This is UNISON Scotland's latest report on the impact austerity economics is having on our public services and the staff who deliver them.
This info graphic outlines some the problems
Dave Watson has put the report in the context of Challenge Poverty Week in this article on the leading Blog, Left Foot Forward.
Today is Blog Action Day and the subject for this year is inequality. Very appropriate here in Scotland as this is Challenge Poverty Week and I make no apology for returning to this issue.
Yesterday, the STUC 'Decent Work, Dignified Lives' conference had a real focus on inequality with some excellent contributions that will be available on line.
Professor David Bell and David Eiser from Stirling University gave a very clear analysis of inequality in Scotland. They argued that the trickle down economics of the Thatcher era have been successfully challenged in books like 'The Spirit Level' and the more recent work by the French economist Thomas Picketty.
There is growing wider acceptance of the damage inequality does from contributors as diverse as the ILO, The Pope, Mark Carney and the World Bank. Even the IMF now accept that redistribution doesn't have a negative impact on growth.
The determinants of inequality are even better understood. Technological change and globalisation have changed trade, corporate power and deregulated labour markets. Taxation and benefits can have intended consequences towards redistribution, but regulation can have negative unintended consequences. For example, the price of utilities has been driven up by privatisation and regulation and that has a bigger impact on the poor because essentials constitute a larger part of their income.
The consequences are that as inequality rises the level of social mobility declines. In particular, there is less mobility between generations because wealth and other advantages are simply passed on to children.
Income inequality in Scotland is similar to the rest of the UK when you take London out of the equation. While still high in the league table of inequality compared to other EU countries, our level of tax redistribution is about average. It's income before tax that pushes the UK up the league.
So what should the policy responses be?
The obvious startIng point is tax and benefits. The problem is that relatively small changes have a limited impact on equality. As highlighted above, it's income before tax that is a feature of inequality in the UK. The main impact of the benefit system is to subsidise poor employers, while tax cuts for the rich has just encouraged fat cat bosses to lobby for higher wages.
The next area is labour regulation. The minimum wage does reduce inequality, primarily by improving wages at the very bottom, although it has not maintained differentials throughout the pay scales. Action on insecure employment would help, particularly access to employment justice and ending zero hours contracts. However, it is only through support for sectoral collective bargaining that we will make big strides forward in tackling inequality. Maximum wage or ratios are are also important as this week's IDS study shows - directors pay has grown from 40 times average earnings to 120 times since 2000.
The third solution gets less attention - public services 'In kind' spending. As the OECD has highlighted, income inequality in the UK is mitigated by public spending. Preventative spending on health and education, particularly for the under three's, could have a major impact - tackling intergenerational Inequality. Government action can, albeit unintentionally, also exacerbate inequality. A good example of this is government driving down the cost of social care through lower wages and insecure working conditions for care workers. Public sector buying power should instead be used to positively address inequality.
We cannot say often enough that a more equal society benefits everyone. A radical change of direction is required using a range of policy interventions. Progressive taxation, labour regulation and stronger public services would be a good start.
This is Challenge Poverty Week in Scotland. There will be a series of events culminating in a march and rally In Glasgow on Saturday.
The week started with the Poverty Alliance conference today. I was contributing to the final session and my focus was on the importance of reframing the narrative in the debate around poverty.
For Cameron, it is all about the ‘strivers, not the skivers’. This is the strategy and language of despots and the far right for centuries. Find a minority to blame to distract the majority from the real problems in our society. A problem you could do something about, but choose instead to defend the vested interests of your class.
We need to reframe the narrative in opposition to welfare cuts and the political myth making that unfairly blames poverty on those struggling. The percentage of households below a minimum standard of living has doubled over the last 30 years.
We can start by pointing out that more than half of those forced to claim benefits are the very ‘strivers’ that Cameron claims to represent. 52% of working age adults in poverty were living in households where at least one adult was in employment, as were 59% of children in poverty.
This has happened because the economy has seen a big shift from wages to profits. You have to go back to the 1860’s for a pay squeeze as long as this one. If the wage bill had just kept up with inflation there would be £5bn more spending power in the Scottish economy.
As we highlight in a UNISON Scotland report published today on wages, workers are struggling to meet even basic bills. Since 2007 the average rent for a Council House has increased by 26% and in the same time the wages of a Council Worker has increased by 8.3%. In today’s report we give a voice to many of our members who describe in their own words how they are struggling to make ends meet.
Families have been plugging the gap by using savings or getting into debt. 30% of families say they have less than £500 put away, compared with just 14% in 2013. A deeply indebted economy may be a political strategy to get Cameron to the next General Election, but there will be a serious hangover after it.
Even among those suffering, the pain is not evenly spread. Women in low pay have a pay gap of 34.2% and young workers classed as low paid has more than tripled over the past four decades.
Of course there is a minority that Cameron is not blaming – the 1% who are doing very nicely thank you.
