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.

Monday, 25 July 2016

Police Scotland, Reform Scotland and reforming Scotland’s policing

Mon 25 July 2016

We don’t often say nice things about Reform Scotland. They have a tendency to favour minimal public services, the play of the free market handing things to the private sector, all a bit grimly Thatcherite for our tastes. Upon hearing that they have published a new report, reaction in these parts is more likely to be “Oh dear” rather than “Oh really”.  So when we looked at their latest publication about Policing in Scotland – it was a pleasant surprise to see that it made a great deal of sense.

The report is a prĂ©cis of the evidence Reform Scotland are submitting to the Scottish Government’s consultation on Policing priorities for Scotland. They chime admirably with many of UNISON Scotland’s own observations and criticisms of Policing in Scotland over the last three years.

We have been highly critical of the way Police Scotland has been set up and run over the last numbers of years.  Centralisation, an arbitrary target for uniformed officers and a demand for cash savings have not delivered the police service that Scotland deserves.

Reform Scotland agree with us that the (thankfully now dropped) 1000 extra officer target has done policing no favours. They are also critical of the ‘one size fits all’ model of policing priorities that UNISON members have been reporting since the setting up of Police Scotland.  They attribute at least some of this to the removal of any local authority role in the governance of Police Scotland and the weakness of the Scottish Police Authority(SPA).     

These are concerns we have expressed repeatedly –  not least the weakness of the SPA. This quango  lacks the capacity to hold Police Scotland to account in any significant sense,  with local engagement a particular failing.

Reform Scotland’s proposal is for representatives from every council to sit on the board of SPA, and councils to be involved directly funding the police. Specifically they suggest monies to come from central and local government on a more or less 50/50 basis.  At this point the proposals are starting to reach the point that civil servants in Yes Minister would describe as ‘ambitious’.  Having 32 local authorities represented with whoever else needs  to be accommodated would make for a pretty big board. And local government funding is arguably under enough uncertainty at the moment. But nonetheless whether or not these ideas represent the ideal solution, their can be little argument that Police Scotland needs a more local approach and better funding.

The other thing this report shows is that criticism of the current set up is coming from all parts of the political spectrum, and on a similar range of issues.  Time for a change.

See also UNISON Scotland website Police page:
http://www.unison-scotland.org/service-groups-and-sectors/police/

and our latest briefing on Police Best Value:
http://www.unison-scotland.org/2016/07/06/briefing-079-bargaining-police-best-value-july-2016/


Thursday, 21 July 2016

Municipal Energy - Time for radical action

Despite the best efforts of successive governments to create an energy market, it remains notoriously uncompetitive. In Europe, municipal energy is commonplace and growing - we should do the same in Scotland.

 

The so called market is dominated by the big six utility companies, whose pricing practices have been criticised by the competition watchdog. Consumer trust in the market is low and they are reluctant to switch suppliers for a better deal given the hassle of switching. In fairness, the Big Six are often unfairly criticised and new entrants have been guilty of some pretty poor practices as well. The fault is in the system.

 

The IPPR, has made a convincing case for local authorities to set up municipally-owned energy companies that can supply electricity and gas at competitive prices and don’t have to distribute profits to private shareholders. By targeting those on low incomes, they can also help tackle fuel poverty. The local authority “brand” may also encourage otherwise reluctant low-income households to switch suppliers and save money. Nottingham and Bristol have followed this model and London, under a new Labour Mayor, looks likely to follow.

 

In Scotland a slightly different model is being adopted. Our Power is a community benefit society established and owned by a number of local authorities and housing associations. It too aims to tackle fuel poverty through the supply of affordable energy, focusing on social housing tenants, and seeks to buy a minimum of 30% of its energy from renewable sources. The Scottish Government is also at least considering setting up its own energy company, although details are limited.

 

The problem with these models is that they are simply playing the failed market and are relying on the same wholesalers. An alternative approach is for councils to establish genuine energy companies that generate renewable electricity and help households to install energy efficiency measures, funded from the long-term savings in their energy bills.

The APSE research paper, 'Municipal Energy: Ensuring councils plan, manage and deliver on local energy’, found that:
  • For every £1 invested in renewable energy schemes there is a further £2.90 in cashable benefits
  • 17 jobs can be created from every £1 million in energy saving measures on building
  • Energy efficiency and renewable energy can create 10 times more jobs per unit of electricity generated than fossil fuels
  • The local government sector annual energy bill of £750 million could be reduced by up to half by leveraging in spending power and using readily available and low cost technologies existing buildings.



