Tagged: local government

Devolution: the Constitution Committee misses the point

The House of Lords Constitution Committee has published a report on Devolution in the UK.  It’s primarily focused on the relations between the four nations; that means that, despite taking a wide range of evidence, it misses the point almost completely.  It doesn’t understand the most fundamental problem with the whole idea of devolution: that power in the UK is overwhelmingly centralised.  Local government in the UK used to be responsible for hospitals, social assistance, public housing, gas, electricity, water, police, fire, public health, schooling and transport.  Local authorities could develop enterprise, issue bonds to borrow money, and raise money for specific projects. All of those powers have been taken away.  The promise of the ‘Northern powerhouse’ is a pale shadow of what local government used to be.

During the Scottish referendum campaign, I wrote about The failure of the UK.

The most obvious problem is remoteness –  the problem of London-centred government.   That was a problem in the 1920s and 30s, and the centralisation of the UK since World War II  has made it progressively worse.   The process began with the centralised control of services and resources that were necessary in wartime; after the war, while central government gradually (and reluctantly) relinquished control of industry and markets, it retained control of resources and services that were formerly part of local government.  … In the process, the regions – all the regions – have been left behind.  It’s not just the arrogation of control to the centre over public services; it’s been the sustained campaign to deny any part of the regions the power to borrow, to build,  to take action on behalf of their population.

The process of ‘devolution’ is about delegating scraps of authority, rather than allowing regional and local authorities to act.  Federalism is not about the grant of authority: power in a federal government is reserved to smaller units.  There is no understanding in this report of that principle or what it implies.

Scotland speaks in tongues

Eric Hobsbawm cites Renan as saying that “Getting its history wrong is part of being a nation”.  Part of the movement to create a story for Scotland has been the emphasis on Gaelic, a language spoken in some parts and hardly at all in others, where the dominant language was Scots, though variants included Lallans, Doric and dialects incorporating Norse.  Some people use Gaelic at home, mainly in the Western Isles, but more use Scots or Polish, and other languages spoken in Scotland include Urdu, Punjabi, Chinese, French, British Sign Language, German and Spanish.  Most people I’ve discussed the issue with regard the attempt to create a fictive Gaelic heritage with a bemused tolerance – it pleases some people, and it doesn’t do much harm.  When it starts interfering in the interactions between citizens and government, it’s another matter.

Fife Council’s Gaelic Language Plan 2015-2018 is up for consultation.  It tells us that in an online survey of council employees, they were able to identify 14 people who understood some Gaelic.  No-one claimed to speak it well; two spoke it ‘fairly well’, and seven people could read it.  That is out of over 20,000 employees (the last figure I have was 20,400).  The plan also proposes to put the home web page – the one that people come to when they are looking for help – half in Gaelic. So Fife Council is proposing to put half its web page into a language that only seven staff it knows of can read.

The problem is not just that Gaelic is not spoken in practice, but that speaking it (or claiming to speak it) is a way of defining insiders and outsiders.   What does it communicate, when local government  presents itself  in a language that very few people in the area use?   To people with limited access to broadband, using mobile technology or just struggling to use the web, it’s an obstacle to making contact or getting information.  To people whose first language is not English, it elevates Gaelic to a status that we don’t give to other minority languages – a good way to tell people they’re third class.  To people with limited functional literacy – more than a fifth of the people in Scotland –  it’s another hurdle to negotiate.   And to people who aren’t bilingual in Gaelic, the message is  simply this:  “you are an outsider”.  It’s hard to think of an approach that’s more exclusive.

The power to borrow

I’ve emphasised the importance of the power to borrow, and I’m going to take the opportunity here to explain that further now.    One of the immediate reactions I’ve heard when I make the argument is that the last Scotland Act (2012) increases borrowing powers.  Not quite.  According to the government website,

Under the powers enabled by the Scotland Act 2012, from 2015-16 the Scottish Government will be able to borrow up to an overall limit of £2.2 billion for capital spending by way of loan from either the National Loans Fund (part of the UK Government) or from commercial banks. By borrowing through the National Loans Fund, Scottish Ministers will have access to what is likely to be the most competitive form of finance available, benefitting from the UK’s low borrowing costs.

