the labour market recovery has now ended with women accounting for most of the rise in unemployment. The small increase in total all age employment also disguises a significant fall in employment for women."
And there is little good news on wages. As this TUC chart shows, today’s Average Weekly Earnings figures show what is beginning to looks very like a pause in the recent improvements. This is reason to worry that stalling earnings may again act to stifle household demand.
The Chancellor's Autumn Statement on 25 November will be an important indicator of what action he will take to support the economy. The Scottish Government will then publish its spending plans for next year. Action on jobs and wages should be their priority.
Monday, 9 November 2015
A new UNISON Scotland Briefing has been published explaining how public bodies can use procurement to extend the Scottish Living Wage to all those working in public services.
Nearly all public sector workers in Scotland are now paid the Living Wage, (uprated this month to £8.25 per hour) but thousands who deliver public services in the community and private sectors don't yet receive it, particularly in social care.
New Statutory Guidance from the Scottish Government sets out how the Procurement Reform (Scotland) Act 2014 enables all public bodies to spread the benefits. Previous legal objections no longer apply.
Infrastructure Secretary Keith Brown said that employers "must now recognise that they cannot adopt exploitative practices in relation to their workers and expect... lucrative public contracts."
The Guidance on Addressing Fair Work Practices sets out how public bodies can legally include payment of the Living Wage in contracts, along with other employment matters, such as trade union recognition and representation and no "inappropriate" use of zero hours contracts.
(The Living Wage is a voluntary level for over 18s, higher than the current statutory National Minimum Wage (NMW) of £6.70 per hour for over 21s. It is an independent calculation of what is required to cover the basic cost of living.
While the increased legal minimum announced by Chancellor George Osborne as a new National Living Wage (NLW) of £7.20 per hour for over 25s in his July 2015 Budget is welcome, it is in effect a higher NMW, not a real living wage. It is nothing like enough to compensate for cuts to tax credits. IPPR Scotland said for low and middle income Scottish families the impact is "vastly outweighed" by the cuts.)
It is vital to progress the Living Wage in social care, which is facing a growing staffing crisis. The Scottish Government, COSLA and care providers are currently involved in discussions about how best to drive up pay in the care at home/housing support sector, recognising the links between pay, quality of care, retention and recruitment etc.
An interim funding deal is likely, with work continuing on a more robust proposal for 2016/17, alongside analysis of the full financial impact of the NLW 2016 to 2020 announcement and the overall cost of residential and non-residential social care.
UNISON wants to see the Living Wage included in all social care contracts and will also press our Ethical Care Charter. However, we accept that this has to be fully funded. We welcome the Scottish Labour party's proposal to pay the Living Wage to all those working in social care.
UNISON branches should study the guidance in detail and ensure that public bodies: revise their procurement strategy to include the Scottish Living Wage; specify compliance with the S52 guidance in procurement documents and the consequences for the LW; revise their tender evaluation procedures to take account of the LW and other employment and 'fair work' standards. These can include no zero or nominal-hours contracts, trade union recognition and the Ethical Care Charter.
Under the Act, public bodies are required to set out their general policy on the Living Wage in their procurement strategy. Bids can be evaluated against that policy and payment of the Living Wage can become an enforceable performance clause. For contracts with a strong workforce element, such as social care, there can be a significant weighting in the evaluation for workforce matters.
With a civil society coalition behind '10 Asks' on the legislation, we had called for the Living Wage to be mandatory for all those working on public contracts. The guidance does not go that far but is an improvement.
UNISON still believes that EU law would allow it to be set as a contract condition. Advocate General Mengozzi's opinion, given on 9 September 2015 in RegioPost GmbH v Stadt Landau (C-115/14), was that EU law did not prevent contracting authorities setting conditions relating to the payment of minimum wages.
Further Statutory Guidance later in 2015 will cover areas including the Sustainable Procurement Duty, fair trade and tax dodging. There is separate guidance on blacklisting.
Wednesday, 4 November 2015
Today’s report by the Institute of Civil Engineers suggesting the introduction of road tolls to fund repairs highlights the impact of funding cuts and tax freezes on public services. They state that one third of our roads are in an unacceptable condition and that we need to spend about £250 million a year to stop it getting worse.