The wealth of the richest 1,000 people in Britain doubled to £519 billion since 2009, about two and a half times the annual deficit. Today’s IDS study of FTSE 100 Directors shows that they had a 21% pay rise last year and now earn 120 times the average full time worker. In 2000 that ratio was 40 times. NHS workers in England are striking today, just get the Government to pay their own measly 1% pay policy.
And this isn’t just about Russian oligarchs buying up mansions in Knightsbridge. It’s here in Scotland. An Edinburgh fund manager reported recently that 7 directors earned an average of £2.5m each and settled a post retirement benefit on a former director of £31m.
There are some positive signs that we are not the only people who recognise the need to reframe the debate. The Pope, Governor of the Bank of England, even the CBI have said something about low wages and the damage it is doing to our economy. We may not get the bankers to even read The Spirit Level, but even they can see that they can't hide behind electric fences all the time. They can pay to get their bins uplifted, but their neighbours rats will still get under the fence.
So, lets build on that growing awareness to build a broad coalition around a new narrative and some practical solutions. By all means let's engage with the Smith Commission to strengthen devolution, but then focus on what we can achieve at UK, Scottish and local levels. At today's conference there was a really useful discussion about how we can harness the energy of the referendum debate to deliver social justice.
My frustration with the current political debate is that we need a little less rhetoric, telling people what they want to hear, and more action. For example, everyone agrees that the living wage can be expanded through procurement, but months after the Act was passed we haven't even begun to draft the statutory guidance. Meanwhile officials come up with every excuse for not taking action.
The best engagement events during the referendum campaign were not the 'shouty' hustings, but rather the genuine conversations. Educate and agitate is an old trade union adage, but if you explain the issues to people, they are much more willing to consider and come up with different and challenging solutions.
A different narrative in the debate around poverty is possible. We can win the arguments, persuade a majority that a more equal society is better for everyone, not just the poor. I am less interested in the 45 or the 55, than getting the 99%, who would benefit on our side. If we can do that we have a movement that really can create a just Scotland.
A quick look at the draft Scottish budget indicates few surprises. Yet again public sector workers take the biggest hit through their pay packets, followed by councils and police staffs.
While the headlines in the budget are around the fiscally neutral new taxes, it is the budget allocations that matter more to UNISON members. We should also remember that these are Scottish Government allocations. Public bodies will have other spending commitments to meet when they come to set their individual budgets.
Over five years the Scottish budget has been cut by around 10% in real terms with the Capital budget facing a real terms cut of 26% as a result of the UK Government’s austerity programme. For the coming year this means a 1.7% real terms cut in the budget.
The main method of meeting this budget reduction in Scotland is by a further cut in the real wages of public service workers. The new Scottish Government pay policy caps basic pay at one per cent for those staff earning above £21,000. That’s 1.4% below the rate of inflation (RPI 2.4%) and of course comes on top of years of pay cuts. There is a continued commitment to paying the Scottish Living Wage and guaranteeing a minimum increase of £300 for staff earning less than £21,000.
Other headlines of interest to UNISON members include:
· A real term increase in the NHS budget of £80m. It remains to be seen if that will cover the increased demands on health boards, highlighted in recent leaked reports.
· The local government revenue grant is cut in real terms, with the exception of additional funding previously announced for free school meals. Extra revenue is anticipated from non-domestic rates and some additional capital leaving an overall standstill budget. The Council Tax freeze continues for the eighth year with no increase in funding. Local government remains the only major spending portfolio to have a cash cut since the financial crash.
· An extra £125m for housing that should underpin the building of 4000 new social homes.
· The spending to ameliorate the impact of UK government welfare cuts remains at £81m, including £35m on the Bedroom Tax.
· Police budgets are cut in line with the planned ‘reform’ savings of £130m. Police numbers are maintained at the continued expense of civilian staff. Best value principles are ignored.
· There is a slight increase in college spending and HE remains unchanged.
· An additional £16.6 million to take forward recommendations of the Commission for Developing Scotland’s Young Workforce.
· Scottish Water’s interest repayments put another £100m back into the Scottish budget
The increase in infrastructure investment will primarily be funded through a growth in PPP schemes. £2.5bn of these projects are now in the pipeline.
Overall there is little in the budget that was unexpected. Pay, local government and police take the biggest hit in the choices the Scottish Government has made in implementing the UK government’s ideological attack on public services.
Scotland's housing crisis needs urgent action and the staff who deliver the service agree.
UNISON Scotland has published a survey of Scotland’s housing staff today. It has exposed the reality of frontline staff trying to cope with the huge scale of Scotland’s housing crisis. 'Open the door: housing staff on the homes we have and the homes we need' – looks at the real experiences of members involved in all aspects of providing housing services: housing officers, housing assistants and lettings officers.
The majority of those surveyed (68 per cent) said funding for their service had gone down, negatively impacting on the quality of service they can provide. Three quarters of respondents said changes in welfare and benefit legislation has contributed to the problem. At its bluntest, welfare changes have made life more difficult for tenants and this in turn has created problems for housing staff.
