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, 16 October 2017

Welcome energy decisions, but we must be bolder

There is no shortage of activity on energy policy and we haven’t even heard the outcome of the Scottish Government’s energy strategy consultation.

Let’s start with fracking. The Scottish Government has announced that the existing moratorium would continue ‘indefinitely’, which is an effective ban given their planning powers. This follows a similar ban on underground coal gasification. It will be the subject of a vote in the Scottish Parliament, but that should be a formality, as only the Tories support fracking. 

Claudia Beamish MSP still has her members bill which would put in place a stronger legislative ban. The problem with using planning powers is that the moratorium could be overturned very easily, unlike legislation. I suspect the government has decided to go down the moratorium route to avoid compensation claims from INEOS, who now have drilling licences that they can’t use. However, as the minister said, fracking, “cannot and will not take place in Scotland” - and that is the practical effect.

The overwhelming majority of people in Scotland will welcome this decision. A staggering 99% of the 60,000 respondents to the consultation supported a ban. Apart from INEOS, we had a grand rant from Jim Sillars, who claimed that people didn’t know about the consultation. Well, 60,000 respondents would indicate that claim is mince, not to mention the noise campaign groups having been making on the issue. Jim also expects trade unions to put pressure on the government to rethink the ban at the STUC. I wouldn’t hold your breath on that Jim, most unions are opposed to fracking. 


And you won’t win us over with nonsense claims about how fracking will end fuel poverty. Scotland’s geology means so little fracked gas could be extracted that its use would be for industrial, not domestic heating. Even if it could be extracted in any quantity, the cost would be prohibitive. That is why the investment is drying up for drilling in England and the companies are going to the UK Government with their begging bowl.

The next big announcement by the FM was the establishment of a state owned national energy company. Details on this are a bit scarce, but the announcement points, at least initially, to a retail operation. This is not exactly an original idea, with operations like Robin Hood Energy in Nottingham, Our Power Energy run by housing associations and the People’s Energy Company based in Musselburgh. 

A national energy company is something UNISON supported in its response to the energy strategy consultation. However, we envisaged a more radical option that involves generation and transmission as well as retail. We also support a big role for municipal energy - generating electricity, managing distribution grids, running energy efficiency schemes as well as retail sales. This is very common across Europe and seriously challenges the ownership model in Scotland, something the Scottish Government has been unwilling to do. The big energy companies’ reaction to the announcement last week, indicates that some modest retail competition doesn’t worry them very much. 

The UK Government’s stop-start efforts to introduce a price cap on energy bills, has once more run into trouble. The minister claimed the cap would be in place this winter, a suggestion that was promptly contradicted by Ofgem. The legislation could take a year and then many months more for Ofgem to implement it. Shambles doesn’t even begin to describe this. 

All the usual suspects have been dragged out to tell us how wonderful the market is - all we need to do is get into switching supplier. Meanwhile, in the real-world consumers are increasingly supporting real public ownership options as set out the Labour manifesto. The TUC joined that call at its recent Congress, unanimously backing a motion that supports returning the energy sector to public ownership and democratic control. The motion also called for a mass programme of energy conservation and efficiency, a just transition strategy and investigating the long-term risks to pension funds from investment in fossil fuels.

The last few weeks have seen some important energy policy decisions that could help reshape our energy strategy. However, that will only happen if we are bolder and resist tinkering around the edges.

Monday, 9 October 2017

Improving the governance of public bodies

Scotland's public services are administered by some 200 public bodies. Most of these are run by boards that make the key decisions on the majority of public spending in our country. This means we should pay close attention to the governance of public boards.

In 2010 Audit Scotland published a report on the role of boards that made a number of recommendations. Holyrood's Public Audit Committee has recently conducted an inquiry into the same issue and have published their findings in a letter to the Cabinet Secretary.

Some of the key points they make include:
  • Encouraging board members to provide an effective challenge to board chairs and chief executives, preventing ‘group think’ on our boards. As the recent SPA issue has highlighted, corporate responsibility should not be a means of silencing difficult’ voices;
  • The committee questions whether the involvement of a senior independent director on a board, as is the case in some parts of the private sector, could be a useful, additional check and balance on the performance of the board chair/ chief executive. Board's also need to establish a fully effective and transparent means of assessing the performance of all board members;
  • It is essential that the public appointments process attracts the best possible candidates, who should not be discouraged by the complex processThe current system may reward those who are most adept at repeating public sector jargon;
  • New legislation should give greater consideration to governance arrangements. Some of the problems have stemmed from poor initial decisions on governance arrangements;
  • There is considerable variance in the governance arrangements across boards and not always a clear rationale for such differences; 
  • Boards also take differing approaches to transparency such as holding meetings in public or private. The committee's view is that boards should be as transparent as possible and should meet in public unless there are justifiable reasons for meeting in private.