Yet again we are talking about replacing progressive taxation to pay for services with charges which bear no relation to people’s ability to pay. UNISON and Audit Scotland have already highlighted this growing trend. Meanwhile budget cuts are no longer being able to be met by salami slicing and non replacement of staff. Councils are discussing major cuts to service provision.
Falkirk Council is facing £45m cuts over three years, Fife £77m. Glasgow is facing a 7% budget cut: 3000 jobs are at risk. Edinburgh, with cuts of £126m over four years, is claiming that it may not be able to stick to its no compulsory redundancy agreement.
North Lanarkshire Council is discussing plans to meet a budget hole of £68 million pounds: which will involve the loss of 1100 job. This will have a massive impact on businesses in the area. West Dunbartonshire is discussing cutting winter gritting, doing away with free school milk, ending its elderly respite care and reducing crisis support for teens. Plans to meet the budget cuts also include increasing charges for school dinners and bulk refuse uplifts.
One of the many problems with these plans is that they will actually lead to increased costs in other budgets. Less gritting means more falls so more broken bones and higher costs for the NHS. Less respite care puts more pressure on carers impacting on their own health and ability to provide care leading to need for more expensive acute services for both carers and the people they care for. Reduced support for crisis teens can lead to those young people harming themselves and others which increased need for acute mental health services and increased crime and anti social behaviour, adding costs to the police and prison services. We are supposed to be focusing on preventative spending instead we are just storing up costly problems for the future.
Another example is the impact of cuts in trading standards departments. An article in the Herald shows that councils have lost one in eight of trading standards officers since a 2013 report warned the service was under threat. This means rogue traders are able to exploit shoppers much more easily. This not only impacts on people who buy shoddy or even dangerous goods but seriously impacts on legitimate businesses who lose customers to the cowboys.
Relying on increased charges to increase income is much less fair than using taxation. It could lead to more dumping and therefore increased costs in terms of clearing up the mess and young people eating cheaper less healthy food outwith schools or going without.
No matter what the politicians are saying local government is facing a massive financial black hole.
Wednesday, 7 October 2015
A £350m contract to provide water and wastewater to Scotland’s public sector has been awarded to a privatised utility firm in East Anglia. Confused?
Scotland has a public water corporation, Scottish Water that is accountable to Scottish Ministers and the Scottish Parliament. Scottish Water is responsible for the provision of water and waste water services to almost all domestic and non-domestic properties and for maintaining the public system.
However, there is competition in the provision of customer-facing activities such as billing, charge collection, meter-reading and complaints handling for non-domestic customers in Scotland. This means that Scottish Water levies a wholesale charge on licensed retailers for non-domestic customers. Licensed retailers can agree their own charges with customers, subject to them being no higher than a default tariff set by the Water Industry Commission Scotland (WICS). Scottish Water is also a retailer; through its own retail arm Business Stream, which provides a service to the vast majority of non-domestic customers in Scotland.
The market was created by the Water Services etc. (Scotland) Act 2005. The then Labour led administration was persuaded that this was the least they could get away with due to the provisions of the UK Competition Act 1998. The 2005 Act prohibited common carriage and household competition and put a licensing regime in place for non-domestic competition. UNISON Scotland opposed the legislation and would argue that it has simply created an unnecessary bureaucracy. The claimed savings are almost entirely down to water efficiency measures that do not require competition to implement.
As the public bodies are non-domestic customers they come under this system of retail competition and the Scottish Government, actually the then Infrastructure Secretary Nicola Sturgeon, put one big contract for public bodies out to tender last August. It could be argued that this was not the best way to organise this tender.
It appears that Anglian Water has submitted the lowest price bid in an evaluation that was 50/50 price and quality. The Scottish Government is not obliged to accept the lowest bid, but it would have to have a good reason for not doing so under the utilities procurement regulations. In fairness, the Scottish Government had few options because the system of retail water competition is the ultimate in market madness. £350m will be paid to Anglian Water in Huntingdon, only for most of that money to be repaid to Scottish Water in wholesale charges. The cost of this crazy system is picked up by the taxpayer. However, it was unwise to include savings from water efficiency measures that should be undertaken anyway to spin out the alleged benefits of the contract.
