The Jimmy Reid Foundation has published a fresh analysis of the Smith Commission proposals. CuthbertJRFSmithPaperMay2015
The paper, ‘Smith Commission: why the economic and fiscal arrangements need to be changed’, by renowned independent economists, Jim Cuthbert and Margaret Cuthbert provides a critique of both the economic and fiscal arrangements recommended by the Smith Commission and the proposals for implementing these recommendations set out by the Westminster government.
- The income tax base is very different between Scotland and rUK. This means income tax is an unsuitable choice as the primary vehicle for giving the Scottish parliament greater fiscal responsibility.
- There is no adequate solution to what we have called the ‘gearing problem’, namely, the problem that arises when changes in rUK in a tax which is devolved to Scotland are allowed to impact on reserved services: (that is, services, like defence, which are for the UK as a whole.)
- The Scottish Government is being given responsibility for living within its tax resources, without being given adequate powers to grow the economy, and hence its tax base.
- The technical arrangements surrounding the operation of the new system are unduly complex, and are unlikely to be able to be operated in an open and satisfactory fashion.
- Implementation of the Smith proposals will weaken the mechanisms for determining fiscal transfers which are a necessary part of the operation of a successful monetary union.
- A Scottish government operating under the proposed reforms will find itself severely constrained in its freedom of action, with the danger of Scotland finding itself locked into a self-perpetuating cycle of economic decline.
In terms of solutions, the Cuthbert’s argue the Smith Commission proposals will not be workable unless further reform is carried out in three main areas:
1. Recognition that fundamental constitutional change is required, not just in Scotland, but at Westminster. The paper argues satisfactory implementation of Smith depends on implementing a properly federal system at UK level.
2. Scotland requires much greater powers if it is to have a chance of making a success of increased fiscal responsibility. These powers are required in three main areas of a) more taxation; b) more economic powers; and c) ability to exploit and benefit from its major natural resources.
3. Technical problems surrounding the implementation of the Smith proposals need to be tackled. No satisfactory solution can be found without a radical simplification of the whole approach but such a simplification would only be possible under a federal approach.
Jim and Margaret Cuthbert commented: ‘The paper is of particular importance just now, when the new Conservative Government is putting forward its proposals and timetable for implementing the Smith recommendations: and when the SNP will be seeking to use its increased muscle at Westminster to modify the proposals to give Scotland greater powers’.
They continued: ‘The debates about implementation and modification have to be informed by a proper understanding of the problems inherent in Smith, some of which are highly technical, but have profound consequences. What our paper does is to provide a thorough analysis of the problems – as well as putting forward solutions’.
Glasgow University holds the personal papers of Jimmy Reid. The full reference for the collection is: University of Glasgow Archive Services, Papers of James Reid, GB0248 DC455
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Leading independent economist submits critical evidence to the Finance Committee of the Scottish Parliament on the implementation of the Smith Commission proposals.
Dr Jim Cuthbert has submitted critical evidence on Scotland’s Fiscal Framework in response to the Scottish Parliament’s Finance Committee’s call for evidence on the implementation of the Smith Commission proposals. The submission was made on behalf of the Jimmy Reid Foundation.
The evidence took the form of written responses to specific questions in the Finance Committee’s call for evidence. The common theme running through the responses is that it is difficult to envisage how the Smith Commission proposals can be implemented in a fair and equitable way, and without adverse unintended consequences, unless deep-rooted reforms in the constitutional and funding arrangements for Westminster are also implemented.
Commenting on this, Dr Cuthbert said: ‘This problem arises because of the implications of what is known as ‘the gearing problem’. It arises if changes in income tax rates in the rest of the UK (rUK) are allowed to affect not just ‘devolved’ services in rUK, but also reserved services for the whole of the UK’.
Dr Cuthbert continued, saying: ‘The proposed way in which the ‘no detriment’ principles in Smith are to be implemented does not provide a satisfactory answer to the gearing problem: instead, it leads to a situation where, if Westminster decides to change rUK income tax to fund a reserved service like defence, then this will force the Scottish government to increase the Scottish rate of income tax, or to cut Scottish devolved services like health or education’.
Dr Cuthbert’s evidence also discussed a number of problems which will arise in the implementation of the Smith proposals such as the operation of the proposed method for indexing the abatement to the Scottish Block Grant, and the need to index the adjustments to the Block Grant which will be required in the light of decisions to change rUK income tax.
In concluding, Dr Cuthbert proposed to the Finance Committee that the most appropriate way to resolve the issues in a satisfactory manner would be to have a rUK chamber responsible for taking the rUK Block Grant, setting the rUK income tax rate, and determining spending priorities on health, education, etc., from the resulting budget. There would also need to an over-arching body setting the whole UK budget, and determining the allocation of UK resources, (excluding income tax and other devolved taxes), between reserved functions and the territorial Block Grants.