I contributed to an informal evidence session during the inquiry and the recommendations are very welcome. The membership of boards has become very 'samey', with the usual suspects dominating appointments. I have heard more than one board Chair use the phrase 'a safe pair of hands'. This isn't likely to to provide the sort of challenge the Committee is referring to. 

Workforce representation can provide a real challenge. The Fair Work Convention report recommended there should be a worker representative on every Scottish public body. Some have non-executive directors with a workforce interest. While these appointments offer an expertise that might otherwise be ignored, they are not a substitute for an employee director. However, such directors need to be supported and accountable, otherwise they can become isolated and less effective.

There is a tendency to use the shambles that is the SPA to highlight all that is wrong with public boards. The treatment of Moi Ali was both shocking and a 'good' example of the issues highlighted by the committee. However, we should remember that the structure of governance between Police Scotland and the SPA underpins many of the problems. There was a clear failure to recognise the governance problems this would cause when the legislation was going through parliament.

While the SPA is the most well known example, it isn't the only one. I can think of a number of NDPB boards that provide very weak governance. FE colleges are one as the severance packages row has illustrated. Food Standards Scotland is another, with the food industry having too great an influence. Most boards could do better on transparency.

In fairness it has to be said many of these governance failures are not unique to public boards. There has been a failure of governance in private and voluntary sector boards on pay and workforce issues. In addition, you can only appoint from applicants and many people of working age simply do not have the time to participate. On my way to giving evidence to the committee I bumped into an ex-steward who is now a senior manager in a private company that makes a big play of corporate governance. He told me that serving on public and voluntary sector boards used to be encouraged - now it is barely tolerated.


The Audit Committee recognises that some progress has been made in recent years, particularly over gender balance. Government now needs to focus on strengthening other aspects of governance. This report is a good starting point.

Monday, 2 October 2017

Funding, not more quangos will improve care integration

The implementation of health and care integration won’t be achieved on the cheap. While there should be long-term savings and better care from a shift to community services, it will take time to realise that ambition.

The Scottish Parliament’s Health and Sport Committee has been holding an inquiry into the budget for next year. We don’t have much idea how big the pot will be until the UK Autumn Budget and the Scottish Government decides on its own tax policies. However, that still allows some scope for an examination of the principles that underpin the budget.

The Integrated Joint Boards (IJB) are now responsible for some £8.3bn of expenditure – a substantial part of the Scottish budget and supplemented by local taxation. In evidence to the committee the IJB finance officers highlighted that resources are not keeping up with demands. They said:

There is emerging evidence which indicates that the current level of resources is less than that required to meet current cost and demand pressures. In practical terms this means that the required shift in the balance of care will take longer to achieve. A number of Integration Authorities have modelled the level of additional resources required to meet cost and demand pressures, with estimates between 3% (for 2018/19) and 14% (over two years) of existing budget.”


The clear message to the committee was that increased demand, largely due to demographic change, means that they don’t even receive a standstill budget. Transformational change comes with a much bigger price tag.

Measures to reduce unplanned admissions to hospitals and cut delayed discharges can be successful. A number of IJB performance reports demonstrate progress. Not least in Glasgow, which claims continuing decreases in delayed discharges with acute bed days lost falling from 38,152 (13/14) to 15,557 (16/17). However, the picture continues to vary across the country. As I said while giving oral evidence to the committee; unplanned admissions will continue until a full social care service is in place – hospitals don’t turn patients away.

I did notice a definite pitch from IJB directors and finance leads for direct funding and greater control. We should remember that IJBs don’t employ staff and get their budgets from health boards and councils. Their complaint is that funding ‘doesn’t lose its identity’ in this system and they have matrix performance monitoring. Concerns over double counting of health and care funding are valid, as are the constraints of ring-fencing.

It was entirely predictable when you create a system that co-ordinates services that sooner or later the leaders want to create an empire that they have more control over. This leads to a demand for stand-alone bodies – in effect a whole new set of local quangos. 

This demand should be resisted. The change that is required in care cannot be achieved by IJBs in isolation. One of the points I picked up from trade union colleagues in Norway was that separating the management of acute and community services made it that much more difficult to achieve resource transfers. The same applies to councils, who run range of other services that impact on health; like housing, planning, libraries and leisure services. You don’t join up services by fragmenting them even more.

From a staff perspective, such direct control would involve a massive transfer of health and care workers to new organisations. A move that will be resisted by all the trade unions for good reason. Such a transfer would take many years and the harmonisation negotiations would be a complete nightmare. It would require a massive funding pot and divert staff and management effort for years.