It would also be interesting to know if the evaluation panel took into consideration the risk that this bid was a loss leader to give Anglian Water a base in Scotland. This is important because contractors who do this squeeze a margin post-contract from quality.
The direct job implications are not likely to be huge, but significant for those impacted. Competition only covers the customer facing services i.e. call centre, customer service and transactional staff within Business Stream.
This procurement also highlights the importance of addressing tax dodging in procurement, an issue UNISON and other civil society organisations campaigned for during the passage of the Procurement Act. There should be pre-qualification disclosure of company taxation policies and public bodies should be able to evaluate a tender on the basis of which company pays tax or not. Assessment of bids could make use of the Fair Tax Mark.
The significance with this contract is that Anglian is one of a number of private water companies who are happy to take taxpayer funded public contracts, but less happy to pay corporation tax. A consortium called Osprey, made up of asset and pension managers in Canada and Australia, owns Anglian Water. Corporate Watch reported that Anglian paid £151 million to its private owners, but just £1 million in tax in 2012, after an operating profit of £363 million. It avoids millions in tax by routing profits through tax havens by way of taking on high-interest loans from their owners through the Channel Islands stock exchange.
Anglian Water was described as a “significant repeat offender” in an Environment Agency report on polluters and was fined for polluting five years in a row. Friends of the Earth said of the company: “Clearly, this company is a classic example of a company which sees pollution fines as a legitimate business expense and doesn't care about the environment”. It would be interesting to know just how much weight the evaluation panel gave to this in their quality weighting.
Non-domestic competition is not the only area of privatisation within Scottish Water. Last year the insider web site Utilities Scotland submitted FoI requests to ascertain the extent of privatisation in the delivery of the water and waste water capital programme. In the last four years, 92.5% of Scottish Water’s capital programme has been delivered by private contractors, 7.5% by Scottish Water staff. By any standard that is substantial privatisation. This is on top of PFI schemes run by a variety of privatised water companies.
We are also concerned about the impact the Transatlantic Trade and Investment Partnership (TTIP) could have for Scotland’s public service model. The greater the privatisation, the easier it will be for overseas corporate interests to challenge our public water system.
Scottish Water works well, is good value for money and water customers support the corporation staying in the public sector. While there were limited options for the Scottish Government on this occasion, we should be aware of the pressures for privatisation and the lessons to be learned for future procurement.
Thursday, 1 October 2015
If we are to create better jobs in Scotland we need to recognise and take action on job security, worker control, appropriate demand, fair pay and opportunities for training and development.
I was giving evidence yesterday to the Scottish Parliament's Energy and Economy Committee's inquiry into work, wages and wellbeing. The evidence to the committee is well summarised in the Spice briefing.
While the impact of low wages and poor quality jobs on individuals and the economy are becoming better understood, it also has an impact on health. Professor Bambra's evidence to the committee argues that low quality work combines low levels of control with high psychological demand which can lead to increased levels of chronic stress, muscoskeletal conditions, heart disease, hypertension, obesity and mental illness.
There is also a strong economic case for better jobs. Well made by Professor Chris Warhurst at today's committee. The outcome of the current race to the bottom is the precariat. In some countries this can constitute as much of 25% of the workforce, whose contracts are either temporary or informal, or who arrive via employment agencies. In Scotland the numbers on zero hours contracts, particularly in the care sector, are understated because they largely ignore workers on nominal hour contracts.
This approach isn't even efficient. A study by economists at Delft University has concluded that a flexible workforce needs an expanded management bureaucracy to oversee it. Because precarity damages trust, loyalty and commitment, it demands more management and control. An entire generation of free-market workers has begun to act according to the factory adage of the old Soviet Union: “We pretend to work, they pretend to pay us.” The researchers conclude: “Easy hire and fire is at the cost of organisational learning, knowledge accumulation and knowledge sharing, thus damaging innovation and labour productivity growth.”
In its evidence to the Low Pay Commission, UNISON has highlighted that the conditions of the economy meet all the key criteria set out by the Low Pay Commission in its 2014 report as necessary for significantly faster increases in the minimum wage. These include; rising real wages in the economy generally, stable employment and an expectation of sustained economic growth.