That says two things.  First, the borrowing is allowed only on terms that mean the Scottish Government really must  borrow it from the Treasury.  Second, it’s capped, and capped tightly.  £2.2 billion may sound a lot, but  the estimated cost of upgrading the A9 from Perth to Inverness is £3bn. This is not, then sanction  to undertake the kind of major works that Scotland needs, for example in transport, energy, housing and urban development.

Long ago, local authorities in the UK raised money by issuing bonds, which were sold to a variety of purchasers at a fixed rate of interest.   This is how they built roads, housing, water supplies, energy companies and much else .  Central government gradually restricted that power, requiring ‘loan sanction’, then imposing caps on total expenditure, and finally stopping it happening almost completely.  The reason for imposing those controls was initially a desire to control borrowing in the economy overall, then a desire to limit the “Public Sector Borrowing Requirement” (a term which wasn’t in use when I started studying economics), and at the end a desire to limit total public expenditure.  This progression makes no sense.  If the aim is to limit overall borrowing in an economy, it’s essential to limit private sector borrowing (as we used to).  Once you can’t do that, limiting nothing but public sector borrowing – and even permitting activity as long as it’s kept off the public sector books – stops being about economics.  It’s about politics – rolling back the frontiers of the state – and there is no good justification for it.

There are two main arguments for local borrowing.  One is that, so long as it is used for capital  projects rather than to support current spending,  it stimulates local economies, directly and immediately.  Second, it makes it possible to spread the cost so that people who get future benefits meet a proportion of the costs as they arise.  Allowing public authorities to issue bonds is the standard way of raising cash on these terms, and that is what should be permitted.

Update, 3rd February 2015:  According to the Financial Times, 48 local authorities in England have now formed  a municipal debt agency to issue bonds, expected to raise £2bn-£3bn every year.  It’s not clear from the report whether or to what extent the Treasury has subjected this to limits.

The argument on powers

The nation-state is dead, Scotland on Sunday argues in today’s editorial; the real issue now is about powers.   The choice lies, as they see it, between a position where an independent Scotland  cedes powers in a negotiation with other authorities, and one where a devolved Scotland gradually gains greater powers through devolution from the United Kingdom.

The powers currently on offer fall short, however, of the devo-max that  many people in Scotland want to see.  They fall short even of the powers that a local authority would have had a century ago.  Local authorities have lost, in the last 70-80 years, powers over social assistance, police, fire, hospitals, water, energy, public transport, and much besides – they may have some residual powers over housing, for example, but nothing like what they used to have.  One of the key powers they’ve lost, though we hardly noticed it going, is the power to borrow on the markets by issuing bonds; another is the power to create jobs.    Scotland, and much of England, need powers to regenerate local economies, to make jobs, to develop infrastructure and to build.  It’s not on offer.

I don’t see this changing with a ‘no’ vote.  The problem lies, like many problems in the UK, with the Treasury, which would have to let go, and with the neo-liberal dogma that holds to the idea, despite decades of evidence to the contrary, that government can’t create jobs and that public borrowing is always bad.  It’s not going to happen.

Nationalism versus metropolitanism: do we want Scottish government to be more like Glasgow?

At the Scottish Urban Regeneration Forum conference, I heard an interesting argument from Gordon Mathieson, the leader of Glasgow Council, who was speaking for ‘Better Together’.  He argued that the Nationalist government, in pursing their project of nation-building, had introduced measures to centralise powers on the Scottish Parliament.  I think that’s right – they have centralised police and fire services,  finance and audit, and are in the process of centralising social care.   What he hoped to see, instead, was ‘metropolitanism’ – focusing on the city-regions (such as Glasgow) rather than Scotland as a whole.  He saw Glasgow as having more in common with Manchester than with Moray.  This, he claimed, was a different, alternative approach from independence.  There, too, he is right: it is a genuinely different position.  I don’t however think  that it’s a particularly persuasive model.  Local authorities in Scotland are big and remote from the people they serve.  At the same time, they find it challenging to organise local services under national constraints.

There is another alternative.  Robin McAlpine, for the Common Weal, argued at the same conference for smaller, participative local authorities on the model of Norway.  That’s an attractive option.  We need to think in terms of  multi-level governance, where a range of different authorities are empowered to meet needs at different levels.  I’m not sure, unfortunately, that a vote either for ‘yes’ or for ‘no’ will do much to bring this about.

Thoughts on a Scottish Constitution

The Scottish Government has produced a consultative document on a  constitution for an independent Scotland.  I’ll be responding to the consultation in due course, but there are some issues that stand out  on a first reading.