It is clear that transformational change in the health and care system requires a significant increase in funding. While there are still some organisational and cultural barriers to integration, more local quangos are not the solution.

Tuesday, 26 September 2017

Why John McDonnell's PFI pledge is welcome and affordable

John McDonnell caused a stir yesterday with his pledge to bring Private Finance Initiative (PFI) contracts back in house. Commentators who bandy about huge sums of money to pay for this commitment are missing the point.

The shadow chancellor said in his conference speech that Labour had already pledged not to sign any new PFI deals. He then added: “We will go further. I can tell you today, it’s what you’ve been calling for. We’ll bring existing PFI contracts back in-house.




Unsurprisingly, this was immediately welcomed by UNISON, who campaigned against PFI from the outset, whichever government (Tory, Labour and SNP) used the scheme. Dave Prentis tweeted, “At long last! Our party sees sense on PFI”.

Let’s start by understanding what a PFI scheme is. Instead of borrowing in the normal way, public bodies contract with a consortium of private companies known as a Special Purpose Vehicle, to design, build and operate a public asset - typically schools, hospitals, roads and waste treatment works. The Tories invented the idea, Labour developed it and the SNP use it in Scotland to this day – albeit renamed as NPD or Hubcos. Instead of meeting the borrowing and running costs directly, public bodies pay an annual fee to the contractors.

The scheme has been criticised on many grounds and in the early years the main driver was keeping capital projects off the public sector off the balance sheet. Particularly important in Scotland because of the block grant and led to the saying ‘it’s the only game in town’. 

The main problem with PFI is that the private sector can’t borrow as cheaply as the public sector, and of course take a profit. Government can now borrow very cheaply indeed and this had led to calls to refinance such projects. PFI schemes are notoriously secretive, but we know that they are paying interest rates of 7%+, at a time when public bodies could issue bonds at a little over 1%.


UNISON Scotland set out in our ‘Combating Austerity’ plan how this can be done and save millions of pounds of austerity cuts in the process. The Public Accounts Committee at Westminster, hardly a bastion of socialist economics, also highlighted how such refinancing had been achieved in England. Sadly, while some projects have been brought back in-house in Scotland, progress has been glacial, as our progress report this summer shows.

An important forerunner to any contract renegotiations should be stricter monitoring of contracts and restructuring the existing provisions. A number of public bodies in Scotland are beginning to take this seriously, but again more could be done. At UK level John McDonnell could help by committing to changing some of the Treasury rules that make refinancing more difficult than it might be.

That’s why the commitment from Scottish Labour leadership candidate Richard Leonard is so welcome. He said: “Scotland has a huge liability to PFI and the Scottish Government’s Non-Profit Distributing scheme. The Scottish Government could and should set up a debt disposal department dedicated to raising funds to buy out the total outstanding £28.8bn PFI and NPD debt on operational contracts. Doing this could save the public purse hundreds of millions of pounds. If I’m Labour leader I’ll be pressing them on this issue and as a Labour First Minister it will be a priority.”


McDonnell’s actual commitment is fairly modest and doesn’t commit Labour to a massive increase in public spending. That’s because the public sector is already paying over the top for these schemes, so bringing them in-house would actually be a saving to the public purse. As well as giving public bodies control over vital public assets.

Thursday, 14 September 2017

Health & safety and the ageing workforce

With twice as many people working past the State Pension Age, we need to give proper attention to the health and safety implications of the changing workforce.

I have highlighted before our research into the ageing public sector workforce in Scotland. With the 50-60 age group expanding the fastest, around 40% of the workforce is likely to retire within ten years. This is reflected in the wider workforce, with one in three workers over the age of 50 by 2020.


Yesterday, I was speaking at the RoSPA conference in Glasgow on this issue.

I argued that we need to recognise that despite equality legislation, older workers face at best unconscious bias in the workplace, and at worst overt discrimination. This shows itself in attitudes towards training, development and promotion opportunities. The UK will have 7.5m job vacancies to be filled by 2022, and that's before the impact of Brexit. With one million 50-64 year olds unemployed, but wanting to work, we simply cannot allow their skills to be wasted.

As I said in a recent column in The Scotsman, we need to talk less about the demographic time bomb and more about the demographic dividend. We need to find ways of keeping older experienced staff and helping them to pass on their knowledge and skills.

That's not to say that we should ignore the health implications. Older workers are at risk of burnout, due to the physical and emotional demands of their jobs over a long period. We need to look at later life career changes, flexible working and develop a funded sabbatical policy.