Other factors supporting an increase in wages are the upward trend in the scale of low pay in the economy. This will be exacerbated by Government cuts to tax credits and other benefits, particularly for workers with families. The value of the National Minimum Wage has been eroded in comparison to the Living Wage and young workers have been penalised through the lower rates and their exclusion from the new so called National 'Living Wage'. At the other end of the scale there is the growth in the income of high earnings groups that has entrenched the UK’s position as one of the most unequal countries among comparable nations that are members of both the EU and OECD.
The committee asked us for specific evidence on the care sector that constitutes nearly 8% of the Scottish workforce and is a sector largely funded by the Scottish Government. The size of the Scottish care workforce has increased to 199,670, an increase of 5.3%. 77% of these work in home care and 85% are women.
There are some very poor employers in this sector and they have been encouraged by poor procurement practice. The Procurement Act and new statutory guidance should enable us to tackle this by evaluating future bids on their workforce policies including the payment of the living wage. However, the better employers rightly say that this must be funded properly. Given the leverage of government money there is an opportunity to develop the sort of sectoral bargaining that has been so successful in raising standards and productivity in other parts of Europe.
The care sector is a good example of where the race to the bottom in job quality and wages takes us. Staff who are desperate to exit the sector, creating high turnover, losing the continuity of care that is so important.
This inquiry is a welcome look at an important and complex issue and I look forward to their conclusions. However, there are practical actions the Scottish Government could take to develop the ideas in the Working Together report and Fair Work Convention. The care sector would be a good place to start.
Friday, 18 September 2015
The university principals’ campaign against the very modest proposals to modernise university governance in Scotland is now bordering on the hysterical.
The Scottish Government’s Higher Education Governance (S) Bill proposes an elected chair of the governing body and two places for trade union representatives. Yes, that’s just about it. These are the devastating plans that will bring our cherished institutions crumbling down – if you believe the hype from Universities Scotland, the HE bosses mouthpiece.
Universities rightfully value their academic freedom and that is not challenged in any way by this bill. In fact, the new definition, if anything, strengthens it. However, this freedom does not exempt them from being governed properly and to be run efficiently and effectively. Better governance of banks could have prevented the collapse of those banks and the ensuing financial crisis and the same is true for charities. There must be independent oversight of how senior management operates in any organisation.
Scottish universities receive a substantial amount of public investment, with budgeted spend of over £4 billion since 2012/13. The public rightly expects the highest standards of governance and accountability to be followed by institutions in Scotland.
The response to these proposals claims that these are radical changes, that the Scottish Government is ending universities independence, that trade union members on boards would not act in the best interests of the institutions and that there is a risk to their charitable status risking millions in philanthropic giving.
These are all nothing short of absurd. A huge range of organisations, including trades unions, are subject to a range of legislation and government oversight. No one believes that the finance industry has been taken over by government because there are rules governing how it operates. There are volumes of company law on how businesses must be run. We have trading standards, environmental health, charity laws, rules surrounding the delivery of energy and telecoms, a charity regulator, utilities and telecoms regulators. Setting out rules for effective governance is not taking over. No one from the Scottish Government will have a role on university governing bodies.
Reclassification by Office of National Statistics (ONS) as a public body is the latest scare story by Universities Scotland. The ONS paper regarding reclassification of further education colleges as public bodies uses universities as a contrast to demonstrate why colleges had been wrongly categorised in the past. It makes it clear why the position of universities is different from colleges and there is nothing in the Bill that relates to those issues. For example, universities have far less government money as a proportion of income and don’t require permission to borrow.
The Scottish Charities Regulator is equally clear about what constitutes a charity and again nothing in this Bill leaves a universities open to a challenge by the regulator. The governing document of the university would have to give ministers the power to “control direct or stop it from carrying out its activities”. It doesn’t.
Universities Scotland had to dig very deep in its objections to trade union representatives – in fact as far back as the 1970’s. It is astonishing that academic leaders can be so unaware of developments in employee engagement. Modern employers understand that employee engagement in running organisations is a very effective way to improve efficiency and effectiveness. Research into partnership working in the NHS indicates just how successful employee involvement is in running large complex organisations.
As Professor Ferdinand von Prondzynski, the head of Robert Gordon University, who led the governance review put it; Scottish universities are inherently conservative institutions which have "survived intact" since the Middle Ages. University bosses have treated their institutions as their personal fiefdoms since medieval times and what they really fear is transparency and accountability.
