Democracy on your Doorstep

“When you are in local government, you are on the ground, and you are looking into the eyes and hearts of the people you are there to serve. It teaches you to listen; it teaches you to be expansive in the people with whom you talk to, and I think that that engagement gives you political judgment.” – Valerie Jarrett

(This blog post previously appeared in Common Weal’s weekly newsletter. Sign up for the newsletter here.)

Scotland is now in full campaign mode for our Local Authority elections. There will be leaflets stuffed through letterboxes. There will be photos of smiling campaigners with their Great Responses At The Doors. There will be enticements and blame games, celebrations of political records and promises of what will absolutely, definitely come your way if you only vote for one candidate or another.

For a first time or an inexperienced voter, this can be a confusing time – especially when various parties are all telling you to vote in a particular way. If you do happen to be a first time voter and would like to know how the voting system works in this election and how your vote translates into seats then I have written a political party neutral guide over on my personal blog here. I’m also in the process of collecting as many party manifestos as I can here – not as an endorsement of any them but to make it easier to compare and contrast all of them.

I’m proud of my own push for elected office five years ago and I really think it’s a thing that as many people as possible should do and should be able to do at least once. Even if you don’t win (as I didn’t), there’s a certain rite of passage to it and it can act as a window into a world that would otherwise be even more closed off and opaque that it currently is. The more people who are directly  involved in politics, the less the sector is able to close itself off into a clique who act only for themselves.

There’s another barrier in Scotland that acts to prevent people getting involved in the politics of the country and that’s Scotland’s abnormally centralised democracy. What we’re right now calling our “Local” elections are anything but. That lack of democracy is not just a barrier to politics getting done but also a barrier to people (especially people with young families or accessibility needs) from getting involved in politics – if folk are barred from making decisions that affect them, they will always come off the worst for it.

In most countries in Europe there are up to four tiers of Government. The largest you could call “National” or “Federal”, below that you’ll find some kind of “State” level government, then a “Regional” government and finally, the most local of all, a “local” or “municipal” government. These lowest tiers of government are often extremely small. Rarely larger than a whole town or a collection of villages but sometimes as small as a single hamlet – the smallest municipality in Germany is the island of Gröde in Germany with a population of just seven people.

In Scotland, there are effectively three tiers of government that exercise power over our lives and communities. Being a unitary state, the “National” government is the UK Parliament in Westminster. The devolved Scottish Parliament is the closest we have to a “State” Government – for the important differences in parity, power and esteem between a devolved government and a true state government, see my paper on UK Federalism here. Below this, we have our “Local” Authorities – many of which are larger in geography and/or population than some small European countries. Below this, we have effectively nothing. Even many English parish councils are more powerful. We do have a statutory right to Community Councils and don’t get me wrong, the places that do have functioning and effective Community Councils do see good work come out of them but they are not a substitute for municipal government.  For a start, these councils have next to no actual power and effectively no budget. This lack of power has led to an ossification in many places where the council has become dysfunctional and a place where small fish exercise their control over even smaller ponds. Worse, across about half of Scotland, these community councils don’t exist at all. This includes my own village where a suggestion a few years ago to the local community group that we should form one was met with a horrified, despairing reaction of “but that means we might have to have elections”.

My wife and her family are German so their example is the one closest to me in terms of comparative experience. My Schwiegervater lives, geopolitically, in a very similar place to us in Scotland. We both live in a village (ours with about 2,000 people; his about 700), near a slightly larger town (ours with about 15,000 people; his about 30,000) and within a reasonable commute of a major city of about a million-ish people (Glasgow for us, Cologne for him). Above that, our “State” populations diverge somewhat – North Rhine-Westphalia has a population of about 17 million compared to Scotland’s 5.4-ish million. Then, of course, Germany is a little larger than the UK with populations of 83 million and 67 million respectively.

Now, comparing the respective power of each of these government tiers is inevitably tricky. Absolute or even per-capita spends don’t always tell the full story – for example, German public spending per capita is significantly lower than UK public spend per capita and a good chunk of the difference appears to lie in the fact that German healthcare is largely privatised. What may be a slightly better way of looking at things is to examine where public spending is controlled as a percentage of overall budgets. This line of reasoning led me down a rabbit hole of trying to track down, translate and then read piles of German municipal budget records. It’s about as fun as you can imagine (for a stats geek…quite a lot!). It also led me to speaking about that journey in the keynote speech to the Scottish Community Development Network at the tail end of last year and which you can watch below:

Scottish Community Development Network

What we find in Scotland is that spending is incredibly centralised. About 84% of public spending in (or on behalf of) Scotland for “me” in my area is controlled by either the UK or Scottish Government. The remaining 14% is controlled by my “local” authority in South Lanarkshire – a region that stretches from the outskirts of Glasgow, through the urban Central Belt of Hamilton and East Kilbride down through rural Clydesdale till it meets the Borders.