Older workers have a lower incidence of short-term absence, but a higher risk of long-term illness. This needs to be reflected in sickness absence policies that have become increasing rigid in recent years. For example, workplace dementia will be a new condition for many employers to address. Some 3,200 workers under 65 have been diagnosed and this means that employers need a strategy that includes diagnosis, support and adaption. The Alzheimer's Society has a useful guide on this issue.

While there is no evidence that older workers are at greater risk in the workplace, there are some age related factors. Older workers are at marginally higher risk from slips and falls; physical strength and stamina declines with age; as does sight and hearing. However, I could produce a different list of risks with younger workers.

We therefore need to respond to the challenges and opportunities of an ageing workforce as we would for any other safety risk. By risk assessment and if necessary by redesigning jobs to reflect age factors. All the time remembering that older people are not a homogenous group, to be lumped together in a one size fits all response.

Overall, we need to change workplace culture to regard older workers as a positive gain to the workforce. This starts by raising awareness and developing a strategy. Such strategies need to recognise the health and safety implications - always remembering that work needs treatment too, not just the worker.

Friday, 25 August 2017

Barclay review - mostly sensible reforms to business rates

The long awaited Barclay review of business rates hasn't exactly set the heather alight, but its recommendations are, in the main, pretty sensible.

The reviews main recommendations are set out in this helpful infographic.


The remit for the review was that the recommendations had to be revenue neutral. This means there are gainers and losers from the changes in both the structure and the reliefs.

The business lobby has long argued that business rates are too high in Scotland. However, they conveniently ignore the wider picture of business taxation. As this chart shows, businesses generally pay less taxation than their OECD counterparts.


The report recommends a number of administrative improvements such as three yearly revaluations. This is something UNISON has long argued for and the same should apply to the council tax on domestic properties. Better information, transparency and speeding up appeals and repayments are all reasonable. Plugging the many tax loopholes and a general anti-avoidance rule is a long overdue reform.

Big companies have obviously lobbied for consistency, but while the report supports standardisation, it doesn't recommend centralisation through another quango. This should remain a local system, reflecting local knowledge and that fact that most businesses in Scotland are local. The disappointment is that the review should have gone one stage further and returned the decision making on the level of business rates to councils.

The review also questions the effectiveness of the Small Business Bonus Scheme. The government has thrown huge sums of money at this scheme that could have gone into councils. A review in Northern Ireland has found that this relief could be better directed. Reform would also pay for the generous recommended changes in business support costing £45m.

There are winners and losers of reliefs. Town centres and day nurseries get new relief from business rates. It is perfectly reasonable to use tax reliefs to encourage particular policies and early years provision is a key element of tackling inequality. However, such support should come with at least some strings. The Scottish Living Wage would be a good start for the notoriously poor employment practices in many day nurseries.

The losers come in recommendations to restrict charitable relief. Private schools have come out with a predictable defence of their status. However, it’s not the purpose of charitable status to perpetuate the inequalities in our society that private schools sustain.

 

The other is sport and leisure facilities including council leisure trusts. Despite the claimed benefits of these organisations, the primary driver was tax dodging. If this loophole is plugged, as we warned it might, then councils should be taking these services back under direct control. However, this was one of the ways that councils coped with cuts to their budgets, therefore there would need to be compensatory budget uplift from the Scottish Government.

Supporters of Land Value Tax won't be pleased with the review, even if the door is partly ajar. They came to “An over-arching conclusion that we reached is that some form of property tax is still an appropriate way to fund the local services provided by councils”. While there may be a role for Land Value Tax as part of a basket of taxation, this is the right call.

Finally, the impact of the council tax freeze is highlighted in the revenue data. This chart shows how the council tax and business rates used to raise similar levels of revenue. Hopefully, ending the freeze will start to redress this imbalance once again.


While I might have wished for something a bit more radical, the review overall recommends some pretty sensible reforms. Not without some political challenges for the finance minister!


Getting it Right for Every Child

Before the recess the Education Committee at the Scottish parliament published a report into how well additional support for learning is working in practice. The report supports the feedback UNISON had been getting from our members in schools. Scotland is not getting it right for children with additional support needs.

We have some great strategies and policy commitments to supporting children with additional needs but these have not been matched with adequate funding to enable their implementation. Schools do not have enough money for recruitment, training and support for the staff needed to meet those needs.

There is also still widespread misunderstanding about who is actually working with these children and young people on a day-to-day basis. Again and again in policy papers and inquiries the focus in on teachers, teacher training and improving their skills and knowledge. These are not the workers supporting children. It is is support workers, pupil support assistants and classroom assistants. There needs to be training and professional development for all the staff working with those children.