MSPs should ignored this hysterical misinformation campaign and bring universities, if only just a wee bit, into the real world.
Tuesday, 15 September 2015
Britain’s energy crisis
• Low income consumers are being overcharged
• Crisis of trust in energy companies
• Green finance gap
• UK economy is not benefiting from low-carbon subsidies
• Local energy generation is being held back
Cities account for two thirds of the world’s energy consumption and 70% of global CO2 emissions. Local authorities are well placed to make a substantial impact on the above challenges through producing and selling electricity to their citizens. Munich has a target to supply the whole municipality of one million people with renewable electricity by 2025 and have invested €900m in renewable projects. Energy production offers a much needed source of finance for local authorities in the long term.
Some of Britain’s cities are already have an innovative role in our energy market and local authority pension funds are investing in low carbon projects: Lancashire’s County Pension Fund has committed £200m to low carbon projects. Aberdeen is planning to use hydrogen as a vehicle fuel source which is produced by excess power from offshore wind farms. Bristol has a city solar project where local communities groups can invest in solar installations on council premises.
Business model options for cities
Fully licensed supplier: city authority sets up and delivers electricity Nottingham is pursuing this option
Joint venture: city authority works with third parties to set up and run an independent supplier
Licence lite: city authority becomes junior supplier taking responsibility for some aspects of supply and licensing while senior supplier deals with the rest GLA going down this road
Partnership: city authority works with existing supplier
White label: city authority licences use of its brand to existing suppler who markets to customers in that area.
Done properly local authorities could keep its and citizen’s energy bills low, reduce carbon emissions and ensure energy security. Beyond that there is huge potential for creating and maintaining highly skilled jobs with the many benefits they bring to local economies.
Engaging in the energy supply and targeting low income households with improved tariffs local authorities could make a huge leap in reducing fuel poverty. The report offers three ways that local authorities could invest in carbon reduction: municipal bonds, pension funds and the Green Investment Bank
• Cities should consider engaging in the energy supply market where this promotes local generation and tackling energy affordability
• Cities should explore opportunities for investing in low carbon energy developments through municipal bonds, local authority pension funds and the Green Investment Bank
The report also calls for central government to
• Set up a local authority energy unit
• Encourage all pension funds to adopt the Principles for Responsible Investment
• Design fiscal rules to ensure capital debt from local authority bonds or green municipal bonds do not count against targets for cutting debt
• Give immediate borrowing powers to Green Investment Bank
The report also givens and up to date overview of what local authorities current role and the plans they are developing. Local energy production via city authorities has a substantial potential to improve lives and reduce carbon production. Hopefully we can see a rapid expansion of projects soon.
Effectively tackling harm, abuse and neglect in health and care settings is vitally important, but is more legislation the best way to address this issue?
I was giving evidence to the Scottish Parliament Health Committee today on the Health (Tobacco, Nicotine etc. and Care) (Scotland) Bill. The Bill covers three distinct policy areas: controlling non-medicinal nicotine vapour products (NVPs); tobacco control and smoking on NHS hospital grounds; ill-treatment and wilful neglect; and duty of candour.
UNISON supports the regulation of NVPs on the precautionary principle as we can see the potential risks of these products becoming a gateway to tobacco smoking that has done so much damage to public health. We also support a ban on smoking in hospital grounds.The more controversial proposals relate to legislating for a duty of candour and new criminal offences for ill treatment and wilful neglect.
Care professions generally operate within culture of openness that supports an open discussion of potential harm and the management of risk. It is not clear that a new duty of candour on health and social care services is the best or only way of securing a culture of openness and transparency. It can be argued that consideration should be given to all other avenues for achieving this policy goal. The desired culture change could be secured through guidance, training and improvement support, rather than legislation.
The Bill will certainly create additional costs in excess of the optimistic assumptions in the Bill's financial memorandum. It will increase workload and probably add some bureaucracy that front line staff can do without. IT systems are generally not adequate or joined up to be of much assistance. There will need to be significant training and support.
This legislation could also have unintended consequences. Criminal offences can lead to defensive practice and even a culture of hiding bad practice, rather than the intended transparency. The development of a culture where open and transparent reporting is the norm requires employers to establish clear, no-blame incident reporting systems from which to learn and improve. It is also the case that some definitions in the Bill are less than clear and there is a risk for double or even triple jeopardy, with employment and regulatory procedures.