A constitution is not just a matter of identifying institutions.  There need to be rules about how things are done:  in Hart’s terms, rules of recognition, change and adjudication.  In relation to recognition, although the constitution refers to the ‘sovereign will of the people’, it only identifies one route by which laws are made, and that is the Scottish Parliament.  It doesn’t state that the Scottish Parliament is able to delegate any part of that authority.  The need for delegation is unavoidable – for example, in the issuing of statutory regulations, or the passing of by-laws by local government or statutory agencies.

On change, there is something missing.  This may be an interim constitution, but there is no provision for it to be changed except by its complete replacement.  Provision for amendment is basic.

On adjudication, the bill tells us that there will be a court, but not what the powers of the courts will be.  There are ‘civil’ and ‘criminal’ branches, but not a constitutional branch.  Can the courts adjudicate on the constitution, or will they be overruled by government?  Can there even be judicial review of government action, short of breaches of human rights?  What will happen if the courts and the Parliament disagree?

Those are the fundamental issues, but there are other significant questions besides.  The powers of local government, as described here, are very limited indeed.  Local government is there ‘to represent and promote the interests of the people living within the local area’.  That is, more or less, the current role of a parish council, and it falls a long way short of the powers local governments need to provide public services or to undertake public projects.  Local government in Scotland has rather more powers now (even if they’re less than the powers permitted to councils in England); they need the power to act on behalf of a local population to increase welfare and to serve their population.

The provision on nuclear weapons will be controversial, but regardless of the merits of the principle, this is very badly expressed.  A constitutional principle should be general, enduring, and relate to the powers of the government; this doesn’t meet any of those criteria.  Government is supposed to negotiate about disarmament – what, even after the negotiations have been concluded?  Why just nuclear weapons?  What about WMD, chemical weapons, biological – or even conventional arms?  A constitution is supposed to provide for the use of legitimate force and the establishment of armed services – this one doesn’t.

The other point I’d raise at this stage is one that isn’t here, or in the US constitution, or indeed anywhere else – a definition of the powers of government in relation to foreign citizens.  Can our government declare war?  Kill foreigners?  Spy on them? Arrest them?  Deport them?  (If  they are “in Scotland” they are “entitled to its protection and benefit”.)   We’ve seen in recent years that international law doesn’t act effectively to constrain most government action; a constitution has to.

Councils doing business

My eye was caught earlier this week by the news that Travelodge, which runs budget hotels, has been approaching local authorities to get them to build hotels for Travelodge to run.  The arrangement will enable to councils to get a returrn on land, as well as a degree of city centre investment.  It needs, however, loans (or at least, loan sanction) from the Treasury.  There have been some initial developments on this basis.

I’ve long been of the view that government, and local authorities, should be able to do whatever is appropriate to advance the welfare of their citizens; that’s what they’re  there for.  I’ve suggested, too, that governments should be able to engage in enterprise and make profits for its citizens.  The intriguing thing about the Travelodge proposal is that the initiative has come from the private sector – which seems to make it politically acceptable – whereas initatives from within the public sector are knocked back.  Active government is one of the principal means of generating economic activity, employment and growth, and any policy for regeneration depends on it.

Local authority led pilots

The DWP has released a report on local authority led pilots for Universal Credit. It’s pretty feeble stuff. Some local authorities report that only 50-60% of claimants have access to the internet. The local authorities have tried out several ways of extending coverage, including sticking a logo on paper forms saying ‘Don’t stand in line, do it on-line’, hosting job fairs or offering digital training in job clubs. This is supposed to lay the foundations for a system serving eight and a half million people. It has to be accessible to every one of them, it has to work first time and every time, and it has to be accessed every month. And the need is urgent: while the scheme is behind schedule, it was supposed to be open to new claimants in less than three months from now.

There is a role for local authorities, but to meet it they are going to need to think in much grander terms. The kind of model I think we need is something like the French Centre communal d’action sociale (CCAS), a local authority office where some benefits are administered but more importantly claimants get help preparing their claims. They are going to need computers, scanners, printers and advice and access to microphones or phone lines, because the system will not work without these things. They will need proofs of identity, correspondence addresses and bank registrations. Forget the little projects that the pilots have been footling around with. This is at least as big a job as when councils took on the responsibility for Housing Benefit in the 1980s – possibly bigger. It can’t be done by trying to spot areas of high demand, because that excludes the rest. Local authorities have to prepare to serve every citizen who needs to claim – that could be a third of all households. They need to be ready to deal with thousands of claimants every day. The outlook is grim; if nothing is done, it will be grimmer still.