When the education committee held an evidence session at the parliament it was interesting to see that politicians, and policy people talked about teachers all the time but the parents talked about classroom assistants and support workers. They know who is working with their children.

No policy will work without appropriate funding. This means the day-to-day delivery of that service and for adaptions, special equipment and extra space in mainstream schools and nurseries and as the new proposals for strategic delivery acknowledge very specialist provision out with the mainstream for some.

Parents often have to fight to get the additional support their child needs. When parents (who are able to fight) “win” that fight is no additional funding attached to implement the decisions. This therefore has an impact of provision of services for other children relying on that budget. The Scottish government needs to develop a much more detail on the demand for both the strategic services proposed in the strategy and those services that will remain in local authority control. There then needs to be funding to meet those costs. It is also clear that there is a risk that those from better-off backgrounds have higher chances of winning those battles and so further increasing the attainment gap.

UNISON conducted a survey of school staff earlier in the year and while the survey was about the impact of cuts on schools, members working with children with ASN consistently responded saying that they were not getting adequate training and support to deal with the complex needs of the children they were supposed to be supporting.

Scottish government is now consulting on improved guidance for schools on “supporting children’s learning” and the "healthcare needs of children in our schools". Good guidance on these issues is very welcome but delivery of the services depends on adequate funding otherwise it will just be another set of folders on an office shelf.

Tuesday, 22 August 2017

Household debt, pay and the magic money tree

Low wages and rising household debt is not a sound basis for any economy. Today's news that spending on credit and debit cards is rising five times faster than wages, should set off the economic alarm bells.


At every recent UK budget, I tweet and blog the one chart in the OBR report that I find particularly scary – household debt. This is what I said in March this year:




This chart is scary because every year it shows that household debt is projected to rise. With wages in real decline the UK government expects households to pick up the slack caused by their austerity economics.


These chickens are now coming home to roost.  Real incomes have fallen for three successive quarters, the first time this has occurred since the International Monetary Fund bailed the UK out in 1976. Despite saving less and borrowing more, consumer spending has fallen, resulting in economic growth of 0.2% – the lowest of any of the major G7 industrial nations.


Here is a Guardian graphic illustrating the point using ONS data.






As Frances O’Grady, the TUC general secretary, puts it: “People raiding their piggy banks is bad news for working people and the economy. But with wages falling as living costs rise, many families are having to run down their savings or rely on credit cards and loans to get through the month.”



Low pay isn’t doing productivity any favours either. This chart from the Independent shows that productivity has now fallen below 2007 levels. 



There is more evidence in a recent TUC report on insecure work, which found that those sectors which had seen higher increases in productivity over the last five years tended to be those which had experienced smaller increases in insecure employment.






What governments at UK and devolved levels need is a plan to get wages rising again. They must stop holding down the pay of public sector workers by scrapping the pay cap. The minimum wage needs to rise faster reaching £10 an hour as soon as possible and stronger employment rights to tackle bogus self-employment and other forms of insecure work.


For this to happen we apparently need a 'magic money tree'. Here are a couple of branches for that tree.


Let’s have a look at those who have been doing really well out of austerity – the richest 1%. As a report by the Resolution Foundation shows, they have recouped all their losses from the slump. Some action on tax dodging would be a start as well as halting the tax cuts that simply are not trickling down.




Another is the Robin Hood Tax.  Professor Avinash Persaud has recently fleshed out a few aspects of this long standing campaign. He argues that Britain already has a financial transaction tax – it’s called stamp duty, It raises just over £3bn a year, half of it from overseas citizens. Some trading activities are exempt from stamp duty and he believes these exemptions should be restricted. He also proposes that the tax should be broadened to cover transactions in corporate bonds and cash flows arising from equity and derivative transactions. He estimates that this would raise £4.7bn a year - a pretty hefty branch for any magic money tree.


A low wage, low productivity economy is just not the way to go. We need to get wages rising, not least in the public sector after seven years of pay restraint. A different type of economy is possible and we have the wealth to support it.

Wednesday, 16 August 2017

No 'certainty' for EU workers in Brexit plan

The claimed ‘certainty’ in the UK government’s ‘cut and paste’ job on EU law clearly doesn’t apply to EU nationals working in Scotland and the rest of the UK. 
Last month the UK government published the European Union (Withdrawal) Bill. It was going to be called the Great Repeal Bill, until people started calling it Gerbill for short. Insufficient gravitas I suspect! 
The Bill will repeal the European Communities Act 1972, which means EU law will no longer apply in the UK and European Court of Justice (ECJ) judgments won’t be binding on UK courts. However, it also aims to ‘cut and paste’ EU sourced laws by incorporating them in UK law once we exit the EU. We are told this will provide certainty, with the exact same rights as the day before we finally leave.