On the other hand we have to accept that there is inconsistently of approach. Observations made by Healthcare Improvement Scotland has shown that ethical and policy guidance has largely failed on its own to improve rates of disclosure. Research by the Professional Standards Authority outline the impact on health and social care professionals to exposure to stressful situations and heavy workloads, often linked with a requirement to process complicated information and focus on specific goals and targets. This 'stimulus overload‘ is cited as a potential contributor to unreliable implementation of best practice regarding a duty of candour. Normalisation of abnormal events becomes a way of coping with high risk situations.
Legislation can help to change culture although it rarely does so on its own. It will also need leadership, better staffing ratios and proper training and support for staff. All of these are likely to be in short supply with budgets stretched because of austerity. However, the Scottish Government's approach is inconsistent. When we made a similar case for new legislation to protect workers from violence at work, they produced similar arguments against legislation as those who are critical of this Bill. We are at least consistent in recognising the role of legislation!
While the evidence to support legislation in NHS Scotland is thin, it is somewhat stronger in the social care sector. The introduction of commercial contracts has put enormous pressure on staff and managers to cut corners in care. UNISON Scotland's 'It's Time to Care' report highlighted these pressures and they have if anything increased with the introduction of self-directed care. Staff reported that they were not encouraged to report safety or even carer abuse issues, because managers were concerned that they would lose the care package. A recent Employment Tribunal case involving a care manager showed that she was instructed to accept packages even when there were no staff to deliver them.
One reason to welcome the legislation is the emphasis on organisations and not individual practitioners. In remains to be seen how this will work in practice, but it should mean that organisations and their managers recognise their responsibility to provide the necessary support to staff. We have to improve organisational cultures rather than just create a monitoring tool. The remedial and publicity orders in the Bill are useful tools, although we should recognise the internal pressures within commercial organisations to suppress adverse reports.
On balance we believe that legislating for a duty of candour and the new offences could assist in achieving the stated aims. The Bill places important duties on organisations and managers, not just front line staff. However, care services have to be properly funded, otherwise there is a real risk that this Bill will simply result in staff being scapegoated for the system's failings.
Thursday, 10 September 2015
Support employment and productivity: spending of services that support employment outcomes particularly of parents and young people
Prioritise preventative spending: there is still to much focus on having ambulances at the bottom of a cliff and not enough of building a strong fence at the edge to stop people falling in the first place.
Integrate services: ensuring that health and social care are better integrated does offer the opportunity for substantial savings but this will only work if it is user centred and that needs local flexibility and control. Top down integration will not work.
Devolve powers and budgets
• Childcare: On top of the increase to 30 free hours of childcare for 38 weeks an additional 15 hours of holiday childcare for 10 weeks of the year targeted at 2-4 year olds whose families are in the poorest 40%
• Youth guarantee: the government should guarantee a 6 month long job to all under 25s the at minimum wage for those claiming JSA for longer than 9 month
• Troubled lives programme: a programme to join-up services for people who face multiple challenges building on th troubled families programme through a £100million fund to give bonuses to local authorities who achieve targets set for supporting excluded adults
• Invest in social house building: triple the budget of Homes and Communities Agency to to be used to build 50,000 social rented homes per year
• Transport investment: finance the One North package of integrated road and rail capacity
• Invest in energy efficiency: a further £31billion for energy efficiency measures in low income households.
Priorities for protected spending: 16-19 education, Local government social care and science
Under the current plans there will be an average cut of 39.8% in unprotected non-devolved government departments. Given the implications of cuts at this level the report proposes instead raising more money by:
• Reducing the planned surplus to £7billion from £10billion
• Aligning the higher rate of capital gains tax with the new planned higher rate of dividend tax: generating £500million
• Increasing tax on insurance premiums: increase to 13% (well below VAT) generating £1.5billion
• Pension’s reform: a cash cap on tax free pension lump sums and reducing the earnings threshold beyond which the pensions contribution annual allowance is tapered away: generating £3billion
While UNISON and others continue to campaign against the need for austerity we also need to find ways to mitigate the impact of the cuts on public services and the people who use them. This report offers an interesting starting point.