Fife Council has done some of this with its £1.3 million turbine at the council’s recycling and resource recovery facility near Ladybank. This is expected to generate enough electricity to power 200 homes. They also generate clean energy from garden and food waste at the council's anaerobic digester and from landfill gas. Aberdeen has similar projects as well as the city's district heating scheme. A number of councils use solar photovoltaic panels.


 



Glasgow City Council is in the process of setting up an energy services company which will oversee the creation of renewables and low carbon projects in the city. It has mapped sites, but progress has been slow.

 

A more radical plan for the city has been proposed by Jim Metcalfe, based on research carried out by the Energy Saving Trust. This would involve the creation of a locally-owned company which would be able to reinvest profits from power generation on improving building insulation and reducing fuel poverty. The council should be leading on this, using council bonds, available at historically low levels, to finance the plan.

 

While electricity generation is important, we also need to make progress on heating homes. This is where district heating schemes come in. The Energy and Climate Change Select Committee heard in January that the £300 million government scheme to develop district heat projects needs a “regulatory investment framework” during this parliament to support future growth. District heating is a 50-80 year long investment and so you want to attract the lowest possible cost of capital to ensure the lowest cost for consumers. Councils are again in the best position to do this. In Scotland, work has begun on tapping into geo-thermal heat from disused mine workings.

Governments could help more by making energy efficiency a national infrastructure project. In Norway, the introduction of legislation to support district heating has shown a 150% increase in the installed capacity over the last 10 years. This has helped make it possible for the city of Drammen to create a district heating network that supplies several thousand homes and businesses with clean, affordable heat. This system didn’t rely on Scandinavian engineering, but the expertise of Glasgow-based Star Renewables.

 

There are a number of interesting municipal energy projects in Scotland and the rest of the U.K. However, they are patchy, small scale and not nearly radical enough. We need councils to take the lead, establishing full scale energy companies that can provide energy efficient homes with cheaper electricity and heat. They would also generate desperately needed revenues.


This would be municipal enterprise of the sort councils in the 19th Century created to revitalise our towns and cities. We now need 21st Century municipal leadership to take this forward.

Wednesday, 20 July 2016

Tackling poverty and inequality

The Institute for Fiscal Studies (IFS) has undertaken a detailed analysis of the distribution of household income in the UK. They look at the changes to average incomes, income inequality and poverty that occurred in the latest year of data (2014–15), and put these in historical context using comparable data spanning the last 50 years.

The one great success is that the growth in pensioner incomes means they are now the least likely major demographic group to be in income poverty. Another is that more people are in work than ever before. 

The “new poor” tend to live in households where there is someone in work. Only a third of children below the government’s absolute poverty line now live in a workless household – two thirds of those classified as poor are poor despite the fact that at least one of their parents is in work. This means that the policy focus needs to shift to raising wages and social security for those in work, particularly those with families.

This was reinforced in today's employment data that shows huge increases in self-employment, which account for much of the increase in employment. This trend is not attributable to greater entrepreneurship, but to more workers signing unstable contracts with fewer rights, less pay and little job security.


The key findings of the IFS report include:

- The incomes of poor households are increasingly sensitive to what happens in the labour market. Income from employment made up half of income for the poorest fifth of households in 2014–15 (excluding pensioners), up from less than a third 20 years ago. While this is good news it does mean that the poorest are now more vulnerable to any downturn in the labour market than they would have been in the past.

- Further falls in worklessness have much less scope to reduce child poverty than in the past. The falls in worklessness that we’ve already seen, plus the fact that rates of poverty rates among working families have risen, mean that only one third of children in income poverty now live in workless households.

- Median income overall has finally moved 2% above pre-crisis (2007–08) levels, but for adults aged 31 to 59 it is at its pre-crisis level and for those aged 22 to 30 it is still 7% lower. It is highly unusual to see no growth in working-age incomes over a seven-year period.

- Inequality in workers’ weekly earnings has fallen during the recovery. This was the result of a recovery in the number of hours worked by those with low hourly wages. Between 2011–12 and 2014–15, real weekly earnings grew by 4.4% at the 10th percentile, but fell by 1.2% at the 90th percentile.

- Strong employment growth and weak earnings growth have combined to hold down inequality in recent years. Since 2011–12, falls in household worklessness and increases in the number of second earners both mainly boosted the incomes of poorer households. Meanwhile weak pay growth has held back the incomes of higher income households.

- In key respects middle income families with children now more closely resemble poor families than in the past. Half are now renters rather than owner occupiers and, while poorer families have become less reliant on benefits as employment has risen, middle- income households with children now get 30% of their income from benefits and tax credits, up from 22% 20 years ago.