Scotland's powers and the Social Fund

This is from a discussion from the Scottish Parliament’s Welfare Reform Committee, 1st May 2012:

Jackie Baillie: Evidence from Professor Paul Spicker suggested that the Scottish Government does not have the power and competence to deliver benefits and the replacement social fund, and you appear to have opted to use local government powers, through a section 30 order. Is that why you said that you are considering introducing a social fund bill in 2013-14?
Nicola Sturgeon: We would need the section 30 order to legislate, as well. We have chosen the approach that I described partly for reasons of speed, so that we can get the interim arrangements in place, and because we are confident that we can do it in such a way. Our preferred approach of legislating later is just that—a preferred approach—and is not being taken because we consider that we require primary legislation. However, because of the interaction with social security we need a section 30 order, combined with the general power to advance wellbeing that local authorities have, to put the arrangements in place.
Jackie Baillie: Was he correct to say that there are issues of competence, which you have managed to overcome?
Nicola Sturgeon: To whom are you referring?
Jackie Baillie: Professor Paul Spicker.
Nicola Sturgeon: Before I could say whether he was correct I would need to look at the evidence. I would be happy to do so and to tell the committee what we think of it, if that would be helpful.
Jackie Baillie: It would be helpful to our consideration to understand what powers the Scottish Government has and for what purpose you would seek a section 30 order.”

So – am I right? The straight answer is, I don’t know. The issues are complex; the powers conveyed by the devolution settlement relating to local government can be read in different ways; in the event of a dispute, it is often difficult to know what an authoritative interpretation would look like. My main concern in raising the matter publicly now is to ensure that any resolution will not involve delay, confusion or denial of service to people in need. The resolution seems to hang on what the proposed section 30(2) order actually says. I am reasonably confident that the problems can be ironed out, but any practical solution is going to need to clear the ground so that Scottish and local government can operate effectively.

A further note, June 2012. A note from Nicola Sturgeon says this:

“The Scottish Government’s position on Professor Spicker’s submission is that his analysis of the power to promote well-being, specifically as enabled by section 20(2)(b) of the Local Government (Scotland) Act 2003 is generally consistent with our own analysis … we do intend to work with the UK Government to bring forward an order under section 30 of the Scotland Act, to ensure that the desired policy can be delivered using to power to promote well-being.”

The power of well-being and the Social Fund

With the coming abolition of the Social Fund, local authorities might be expected to do something to fill the gap. Local authorities used to offer loans before the introduction of the Social Fund in 1988. Local government in Scotland now has a general power to promote well-being, and I have to confess that I had blithely assumed this power would make it possible to develop alternative systems for delivering financial assistance. The recent debate about the powers of the Scottish Parliament has prompted me to rethink.

Under the 1998 Scotland Act a range of powers were devolved to the Scottish Parliament, with a large number of explicit exclusions. In 2000 the UK Parliament devolved additional powers to English and Welsh local government, including a general power to promote well-being (Local Government Act 2000, s 2). The promotion of well-being includes a power to “give financial assistance to any person” (s 2 (4)). In 2003 the Scottish Parliament followed suit, creating a general power to promote well being. The 2003 Local Government in Scotland Act grants Scottish local authorities the same powers (s.20), using the same wording as the Act for England and Wales.

However, the Scottish Parliament does not itself have these powers. It is expressly denied that role by the definition of reserved powers in the Scotland Act. So, it cannot make provision for “Schemes supported from central or local funds which provide assistance for social security purposes to or in respect of individuals by way of benefits.” (Scotland Act 1998, schedule 5 F1) If the Scottish Parliament did not itself have a power to give people financial assistance, it could not have granted that power to local authorities – the only authority could have come from the UK Parliament. If that is right, it is possible that English and Welsh local authorities now have a power that the Scottish Parliament and Scottish local authorities do not.

Further note, 15th February 2011. The Scotland Office has written to say that they will be addressing the issue of competence in the legislation to ensure that the necessary powers will be in place. That should resolve the specific issue with the Social Fund, but it may recur in other fields if the general issue of competence is not addressed.