The full submission is available here Finance Cttee submission
The outsourcing of public services provision to private providers has a detrimental impact on the workforce and a knock-on effect on the quality of care, says a new TUC report.
The research, conducted by the New Economics Foundation on behalf of the TUC, looked at the scale and scope of outsourcing in five key sectors – social care, health care, offender management, local government and employment services. The report also examined the effects of outsourcing on staff working in a variety of public service jobs, such as care workers, nurses, prison officers and security guards.
The TUC findings show that compared with public service employees, workers in privatised services are more likely to work longer hours, receive less pay and be on insecure or temporary contracts. Some key figures broken down by job-type are:
- Security guards are more than twelve times more likely to regularly work longer hours (more than 48 hours per week) if they are employed by a private company rather than the public sector.
- The hourly wage for a private prison officer is more than £4 less than an equivalent public sector employee.
- Residential care workers employed by the public sector typically stay in post more than three times longer than private sector workers.
Low pay and poor working conditions in the private sector can affect the commitment and the motivation of employees and have repercussions on the quality of service provided.
For more information and a breakdown of the statistics see the full press release at https://www.tuc.org.uk/node/122318
Ailsa, who died in March 2014, was a member of the Project Board of the Reid Foundation.
Ailsa is recognised for her key role in influencing government policy decisions that affect the lives of women, children and families. The conference will highlight Ailsa’s work in championing the position of women in Scotland’s economy through gender budgeting; her call for a transformation in childcare, whereby she urged greater investment in childcare provision as a common good and a source of employment as well as improving women’s access to paid employment by increasing provision of affordable childcare; and the promotion of a citizen’s basic income.
“Ailsa aspired for gender equality, challenged existing norms, and worked to improve the quality of life for women, their children and families. WiSE was Ailsa’s vision and the work of WiSE continues. We are honoured to celebrate her life and the outstanding contribution she made in Scotland and on an international platform to enrich the lives of women and our society” says Jim Campbell, Acting Director of WiSE.
The conference is organised by the Women in Scotland’s Economy (WiSE) Research Centre (WiSE), which was established by Professor McKay. The keynote address will be delivered by the esteemed Professor Marilyn Waring of Auckland University of Technology in New Zealand and Honorary Doctorate of GCU. Deputy First Minister John Swinney MSP and former First Minister Alex Salmond MSP will also address delegates. Other key speakers include GCU Visiting Professor Diane Elson; Honorary Professor and Chief Economic Advisor to the Scottish Government, Dr Gary Gillespie; and distinguished academic colleagues from other UK, European and Canadian universities.
The conference is held at Glasgow Caledonian University on Thursday, January 22 to Friday, January 23.
Visit the WiSE website for more information on the work of the research group
Scottish Parliament warned action needed to protect FOI
The Scottish Information Commissioner, Rosemary Agnew, has warned the Scottish Parliament that immediate steps must be taken to protect freedom of information (FOI) rights from the damage caused by the outsourcing of important public services. The Commissioner has made the warning in a Special Report to Parliament which is available on her website at: www.itspublicknowledge.info/reports. If you support her recommendations please let her know at email@example.com.
The Report explains that the provision to extend FOI to non-public sector organisations delivering public functions has been “woefully underused” in the ten years since FOI law came into effect, with the consequence that some public functions are no longer open to full public scrutiny.
The Commissioner’s report reflects growing concern about the impact of changes in public sector delivery on information rights. For example, since 2005, over 15,000 Scottish households have lost FOI rights following the transfer of local authority housing stock to housing associations, and the Scottish Parliament’s Public Petitions Committee is currently considering a call for FOI rights to apply to all housing associations. While the Scottish Government has the power to extend FOI to third parties that provide public services, this power has only been used once in the last decade. This was in 2013 for the designation of local authority leisure and culture trusts.
Commissioner Rosemary Agnew said:
“The first decade of FOI in Scotland is a real success story. Over 60,000 requests were made last year alone, and recent research revealed that 95% of the public believe that the right of access to the information held by public bodies is important.
“Worryingly though, our right to information is being slowly eroded. Rights have been gradually lost over the last 10 years as the responsibility for public service delivery is passed to third parties. These rights are fundamental to ensuring public services are open, cost-effective and accountable to the public.
“As the models for the delivery of public functions evolve and change, it is vitally important that the public’s right to the information held about the services that deliver them are protected and strengthened”.