It is questionable if it does that on workers’ rights generally, particularly in areas like health and safety. However, for the many thousands of workers who are EU nationals, the UK government’s approach is very different.

These are set out in a separate UK government proposal as part of the Article 50 negotiations. These proposals would take away rights citizens currently have, create new red tape and uncertainty for millions of people. So much for the promises made by the Leave campaign that EU citizens would be treated no less favourably after Brexit. Bit like the missing £350m for the NHS!

In contrast, the EU Commission has set out a more sensible plan, which includes: 
  • the right to acquire permanent residence after living in a country continuously for five years, no matter how many years prior to the withdrawal date the person had been living in that country. 
  • the right of “current and future family members” to join the person that has exercised their right to free movement, at any point after the date of withdrawal. 
  • the protection of recognised professional qualifications which were either obtained or recognised in any member state prior to withdrawal. 
The UK also wants a retrospective cut-off date of March 2017 for its new ‘settled status’. It is hard to see how a cut-off date other than the date of withdrawal from the EU could work and it would impact on the ability to achieve ‘settled status’ under the UK proposals. A retrospective cut-off date will also discourage health care workers from coming to Scotland now, something that is already obvious from the nurse registration data.  

There needs to be a disputes mechanism and the EU is proposing the ECJ while the UK wants it to be limited to domestic courts. I don’t think either of these would work, but it should be possible to reach a compromise position on a suitable disputes mechanism.

Getting a quick agreement on this matters not only for the workers concerned, but for the many industries in Scotland that rely on EU nationals. Universities have recently expressed their concerns over the UK plan for staff and students. A study by Deloitte’s indicated that half of skilled EU workers were considering leaving after Brexit. Nurse registrations from the EU have already almost dried up, adding to the acute staffing shortages in the health and care sector.

Nowhere in the UK is the economic and social case for immigration stronger than in Scotland. Welcome recent increases in population are almost entirely driven by migration (see chart below). 



Our working age population is not projected to increase at the same rate as the rest of the UK. The biggest increase in demand for new jobs is in health and care with 65,000 extra jobs needed by 2020. The numbers of working age Scots to support our ageing population is not going to be available without immigration. 

Public opinion polls in Scotland and the UK shows strong support for letting EU migrants stay and that includes three quarters of leave voters. By wanting to change the current status of EU nationals, the UK government position is inconsistent with its stated approach to other EU law in the Repeal Bill. 


The key principle should be the protection of existing rights for EU nationals in the UK and reciprocal rights for UK citizens living in the EU. That’s the right approach for workers and the essential services they deliver.

Friday, 21 July 2017

Action on energy prices is another damp squib

As widely predicted, UK government action on energy bills has turned out to be another damp squib. Ministers passed the buck yet again to Ofgem who have published plans for a ‘fairer and more competitive’ market. As if we haven’t heard that before! 

As the Editor of Utility Week put it“If the government is convinced that an absolute energy price cap for 17 million UK households is both expedient and desirable, it should take responsibility for delivering it – and sooner rather than later. The industry is not going to tie a noose around its own neck.”

Despite the abundance of energy supply in the UK, we still pay more than the European average. This Ofgem infographic shows how energy bills are broken down.


We are told the solution is more switching in an allegedly competitive market. However, there has been a warning that more small energy firms could go bust this winter because of increasing price volatility. David Bird of Co-operative Energy said that the regulator needed to set financial stress tests for new market entrants, to reduce the risk of firms folding and customers being left in the lurch.

On a more positive note it looks as if there may be some action on charges for pre-payment meters. 

Santander has recently highlighted how much of our declining pay packets go on largely unavoidable household bills. It looked at bills for gas, electricity, water, etc – and found they have risen far ahead of average wage rises. Since 2006, average pay packets in Britain have gone up by 19%, while the average gas bill has risen by 73% and electricity by 72%.

These are very large real rises, and all the grimmer for families and pensioners on very tight budgets – not to mention public sector workers suffering years of pay restraint. These are must pay bills that leave families with harsh choices about what to cut elsewhere.

This bitter pill is made all the less easy to swallow when the boss of one of Scotland’s biggest energy companies has been given a 72% pay rise, soon after arguing against consumers having their bills capped to save them £100 a year. The company also increased the price of its standard variable tariff by 6.9%.

Alistair Phillips-Davies, the chief executive of SSE will be paid £2.92m in 2017 after receiving the maximum possible bonuses for leading a “robust performance” by the supplier last year. The pay rise is even bigger than the 40% rise awarded to the chief executive of the Scottish Gas owner, Centrica.