As I mentioned above, I don’t have a Community Council in my village but even if I did, they wouldn’t control any public budgets to speak of.

Public Spending in Scotland
Public Spending in Germany

Contrast this with Germany where the Federal Government isn’t even the “most powerful” tier of government in terms of spending on my father-in-law’s public services and between them and the state government in North Rhine-Westphalia only account for only about 70% of total public spending. Cologne’s regional government is significantly less powerful than South Lanarkshire at about 10% of total spending but look at the difference in spending from a local level. Almost one public euro in every five is spent directly by the local municipal council that, in his area, covers the local town and its surrounding villages. As an interesting aside, I also discovered that our two regions have a public Participatory Budgeting scheme and Cologne’s has been praised as an example to look at in European democratic circles. However, on a per capita basis it is only a fraction of the size of South Lanarkshire’s own PB scheme. This could be a subject for another time but I wonder if the comparative strength of German local government means that it simply doesn’t need such ad hoc funding streams to fill in the gaps.

Common Weal has already published a blueprint for local government reform in Scotland that would restore some form of localism – our Development Councils take the best of what our Community Councils have to offer but expand, improve and empower them and the citizens of the community who would control them. They would, yes, be based on a model of drawing powers down from Local Authorities but that should preclude a wider discussion about devolving powers from elsewhere. The example of Germany shows that if Scotland does decide to restore a form of truly local government then it cannot be a case solely of devolving powers from regional government to local but should involve a wholesale view of where powers should lie across the board. I am a big believer in subsidiarity which means that powers shouldn’t be devolved down from above at all. Instead, all power should be presumed to lie with the municipal government and only devolved upwards to a higher level when a compelling case is made to do so.

And, of course, while I’ve discussed powers of public spending here I haven’t touched at all powers of tax and revenue raising. The same principles should apply here too and local councils should be granted much more in the way of ability to fund its own programmes (balanced, of course, by some kind of levelling mechanism between richer and poorer regions). The irony of the Scottish Government right now is that it is quick (though correct) to complain that its own powers and own funding avenues are too limited and too tightly controlled by the government above it but then treats the government below it in almost exactly the same way with even the one major tax power in the hands of Local Authorities – Council Tax – tied up just as tightly and too often used as leverage against our councils.

As we go and vote in our “local” elections this year we have to remember that the way Scotland is run is very far from what our neighbours in Europe would call normal. Campaigns for this kind of democratic reform in Scotland are not coming from a place of “radical transformation”. We’re already the outlier in a continent where democracy starts at your doorstep. It’s the country we deserve too. Creating it merely requires those who currently grip tightly to their reigns of power – at all levels above the local – let go a little and trust us to run ourselves. For those of us in the independence movement, this is already one of the most compelling arguments in favour of our national cause. Scotland deserves to be a normal country and that starts with allowing us to make decisions right here, on our doorsteps.

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We Need To Talk About: GERS (2020-21 Edition)

“Never make predictions, especially about the future.” ― Yogi Berra

This article was previously posted on Common Weal. You can also read my previous work on GERS on this blog behind the following links: 2013-142014-152015-162016-172017-18, 2018-19 and 2019-20

In my analysis of GERS last year, I remarked that this was in a very real sense the end of an era not in the sense that it would show us anything different from the previous years but that it was the last year that wouldn’t. Covid has upended the entire world and for statisticians that means the worst possible thing that could ever happen to their data tables – a discontinuity.

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We Need To Talk About: GERS (2019-2020 Edition)

“Those who cannot remember the past are condemned to repeat it without a sense of ironic futility.” – Errol Morris

This article was previously published on Source under the headline “The UK is Pooling More than it Shares”.

You can also read my previous work on GERS on this blog behind the following links: 2013-142014-152015-162016-17, 2017-18, and 2018-19.

In many ways, this year’s GERS report marks the end of an era. It’s not that the report itself is going to change drastically or that we’ll finally reach the point of independence where we can stop moaning about how independence is impossible/necessary and that our fiscal position is fundamentally strong/weak and improving/declining compared to the rest of the UK (delete as per the report’s figures and your personal political position). It’s more that the Covid-19 crisis has completely changed the way that a state’s finances work. This year’s GERS report does include the initial measures implemented in response to Covid but only the initial responses up until the end of March. The full impact of this unprecedented fiscal year shall not be felt until the GERS 2020-2021 report next year.

We’ve entered a new era in which almost everything in government will be judged either as “Before Covid” (BC) or “After Covid” (AC). The assumptions that governed our economy have changed. Spending plans have changed. Priorities have changed.