- Mothers’ earnings are increasingly important for households with children. For middle-income children the fraction of household income coming from women’s earnings rose from less than a fifth in 1994–95 to more than a quarter in 2014–15; and it doubled from 7% to 15% for the poorest fifth.

These findings should inform anti-poverty polices in Scotland, at an important time when more powers to tackle poverty are being devolved to the Scottish Parliament.

Today, the Scottish Government announced is to bring forward legislation to tackle the deep-rooted causes of child poverty. The new Child Poverty Bill will to set out a new approach to tackling poverty and inequality that the Government claims will provide a clear way forward for delivering their ambition to eradicate child poverty.

The Scottish Government has previously rejected the UK Government’s decision to abandon income-based child poverty targets, and is seeking to develop Scottish legislation after the UK Government repealed large parts of the existing UK-wide legislation.

A consultation setting out proposals for the Bill will be published over the summer, building on the existing work in the Child Poverty Strategy.

Friday, 8 July 2016

Scottish universities in good shape, but the future looks challenging

Audit Scotland has taken a look at Scotland's higher education sector. It finds that it is financially healthy but faces future challenges, and tough choices are likely if public funding is to deliver government policy ambitions.

Scotland has more world-class universities per head of population than any other country in the world except Luxembourg. There are 19 universities in four groupings:

- the ‘Ancient’ universities – Aberdeen, Edinburgh, Glasgow, St Andrews
- the ‘Chartered’ (1960s) universities – Dundee, Heriot-Watt, Stirling, Strathclyde
- the ‘Modern’ universities – Abertay, Edinburgh Napier, Glasgow Caledonian, Highlands and Islands, - Queen Margaret, Robert Gordon, West of Scotland
- the Small Specialist Institutions (the ‘SSIs’) and Other – Glasgow School of Art, Royal Conservatoire of Scotland, Scotland’s Rural College, the Open University in Scotland.

The report finds that Scottish universities play an important role economically and socially and have a strong international reputation. The Scottish Government budget includes £1.1 billion funding for universities in 2014/15, and £623 million funding for individual university students. Scottish Funding Council (SFC) funding to universities has reduced by six per cent in real terms since 2010/11 while funding for university student support increased by approximately 37 per cent in real terms over the same period. 

The sector supported 144,549 jobs and contributed an estimated £7.2 billion to the Scottish Economy in 2013/14. The report argues that the SFC needs to do more to ensure that its funding to universities makes the maximum contribution to achieving government policy ambitions. It should review its strategies for key areas, such as research and innovation, to ensure funding is used to best effect. Never the less, in the most recent UK-wide assessment of research quality, 77% of the research submitted by Scottish universities was judged to be either world-leading or internationally excellent.

The Scottish higher education sector is currently in good financial health with an income of £3.5 billion that generated a surplus of £146 million. However the report says this masks underlying risks within the sector. Surpluses and reserves are concentrated in a small number of universities and some are heavily reliant on Scottish Government funding at a time when it is reducing. 

Universities need to continue generating surpluses and reserves and making efficiency savings to fund capital costs and subsidise some of their activities. They are placing increasing reliance on generating income from fee-paying students from the rest of the UK, which may not be there post-Brexit, and outside the European Union (EU). For example, the SFC assesses the cost of providing teaching for Scottish and EU students and pays on average, £5,179 in 2014/15, and £6,999 when the tuition fee element is included. This appears to be well below the actual cost.

A good example of cost pressures is the estate - 22% of the overall higher education estate in Scotland is in poor or very poor condition. The report concludes that there are risks that universities with lower surpluses and reserves will not be able to continue to fund capital improvements at the level they require. In addition, from 2015/16, the actuarial deficit in the USS pension scheme (£8.2bn) will be placed on university balance sheets.

In 2014/15, there were 232,570 students studying at Scottish universities, 66 per cent of whom were Scottish. Overall student numbers have increased by 5% over the last ten years and the student population is becoming increasingly international. It has become more difficult in recent years for Scottish and EU students to gain a place at a Scottish university as applications have increased at a greater rate than increases in the number of places that the SFC funds for Scottish and EU students. The report also finds that the current funding approach to improving access to university for students from college and deprived backgrounds is under pressure. The Scottish Government's support for widening access needs to be backed up with cash.

The media headlines focused on the finding that it has become more difficult in recent years for Scottish and EU undergraduate students to gain a place at a Scottish university. However, the future funding challenges highlighted in the report are significant and will need to be addressed if the Scottish model is to survive.