Former energy minister Brian Wilson is not as convinced as the First Minister that ScottishPower is “an exemplar to our world-leading energy sector” as she opened their new HQ in Glasgow. He argues: “Such testimonials should be tested rather than asserted. Neither ScottishPower nor SSE have built a single power station since privatisation. Scotland has been turned from exporter of electricity to importer. These companies have been the biggest beneficiaries of onshore wind subsidies – without building a single turbine in Scotland. I’m not sure that is such an “exemplar” record, even leaving aside what customers think of them.”

Then we can add energy networks into the mix. They have been accused of exploiting consumers to enjoy a £7.5bn windfall of unjustified “sky high” profits.  Citizen’s Advice reckon the companies that transmit electricity and gas around the UK, including National Grid, were reaping average profit margins of 19% from their monopolies. That compares with the 4% margin that big six suppliers make selling power and gas to householders. They have called for a one-off £285 rebate to every household. Don’t hold your breath on this one, but the companies can expect a tougher price controls next time around.

In a useful analysis of the issues the HofC library argues that the key issue for Parliament will be how to make consumer markets such as energy work effectively. Can consumers be encouraged to find the best deal or does Government need to be more active? 


The simple truth is that markets have failed, not least because consumers have better things to do than spend hours battling the complexity of energy pricing. Government intervention is long overdue.

Wednesday, 19 July 2017

Taylor Report consolidates a race to the bottom in employment rights

The Taylor report into ‘Employment Practices in the Modern Economy’ does little to help workers being exploited in the workplace. 

The appointment of Matthew Taylor was always likely to be a safe choice for the Prime Minister in conducting this review. The report is very New Labour - progressive in ambition, but nothing too radical in practice. A classic bit of 'nudge' capitalism. 

The problem with this approach is that while good employers may respond to the nudge, the specific problems he was asked to consider are exploited by the cowboys. They need a regulatory kick up the backside, rather than a nudge.

This nudge approach is reflected in the key recommendations:
  • Dropping ‘worker’ status for that of ‘dependent contractor’, in an attempt to distinguish more clearly between those who are genuinely self-employed and those who are not. These may attract additional protections.
  • Platform based services e.g. Deliveroo, Uber, must be able to show that that they are paying their average worker 1.2 times the national minimum wage.
  • Responsible corporate governance, better management and stronger employment relations is apparently better than regulation.
  • No recommendation that tribunal fees should be scrapped, although some tinkering with the system including naming and shaming employers who don’t pay awards. More helpful is a free preliminary hearing on employment status and reversal of the burden of proof.
  • Zero-hours and agency workers should have a right to request fixed hours or a direct contract of employment after twelve months.
  • Reintroduces ‘rolled up’ holidays acting as a disincentive to take holidays. Time off becomes a luxury for those who can afford it.
If you are suffering from exploitative employment practices you might well feel pretty underwhelmed by these recommendations. This isn't just limited to the gig economy, it also applies to many in the private/voluntary home care sector. For the Prime Minister, post-Grenfell, to use phrases like  ‘overbearing red tape’ shows she has learned nothing about the importance of effective regulation.

On the specifics, we don’t need a new category of employment status. The courts have already been able to determine bogus self-employment when they see it. What we need is effective enforcement of legal rights. As Labour’s Rebecca Long-Bailey MP put it “If it looks like a job and smells like a job the chances are that it is a job”.

On platform working, Taylor appears more concerned about cash wages for low paid workers eking out their wages at the weekend, than multi-national companies engaged in large scale tax dodging. Perhaps unsurprising when his panel included investors in these companies!

By introducing a complex averaging reporting system for wages, he is effectively saying that companies shouldn’t have to pay the national minimum wage for every hour worked. No prizes for guessing who is going to get the lower paid shifts.

The recommendations are built on the premise that the UK’s flexible labour market has been a great success. One of the most disappointing aspects of the Taylor report is the lack of evidence to support his assumptions. From the Chief Executive of the RSA I would have expected better.

One of those assumptions is the failure to recognise that business investment per capita has almost ground to a halt. The flexible labour market encourages the substitution of cheap labour for capital, hence the dismal levels of productivity. This chart by the TUC’s Geoff Tily from OECD data, shows just how far the UK fell between 2007 and 2015. 


After some modest recovery the OECD are now forecasting a return to the bottom of the league. Taylor is, in effect, supporting this approach. The other consequence is increasing household debt.


All our experience shows that employers, particularly those in the gig economy, will not be ‘nudged’ into best practice because the Government asks them to, or it’s the right thing to do. It is only legislation, with effective enforcement and strong collective bargaining, which will make any difference.

