We Need To Talk About: GERS (2021-22 Edition)

“They were learning fast, or at least collecting data, which they considered to be the same as learning.” – Terry Pratchett

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

You can also read my previous work on GERS on this blog behind the following links: 2013-142014-152015-162016-172017-182018-19, 2019-20 and 2020-21.

Welcome to the second year of the Covid Discontinuity. As I noted last year, we’re in the middle of the worst possible thing that can happen to a statistician – a major event that throws out all of the carefully plotted trends and predictions. Last year I also used the phrase dreaded of every economic seer or scryer – “If things go back to normal next year…”

Well, they didn’t. Covid continued despite the best efforts of politicians in Scotland and the UK to ignore it, Brexit bit harder, the economic turmoil blamed on the escalating war in Ukraine caused a major fuel crisis that threatens to harm millions in the UK, inflation and interest rate spikes combined with continued wage repression raise the very real threat of a second Winter of Discontent and around Europe and the UK will be hosting Eurovision despite only coming second place.

In purely budgetary terms, this year’s GERS report suggests that Scotland’s finances do seem to be improving somewhat as the Covid support money slows down or stops completely (Don’t look at the ongoing pandemic, lost work and productivity due to illness or future increased health spending though…also don’t look at the massive looming catastrophe as cuts to social care are causing the NHS in England to grind to a halt and may be responsible for around 500 deaths a week in England alone…). The notional Scottish “deficit” is £23.7 billion – still higher than the pre-Covid trend of around £15 billion but down from last year’s exceptional £36.5 billion.

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It’s GERSmas!!

With apologies to Slade!

image_2022-08-23_084249297

Are you drawing up your spreadsheet on the wall?
The Economist is gazing into his ball.
Does he predict recession?
Or a sunlit upland session?
Do the numbers keep him blootered for the day?

So here it is, Merry GERSmas.
Nobody is having fun.
Look to the future now.
Try to see what is to come.

Are you waiting for the trendlines to all rise?
Are you sure that your assumptions are the right size?
Does the media always tell ya,
That your plans are just the worst?
When you fix them then their headlines just reversed.

So here it is, Merry GERSmas.
Nobody is having fun.
Look to the future now.
Try to see what is to come.

What will your budget do when it sees your taxes going to London-town?
A-ha

Are you balancing tax in with spending sprawl?
Are you hoping that deficits will start to fall?
Will you tax that grouse moor hillside
With the land reforms you’ve made?
Or subsidise the sector?
(you’ve bin played)

So here it is, Merry GERSmas
Nobody is having fun.
Look to the future now.
Try to see what is to come.
So here it is, Merry GERSmas
Nobody is having fun.
Look to the future now.
Try to see what is to come.
So here it is, Merry GERSmas
Nobody is having fun.
(It’s GERSmas!!!)
Look to the future now.
Try to see what is to come.


See my previous GERSmas Carols here.
2017
2018
2019
2020

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A Financial Flatspin

“Someone is sitting in the shade today because someone planted a tree a long time ago.” – Warren Buffett

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

An extremely disturbing report was published this week looking into life expectancy in Scotland and the UK. It found that the consistent gains in life expectancy that we have experienced for much of the 20th century and into the first decade of the 21st has stalled and has even started to decline for some groups – especially the poorest and most deprived. This stall was abrupt and started in 2012 and has had the effect of knocking around 16 months of life off of the average Scot compared to pre-2012 trends.

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(Image Source: GCPH)

 This was not due to a “natural limit” of life expectancy being reached (though such a limit does almost certainly exist) nor have neighbouring countries experienced this stall to anywhere the same degree. The stall is not due to Covid, nor any other endemic illness. Drug-related deaths in Scotland are rising and this is having a measurable impact on average life expectancy but life expectancy has also stalled for non-drug users so this cannot explain everything either. Nor is it due to obesity or even due to climate change (though the former had more of an impact than the latter). All of these factors and more could be isolated, accounted for and controlled for in the study. Once this was done, there remained still an additional adverse impact on our life expectancy.

The conclusion of the report is that there is one stark cause above all of the other factors that has resulted in our lives being, on average, shorter than they otherwise would have been. In 2010 the UK Government began a massive socio-economic experiment called Austerity. This, the report finds, has been the primary cause above all others for the harm done to our health and wellbeing. It has sucked vital resources out of public services and starved households of the resources required to replace them. Poverty and deprivation – deliberately applied by political choice – has killed people earlier than they otherwise would have died.

It is in this context that we must view the other major reports published this week – the Scottish Government’s Resource Spending Review and Capital Spending Review. These financial reviews lay out the plans for devolved government spending over the next four or five years up till the end of this Parliament. The choices being made are grim.

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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