Tuesday, 5 July 2016

Future Energy Scenarios

Keeping the lights on at a reasonable price and meeting decarbonisation targets is a complex  business and not without controversy. 

The Future Energy Scenarios (FES), launched today, is National Grid's view of plausible and credible pathways to 2050. This drives planning and investment decisions in the system. It's also probably the best look at where the energy industry is going in the foreseeable future.

FES uses four scenarios to model changes to the edgy system. They start with the optimistic 'Gone Green' which assumes high prosperity and high green ambition, with carbon targets met through investment and innovation. Then 'Slow Progression' which assumes a still ambitious, but a less prosperous economy, with compromises on carbon targets and less investment. Next is 'Consumer Power', still a prosperous economy but one driven by consumer desire for innovation, with high levels of distributed generation and storage. The worst scenario is 'No Progression' in which business as usual prevails with low growth and limited innovation.



Scenarios are not about predicting the future. Just as well, because the track record of energy scenarios since the 1970's is not great. They are about giving us some numbers under different economic and policy circumstances. More a planning tool than a crystal ball.

Given past forecasts, it is surprising that all the scenarios now assume a continued reduction in electricity demand until around 2025. Partly due to the slow climb out of recession, but also due to more efficient appliances and the collapse of heavy industry. However, demand starts to rise again under the more prosperous scenarios. Gas demand, after an initial fall, looks likely to maintain a significant part of the mix. The prosperous scenarios assume moving away from carbon intensive sources and/or more local generation.

There is a little more regional analysis this year, something National Grid is weak on. They map the regional sources of generation and identify some regional differences in demand.

The key message for me from this year's FES is that energy supply is becoming increasingly diverse. Fossil fuels will continue to decline with an extra 5GW closing by 2016. Potentially 18GW of additional storage could be available by 2040. The constraints appear to be more market and regulatory than technological, although this is still more about short term storage than addressing seasonal imbalances. They assume a big increase in imported electricity and gas, from 4GW at present to 23GW by 2040. 54% of gas could come from alternative sources by 2040, including shale, biomethane and bio-substitute natural gas.

More action is needed in the next decade if the UK is too achieve the 2050 carbon reduction target.  None of the scenarios indicate that the UK will meet the 2020 target of 15% of energy coming from renewable sources. Progress is reliant on key technologies, nuclear, renewables and CCS. It can be done without one of these, but becomes more challenging. In practice two of them are looking dodgy and renewables suffer from investor uncertainty. However, it is heating and transport that needs to do much more.

Gas is seen as vital to facilitate decarbonisation. It's flexibility can be used to balance the system and they assume there will be 11GW of CCS enabled gas plant by 2040. It will still be important in heating homes, with 70% of households still using gas in 2030. Hopefully district heating will play a bigger role, although heat pump take up so far is slower than anticipated. While shale gas has been delayed, they are still assuming it will play an important role, in particular under the consumer power scenario. The was some scepticism about this amongst today's audience, many of whom doubt the economic viability, never mind political and environmental factors.

With the greatest minds in the energy industry present at the conference, only a handful, on a show of hands, thought we would meet 2050 decarbonisation targets! That doesn't mean it isn't desirable, but it does reflect scepticism about government taking the necessary actions. It certainly looks challenging. National Grid are rightly also concerned about security of supply and keeping energy bills down, so balancing objectives is an additional complexity.

The external speaker, Professor Jim Watson, emphasised the importance of doing more on energy efficiency, something we should be aware of in Scotland as we will miss the statutory fuel poverty elimination target this year. He was also not convinced that shale gas will be economically viable or the case for gas bridging the gap on carbon reduction. Relying on CCS when the UK government has pulled the plug on funding seems pretty optimistic as well. He also made the important point that we need to look more carefully at the distributional impact of scenarios on different income groups. National Grid can be a bit fixated on technology rather than people.

Some wonder if there is a disconnect between the scenarios and the market mechanisms that will be needed to deliver them - my own view is that they never will. National Grid take the view that they will change to meet demand. Unsurprisingly, they are not keen on an independent system operator as recommended by the Commons Energy Committee. They don't think there is a significant conflict of interest, or if there is, they can manage them. They claim their scenarios are not driven by commercial interest of National Grid, but they do use them for their business planning.