The Commissioner’s Special Report, FOI 10 Years On: are the right organisations covered? contains a number of recommendations for action by Scottish Government Ministers to address her concerns. The recommendations include:
· adopting a policy to ensure FOI rights are migrated whenever a body delivering public functions or services changes
· carrying out a review to identify where FOI rights have been lost over the past decade, and reinstate them
· taking steps to ensure that FOI rights apply to those bodies responsible for social housing and private prisons and
· adopting a factor based approach to wider FOI designation, to ensure that FOI rights apply to bodies which are considered to be delivering functions of a public nature.
The Campaign for Freedom of Information in Scotland welcomed the report and said “We fully back the concerns of the SIC. indeed we have said since the FOISAct was passed in 2002, that a much wider range of organisations need to be covered. At that time the then Deputy FM (Jim Wallace) promised that housing associations would be considered for inclusion at an early stage. Unfortunately, successive Scottish governments have failed to act on this and the only extension has been to cover leisure and cultural trusts. It is long past time for FOI rights to cover all public services – whoever delivers them.”
The Campaign believes that the public’s right to know should be further extended to ensure accountability and transparency in the delivery of services:
“in addition to the list presented by the SIC, we could add many other bodies. Our care services are increasingly delivered under contract by voluntary or private bodies. Privatised services delivering public transport, roads maintenance, water and sewerage services et al. Even some regulatory services are now delivered by non-public bodies like the Citizens Advice Service. If the Scottish Government doesn’t grasp this challenge Ms Agnew’s concerns about the legislation being eroded will be well-founded.”
The latest Edition of Scottish Left Review carries an article by Chris Bartter of the Campaign for Freedom of Information in Scotland which explores these issues in greater detail.
The causes and consequences of the integration of health and social services in Scotland are investigated in the January-February 2015 edition of Scottish Left Review. Patients, service users, carers, workers and staff all give their views. The online version can be viewed at http://www.scottishleftreview.org/
As the articles make clear whether what is on paper is a good idea realised in practice, is far from straightforward. Again we have secured a range of contributors to inform and provoke debate. The Minister Shona Robison sets the scene with ‘Keeping the NHS fit for purpose’ and Neil Findlay argues that ‘Social care is the key to freeing up our NHS’. We also have perspectives from workers, service users and carers, and consider the impact of reforms with articles on ‘Potential problems aplenty’ by Dave Watson from UNISON and the freedom of information issues that arise from changes in the delivery of public services, by Chris Bartter.
As the plans for integration are rolled out across health boards and local authorities when they establish joint integration bodies, the Reid Foundation has announced that it intends to examine them in more detail by commissioning research.
In Issue 85 there is a range of ‘off theme’ articles including Cat Boyd on ‘For the left in Scotland, failure isn’t an option’ and on Labour after its leadership result by Bob Thomson. There are also book reviews and Vladimir McTavish’s ‘Kick up the Tabloids’.
A full list of contents are:
- Keeping the NHS fit for purpose – Shona Robison
- Social care is the key to freeing up our NHS- Neil Findlay
- TTIP – threatening terrible, traumatic, invasive potential – Richard Doherty
5.Health and social care integration: equal access for all? Tressa Burke
6.When the political is highly personal – John Daly
7. Can good intentions lead to good results? Paul Arkison
8. Potential problems aplenty – it doesn’t have to be this way – Dave Watson
9. Knowledge is power? Chris Bartter
10. Prioritising workers’ health and well-being – Andrew Watterson, Tommy Gorman and Jim McCourt
11. A very Westminster coup – Bob Thomson
12. The Scottish Greens after the referendum – Peter McColl
13. For the left in Scotland, failure isn’t an option – Cat Boyd
14. Which way forward is left? Gary Fraser
15. Can capitalism really put ‘All of us first’? Philip Stott
16. A very ferry failure? Mick Cash
17. Who is watching the detectives who watch us? Niall McCluskey
18. Book reviews
19. Vladimir McTavish’s Kick up the Tabloids
The Freedom of Information (Scotland) Act 2002 (FoISA) came into force ten years ago and gives people an enforceable right to access information held by certain bodies with devolved public functions in Scotland. For example councils, health boards and Universities. It is also 10 years since the introduction of the right to access information held by UK Government and public bodies such as the Department of Work and Pensions (DWP).
So what difference has the right made? Research, conducted by Ipsos MORI in October 2014 found that public awareness of FOI is at an all-time high of 84%, 95% of the Scottish public thinks that the right to access information held by public authorities is important while just 8% of people feel that freedom of information (FOI) is a waste of public money.
According to the Campaign for Freedom of Information in Scotland the enforceable right has played a major part in informing the public about the state of public services. The Campaign’s director, Maurice Frankel, said: “The FOI Act has been responsible for a new generation of official data showing where standards of public services are falling short, regulators are failing to keep up and policies are not having the promised effect.” But the Campaign said that the increasing use of private contractors and others to deliver public services is weakening the public’s right to know. Now is the time for FoISA to be extended to a range of new bodies so that the public’s right to know remains robust and relevant to our lives and concerns.