The Taylor Report is a huge missed opportunity. It demonstrates a failure to understand the lives of workers on the fringes of decent employment. It consolidates a race to the bottom in employment practice.

Friday, 7 July 2017

Regulation is not 'Red Tape'


If the Grenfell tragedy teaches us anything, it must be that regulation is not 'Red Tape', it is an essential safeguard for a civilised society. Scotland has escaped some of the worst examples of deregulation, but we shouldn't be too quick to pat ourselves on the back.

The circumstances of the Grenfell Tower fire will be subject to a judge-led inquiry and it is clear that regulations and enforcement will be one of the issues to be considered. In Scotland, a change to building regulations in 2005 made it mandatory for builders to ensure that any external cladding "inhibited" fire spreading. The new regulations were introduced following a fatal fire in an Irvine tower block in 1999. The Building (Scotland) Regulations 2004 contains the mandatory regulation: "Every building must be designed and constructed in such a way that in the event of an outbreak of fire within the building, or from an external source, the spread of fire on the external walls of the building is inhibited."

This is the primary reason why no social housing tower blocks in Scotland have been found to have the type of cladding used at Grenfell. However, effective regulation is only part of the story, we also have to ensure we enforce those regulations. On this, Scotland is not doing so well.

A recent UNISON Scotland survey reveals that building control staff are short-staffed, overworked, stressed and long overdue a pay rise. Key findings from the survey show:

- Almost half (48%) said there have been budget cuts this year while one in five (20%) said the cuts had been severe.
- There are 56 less staff working in the Building Standards departments now than in 2010.
- The overwhelming majority (89%) feel their workload has got heavier in the last few years.
- Almost half (47%) felt they should spend a lot more time on site visits while just 13% felt they had the right balance between site visits and office time.
- 48% described morale as low, with over three quarters (78%) saying they don’t expect it to improve as a result of budget cuts, increased workload and lack of a pay rise.

The report reveals a dedicated workforce committed to ensuring that buildings meet the standards required, but who are under enormous pressure. They feel exhausted, undervalued and are struggling to deal with the demands placed upon them. Previous UNISON surveys of other regulatory staff, covering, food, consumer rights, planning and the environment, highlight similar concerns.

The former UK coalition and Conservative governments promised a “bonfire of red tape” with a “one-in-two-out” rule governing new regulation. In Scotland, there is a more measured approach in the Regulatory Reform (Scotland) Act, but much of the language around this legislation was similar.  Too much emphasis on supporting business and not enough on compliance. 

On food, Scotland has abandoned the visual inspection of some animals in abattoirs and Food Standards Scotland want to go further in abandoning independent meat inspection. Environmental health officers have had to scale down their inspections of food premises due to staffing cuts. Deregulation of planning has long-term consequences in both built and natural environment, even if the consequences of poor decisions or regulation can take years to emerge.


A big focus for Tory deregulation was health and safety. 137 people were killed at work last year, but this figure is dwarfed by the numbers of people dying of work-related illnesses, including at least 5,000 a year who lose their lives to asbestos-related cancers. The Hazards Campaign estimate that around 50,000 people die each year due to past poor working conditions of heart and lung diseases and work cancers,” They argue that the government’s obsession with cutting “red tape” really meant abolition of regulations which protect workers. 

Sensible regulation is something we all take for granted. We assume that someone is checking that the food we eat and the goods we buy are safe. Increasingly, that is simply not the case and sadly it will be a tragedy like Grenfell that causes governments to rethink the merits of light touch regulation. It is local government in Scotland that has borne the brunt of austerity cuts and the salami slicing of regulatory departments is not well understood.

An effective state that protects its citizens needs people in order to actually function. If there aren’t people in central government to proactively revise and update regulations and in local government to effectively enforce them, that is a state failure.

In 2015 the New Economics Foundation (NEF) concluded its major investigation into deregulation that had been unfolding behind the scenes in Whitehall for years. They called the final report ‘Threat to Democracy’ – because that is exactly what it is. NEF makes the point that regulations protect us from bad businesses (as well as, in principle at least, bad finance).  It is absolutely our democratic right to demand the ability to make those rules, and see them properly enforced.

It remains to be seen whether a chastened Government will, post-Grenfell, retain its deregulatory zeal. Last year NEF also warned that Brexit would only increase this deregulation drive. The Great Repeal Bill threatens to give ministers the power to strike swathes of social and environmental protection from the post-EU statute book.

Grenfell might at least result in a pause on further deregulation, but what we really need is for the mindset around regulation to change. In future, we need a greater appreciation of the role of those who uphold regulatory standards and ensure that both central and local governments have the resources to keep all of us safe.