The elephant in the room today was of course Brexit. How it will impact on the energy industry depends on your view of the economic and political impact of leaving the EU. If you think it will mean lower/higher growth and less/more green ambition, then this will impact on the energy scenarios. In particular, the big assumptions of additional electricity import capacity may depend on staying in the EU energy system. With the U.K. voice gone from the table, it remains to be seen what impact that will have on EU policy. Maybe less market oriented?

While some of the assumptions made in FES may be controversial, it remains the the most comprehensive study of future energy planning for the UK. There is lots of detail in the documents that can downloaded. Perhaps one to dip into, rather than a bedtime read!


Monday, 4 July 2016

Education reform - empowerment or centralisation

The Scottish Government has signalled education as its first priority, most notably by giving the Deputy First Minister, John Swinney the lead role. Possibly shades of Tony Blair's, education, education, education mantra here. The first indication of John Swinney's approach comes with the publication of his Education Delivery Plan and it looks  eerily  reminiscent of the New Labour approach to public service reform.

The  Education Delivery Plan aims to achieve excellence and equity in Scottish education by focussing action around three key priorities: closing the attainment gap, delivering the curriculum and empowering teachers, schools and communities.

The plan gives an explicit commitment to “a publicly owned and run, comprehensive education system in Scotland – a mutual system, not a market system – which supports every child to achieve". This is clearly meant to differentiate from the Tory, free school, privatised model, which is supposed to be driven by the market.

While the Tory approach pays lip service to inequality, the driver for this plan is bridging the attainment gap. A pupil from the 20% least deprived areas of Scotland is almost twice as likely as one from the 20% most deprived areas to leave school with a qualification at SCQF 6 or better (Higher equivalent or above). There will be few who disagree that this the correct driver, five years on from the Christie Commission identifying the 40% of public spending on failure demand and the importance of preventative spending. However, schools cannot bridge this gap alone. This can only be addressed by cross-cutting government action on income, taxation and strong public services.

The most important intervention has to be before a child gets to school, arguably before birth, but certainly in the early years. This plan therefore includes the government's welcome commitment to the doubling of early years and childcare hours. The concerns relate to funding and quality. It looks as if we will have to await the financial review of early learning and childcare in September 2016, for clarity on how the promised £500m is going to stretch to 20,000 staff and 600 centres. The frequent references to childminding is worrying, as this is not the quality early years provision required to make a difference in supporting children in the vital early years.

In schools, there will be a renewed focus on literacy and numeracy at P1-3; indisputably the correct focus. This will be backed up by targets, inspection, advisors and a range of national programmes. As well as an increase to £750m in the School Attainment Challenge fund that ministers dole out directly. It is here that we see shades of the Blairite approach developing - very reminiscent of the central delivery unit approach to reform. Top down targets and inspection, backed up by league tables in a reformed Parent Zone website, with ministerial handouts to pet projects.

More positively, there are elements of the plan that recognise that resources will have to be targeted on the schools in the most deprived areas. Proportionate universalism is the right approach, but it will require some bold political decisions if the targeting is to be significant enough.

There will be a range of measures to reduce bureaucracy for teaching staff by clarifying the requirements of Curriculum for Excellence. This will be welcomed by teaching staff, although the other centralised initiatives may place new burdens on schools. Sadly, there is no recognition of the role the wider education team play in schools – staff other than teachers are totally ignored. Teachers may be less keen on the introduction of national standardised testing in all schools by August 2017.

A Governance Review will be announced alongside the Programme for Government in September 2016. This review, starting in early 2017, will examine the system changes required to "empower schools, decentralise management and support through the encouragement of school clusters and creation of new educational regions". The plan is to extend to individual schools responsibilities that currently sit with local authorities. This will be done in a new Education Bill in the second year of this Parliament.

The structural changes will be the subject of further consultation, but the direction of travel is clear. It proposes centralising the education role of local authorities to new regions with more central government direction. How these new regions will be constituted will be important for issues like VAT exemptions and the employer role. Equally important, will be clarity on the freedoms schools will have over devolved budgets, including the deployment of staff. 

The new governance model is one of some devolution to the very local (individual schools), with an enhanced role for central government. Government will have a wide range of powers to direct how education is delivered, backed up with advisors, testing, direct funding and data transparency. In a country the size of Scotland it is perfectly reasonable to set national standards and frameworks. The risk with this plan is that almost all the real levers of power over schools will be in St Andrew's House. I count more than twenty new national initiatives, on top of those already in the National Improvement Framework.

New Labour may be dead, but it's approach to public service reform is very much alive in Scotland. The temptation on ministers to try and run services from the centre is always strong. However, the lessons from the 1980's are that central delivery doesn't work - so that temptation should be resisted.