But until then, this final GERS report of the BC era largely just repeats the arguments already well rehearsed in previous years.

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How to Give Money to Everyone

“The conditional programs inherently use poverty as a threat. That’s Cruel. Shouldn’t we be ashamed of ourselves?” ― Karl Widerquist

The mounting crisis caused by the COVID-19 pandemic is forcing countries to adopt unprecedented measures to combat it. In addition to the public health measures such as physical distancing (not social distancing. At times like this we need MORE social solidarity) we’re also seeing unprecidented measures being deployed to salvage an economy that has practically ground to a halt. Unlike any economic recession since possibly the 1930s we’re seeing a combined demand and supply shock. The virus makes it hard to make and sell things and everyone is at home in quarantine so no-one is buying the things anyway.

This isn’t true of all sectors of course and a great deal of effort is being expended to keep essential services like food deliveries running. In addition to my friends working in the health service and my family working in the care sector, my hat goes absolutely off to my friends working in the food sector. When the day comes that we’re allowed to buy a round for each other again, they’ve all more than earned a few from me.

180322 NoirHat

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We Need To Talk About: GERS (2018-19 Edition)

“Fact be virtuous, or vicious, as Fortune pleaseth” – Thomas Hobbes

It’s that time again! The annual GERS report has been released and interested parties continue to analyse, pick apart and spin the numbers as required. And my now annual tradition of diving into the numbers continues with another installment.

GERS 2018-19.png

You can read my coverage of GERS 2013-14, 2014-15, 2015-16, 2016-17 and 2017-18 behind those links.

You can read the report and download all of the data tables for this year’s report here.

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We Need To Talk About: GERS (2017-18 Edition)

“Facts are stubborn things, but statistics are pliable.” – Mark Twain

There’s no day that’s guaranteed to set the heather alight amongst Scottish political social media sects like the release day of the annual Government Expenditure and Revenue Scotland report – also known as GERS.

GERS

I want to make one thing clear up front. No serious commentator now suggests that GERS can be used as is as a projection of the finances of an independent Scotland. My 2016 paper “Beyond GERS” shows some of the changes that would need to be made for this to be the case. But as a set of accounts for Scotland, the region of the UK, I’m content to use GERS as it is. Maybe improvements can and should still be made, but this is true for all statistical publications and the team behind the report do the best they can within their remit.

So what does this year’s publication tell us about Scotland, the region? Continue reading

It’s Beginning To Look A Lot Like GERSmas

A photo of the Scottish countryside. The sky is split between the moon and the night on the left and the sunset on the right.

It’s beginning to look a lot like GERSmas
It’s on the news, you know.
The size of the deficit, is all that matters to it
No deeper in shall the headlines go.

It’s beginning to look a lot like GERSmas
What will the numbers have in store?
To the rest of the UK, we compare ourselves today
It becomes a chore.

If a tax here is tweaked and everyone is freaked
imagine if they tried something more.
To reform all the land, make sure fracking stays banned
tax the rich till they’re sore.
But till we can then GERS we have and here it comes again.

It’s beginning to look a lot like GERSmas
Here, again, we go.
The fight about all the stats, the guesstimates and the facts
Where we stand I doubt we’ll ever know.

It’s beginning to look a lot like GERSmas
For calm, I shall now say.
Why don’t we have a truce, and not let Twitter run a loose
This GERSmas day….

Just this GERS-mas day.

Merry GERSmas everybody.

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We (Still) Need To Talk About: Budget Underspends

“Journalism is what we need to make democracy work.” – Walter Cronkite

It’s that time of year again. Amazingly, despite the looming catastrophe that is Brexit, this week has been one of those “slow news” weeks. Of the kind that manage to get pages out of very minor things like essentially reprinting old stories with the numbers slightly updated.

I am, of course, talking about the perennial “Scottish Government Underspend” story.

A screengrab of the Herald article on the budget underspend. Headline "SNP government budget underspend almost £500 million"

I covered this before back in the early days of this blog (it remains the most read article on here so far – even excluding the annual reposts). Others, like Wings Over Scotland, have covered it pretty much every year since.

Here’s the short version though.

  1. Opponents are complaining that the Scottish Government aren’t spending everything they’ve been given in the Block Grant or raised through taxes and are claiming that the Government are starving services of resources.
  2. This year the “underspend” is “almost £500 million” (actually, the article later says that it’s £453 million).
  3. But the Scottish Budget is pretty much fixed annually.
  4. And the Scottish Government has extremely limited borrowing powers for revenue – £600 million per year, £1.75 million maximum.
  5. If it DID try to use them, you can bet that the same opponents would be raging at the thought of the Scottish Government going into debt.
  6. The solution to avoid debt is to budget conservatively – if you had to set an ice-cream cone budget at the start of the year but your ice-cream purchases varied between 800 and 1,200 cones depending on weather – you’d need to budget for 1,200. If you only bought 800, then you’d have a 400 ice-cream cone underspend.