There are numerous examples of how using this enforceable right has benefitted service users and staff alike, individuals and communities For example much of the home support provided to elderly or vulnerable people is supplied in short 15-minute visits commissioned from private providers. It is often impossible to provide the range of support people may need in this time, including help in getting out of bed, dressing, bathing, using the toilet and taking medicines. An FOI survey carried out by UNISON in 2013 found that 69% of English councils provided at least some of their care in 15 minute slots with 83% of Welsh authorities and 88% of Scottish councils doing so.
To read the Campaign’s press release in more detail go to http://www.cfoi.org.uk/2014/12/foi-act-celebrates-its-10th-anniversary-on-january-1/
The Scottish Information Commissioner enforces the right to access information and she has declared that ‘Access to information is one of a range of mechanisms through which citizens can engage with public bodies and hold them to account for their performance, their spending and their decision-making. Scottish FOI is in generally good health and is a right that is known about, valued, and used. Data from public authorities suggest that over 60,000 FOI requests were made in 2013/14, with more than 90% resulting all or some of the information being provided, and less than 1% being appealed to me.’
“It’s not all positive news though. At the same time as support for FOI has increased, real concerns have arisen that FOI rights are being lost as the delivery of public services changes. For example, in the 10 years since FOI came into force, it is estimated that over 15,000 households in Scotland have lost information rights through the transfer of local authority stock to housing associations. It is a loss not only to the households themselves but to the public at large, calling to question whether such a vital service can truly be open and accountable. I am also not convinced that enough consideration has been given to extending the coverage of FOI to new areas.
“That is why I am preparing a Special Report for the Scottish Parliament to explore this important issue. My aim is for the Report to promote a constructive and grown-up debate about how we collectively ensure that rights keep pace with change, rather than fall increasingly behind.”
The Commissioner’s Special Report will be published in January 2015.
For more information go to the OSIC website http://www.itspublicknowledge.info/home/News/20141211.aspx
The Scottish Government has announced that it will publish a consultation paper on the extension of FoISA to new bodies, and other matters, in Spring 2015. In the meantime you may want to check out the information it produces on FoI at http://www.scotland.gov.uk/About/Information/FOI
New Report submission to the Smith Commission by Jim and Margaret Cuthbert.
Click to view: CuthbertSmithsubmission
We are pleased to publish the submission to the Smith Commission by Jim and Margaret Cuthbert which cautions against the devolution of income tax.
Based upon a searching fivefold set of criteria against which proposals for increased fiscal responsibility for the Scottish Parliament should be judged, Jim and Margaret Cuthbert caution against what has now become the dominant mainstream view regarding the devolution of income tax. They argue this could penalise Scotland in terms of resources. They recommend, instead, concentration upon national insurance and land taxation.
They also recommend the exercise of reserved powers and transfer of others (including fisheries, the crown estate, and aspects of representation in Europe). In other areas, they argue what is required is something like a micro-federal solution, where power is shared between Scotland and Westminster, but in a quasi-federal manner which means that the numerical preponderance of England does not simply dominate: these areas include monetary policy, oil and gas policy and taxation, utilities regulation, corporation tax, competition policy, and research and development and support for innovative industries.
The Common Weal Project was based on a range of policy papers commissioned and published by the Jimmy Reid Foundation and was part of the Foundation. These policy papers detail progressive policies which, if implemented, could help to create a fairer, more prosperous Scotland no matter the outcome of the Referendum. The Foundation does not take a position on how people should vote on 18th September 2014.
The Common Weal vision has gained thousands of supporters in a few months as witnessed by the 700 plus people of all age groups who turned up for the Festival in Glasgow on 6 July. Many of these supporters wish to see the Common Weal expand its objectives and activities. As The Foundation was set up primarily as a think tank and to energise activity, the Foundation has undertaken a discussion on the Common Weal Project’s future and its relationship with the Foundation. As result the Common Weal has now established itself as a separate, self-standing organisation. Robin McAlpine has resigned as Foundation Director and is now Director of the Common Weal. You can access its website here or at www.allofusfirst.org . All Common weal papers to August 2014 will remain available on the Foundation website.
The Foundation wishes the Common Weal well for the future and will seek to co-operate on issues of mutual interest. Many Foundation supporters also support the Common Weal and it is hoped this can continue.
Scottish Left Review Magazine
The July/August issue will be merged with the next issue, No 83, which will be a post Referendum special edition. Thereafter publication will return to the bi-monthly cycle.