While numbers matter, the best part of these surveys for me is the comments from staff. They tell real members stories in their own words. Here are a few examples from this survey:
"I work with homeless people. The pressure is increasing relentlessly. Demand is increasing as resources dwindle."
"[Benefit changes] have impacted massively and it will only get worse. Rent arrears have risen and you cannot take what people don’t have."
"Due to bedroom tax and direct payments of housing benefit to tenants we are seeing an increase in rent arrears and homeless rising due to more evictions."
"How is it possible for them to provide for the future of their housing with less staff and more homelessness. It’s not possible."
More than half of respondents (55 per cent) said they regularly work over their contracted hours while 58 per cent said staff numbers are in decline, meaning they don’t have as much time to spend with clients. Like other workers in public services, housing staff have been experiencing years of zero or minimal pay. Almost 70 per cent of workers said their standard of living had dropped in the previous three or four years, with many struggling to make ends meet.
For those who like the numbers, they paint an equally depressing picture. Scotland has 179,954 households with outstanding applications for social housing; of these some 29,500 are households on transfer lists meaning 150,000 households are waiting to enter social housing. The response to this in terms of house building is woefully inadequate. Only 10,686 dwellings were built between March 2013-14 by the private sector, 2,911 dwellings built by housing associations and 974 dwellings built by local authorities.
Allied to this are issues around the quality of housing. 349,000 homes in Scotland are affected by dampness or condensation. 647,000 households are in fuel poverty in Scotland. A total of 54 per cent of Scotland’s social housing currently falls beneath the Scottish Housing Quality Standard. 65,000 households are overcrowded in Scotland.
UNISON hasn't just outlined the inadequacy of current approaches. In our paper 'Making Homes for a Fairer Scotland' we outlined a new housing programme for Scotland. Equally importantly, we also showed how this could be funded, using some of the assets represented by public sector pension funds in our publication, 'Funding and Building the Homes Scotland Needs'. This would put these funds to a socially (and literally) constructive use in building a fairer Scotland. Alex Rowley MSP helpfully highlighted this plan in the recent debate on housing in the Scottish Parliament.
We also need to devolve Housing Benefit. Responsibility for housing policy without the main benefit makes no sense. This appears to have welcome cross party support, so should be one of the easier issues for Lord Smith's commission to agree on. We need to do this quickly before Universal Credit is rolled out in Scotland and the experienced council staff transfer or leave the service.
We have a crisis with the availability, the cost and the quality of our housing and we urgently need large scale investment to reverse Scotland’s housing crisis. Any plan for social justice in Scotland has to put housing at its core.
Health and care workers support integration, but fear it won’t deliver due to lack of resources
That’s the main message from a UNISON Scotland survey of workers in health and social care who will have to deliver the planned integration of health and care services in Scotland. The report shows that while many staff believe care integration provides an opportunity to improve services, but the impact of budget cuts mean services will get worse
Only 6% of workers involved expect conditions to improve in the next year. 68% believe the situation will get worse. 63% felt that their professionalism is or has been compromised by budget and resource limitations.
The report also includes many verbatim quotes from the workers in the front line. These paint a picture of services which are struggling to deliver.
"Clients are being restricted in activities because of funding as many other services are being withdrawn and a lot have been closed due to local government funding cut backs. This has an effect on family carers a lot of whom are elderly and can receive no respite from their home caring role.'
Staff are generally supportive of integration as an idea and can see advantages in closer working, but fear that a top down managerial model of change will make improvements more difficult
"I’m positive about working with practitioners, negative about being subject to another layer of managerial agendas."
The report builds on UNISON Scotland’s ‘It's Time to Care’ report which also outlined how tight resources are in Scotland’s residential and home care services.
A further indication of the pressures on staff comes in the latest SSSC workforce data. One in thirteen people in paid employment in Scotland now work in social work. However, the size of the workforce appears to have fallen for the third year in a row, from 192,360 in 2012, a drop of 1.4%, to 189,670 in 2013.
The private sector continues to increase its share of the labour market, employing 41% of people working in social services in Scotland. The public sector employs 32% and the voluntary sector employs 27%. This chart gives a breakdown by local authority area:
The largest types of social services are housing support/care at home, care homes for adults and day care of children; together, these account for almost 76% of the workforce. Housing support/care at home services saw the largest drop in the actual number of staff employed, from 64,290 to 61,350.
Around 79% of the workforce is employed on permanent contracts, which is the same as in 2013. Most are also full-time positions, though at least 10% of the employment appears to be on zero hours contracts or equivalent. As we know from the ‘Time to Care’ report this can have serious consequences for care standards.
I’ll leave the last word to the staff who deliver care.
"Lack of local authority care is resulting in delayed discharges within hospital wards which is placing greater strain on the NHS system. Sometimes packages of care are agreed and discharge is arranged but then there is physically not anyone to actually deliver the care"
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