Without borrowing powers or an independent currency, budget underspends are an inevitable feature of the annual budget.

Though complicating the above point is that until 2006-07, Scottish Executive underspends were, in great part, retained by the UK Government. This was corrected after a negotiation between the UK Government and the then new SNP Scottish Government and the accumulated £1.5 billion was gradually fed into the budgets of the next several years.

An excerpt from an Audit Scotland report detailing the

Since then, underspend money gets carried over to next year’s budget (though, as that budget will have an underspend too it’s a bit of a moot point).

One thing often missed in the “Budget Underspend” headlines is the actual nature of the sum involved. It’s not all cash sitting in the bank. Some of it will be due to underspending due to less-than-projected spending items (like the ice-cream cone budget issue). Some of it will be due to projects coming in underbudget possibly due to good management, possibly due to currency or price fluctuations (if your ice-cream cones cost £1 in January but drop to £0.80 by June, you might underspend even if you still buy 1,200 cones).

But a good chunk of the underspend could be from things like depreciation of assets which can’t be spent on other things at all – even if the asset is sold (The metaphor gets a little strained here, but if your ice-cream cone is worth less as a half-eaten, melted pile than it was when you bought it fresh, it’s not as if you can sell the cone and pocket the difference in price).

Another thing often missing from these headlines is the inevitable revision afterwards – calculating National budgets down to the penny turns out to be quite tricky. If you remember last year’s headline that the government had underspent by £191 million, you probably missed the reporting that that figure was later revised down to only £85 million after final accounting adjustments were made.

Indeed, this year’s figures have ALREADY been revised downwards. Stripping out the non-cash items and money already budgeted for but not yet spent then it only leaves around £66 million to be spent on something else.

But £66 million is still a fair bit of money though isn’t it? Surely, the government could just, you know, budget better?

To answer that question we’d be best to do another thing that doesn’t really come across in reporting if one looks at the situation one headline at a time. Examine the trend.

To that end, I’ve spend a fair bit of time trawling through annual Consolidated Accounts to pull together the underspends from this and previous years. I managed to get back to the accounts for the year 2005-2006 before the trail gets fragmented. Before this point, the Scottish Executive accounts operated in a substantially different way (see the segment on Resource Accounting and Budgeting here). Underspends still happened, but comparing them like-for-like with years after 2004 may not be strictly fair. I also haven’t been able to locate the 2002-03 underspend at all.

As far as I can tell though and if the revision mentioned stands, this year’s underspend may well be the lowest since the start of devolution.

A bar chart of Scottish budget underspends since devolution. There is a clear trend downwards from the 2000-2001 high of £718 million down to the 2017-18 low of £66 million.

And if we compare the underspends to the budget as a whole we begin to see just how small a story this all becomes. The Scottish Government’s devolved budget is on the order of £32 billion. A £66 million underspend is about 0.21% of that budget – or about 18 hours worth of spending across the year.

The underspend bar chart converted to percentages of the total budget. From 4% in 2000-2001 to 0.21% in 2017-18

Even the initial estimate of £453 million was about 1.4% of  the total budget – if it really was all spendable cash, it’d be the equivalent of about five days worth of spending.

This is not to say that the budget underspend won’t become an issue. It was simplier back in the days when the bulk of the Scottish budget came from the block grant and tax powers were both limited and largely unused. Now, with divergent income tax rates and bands and an impossibly complex Fiscal Framework, there is a risk that the devolution settlement gets strained to breaking point. The David Hume institute has described it as an “interesting cocktail” of arrangements.

I don’t know what the future holds for this story. I could see a time, possibly as soon as next year, where the Scottish Government revenue budget slips from “underspend” to “overspend”. I already know what the reaction of the opponents will be if that happens.

I could hope that the media will up its game here and try to explain these issue in more detail than an attention grabbing headline.

Sadly, I can see my 2015 article just being reposted again in 2019.

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We Need To Talk About: The Growth Commission Report

If this is a discussion document – It’s time to start discussing it.

The Growth Commission’s long-awaited report is finally out and will surely take some time to fully digest. It has been described as a discussion document and a starting point for the revitalised case for independence; not the final word on SNP policy or national trajectory.

In many ways, the report covers ground now very familiar to campaigners in the independence debate. We’re all now quite familiar with the deep and systemic flaws of the UK’s economic system especially its regional inequality which, quite frankly, is embarrassing when compared to neighbouring countries in Europe.

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(Source: Eurostat)

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