Focusing on the council tax freeze ignores the need for wider reform

Before we pick apart some of Professor Midwinter’s arguments set out in today’s Scotland on Sunday, first let’s welcome the debate.

It is rare that we have serious – or at least semi-serious – debates about policy in the public domain and this one is a biggy.  While it is framed around the need to consider the affordability of public services and provision in the current landscape of cuts to the Scottish block grant, at its heart is a more fundamental matter.  Should we strive for universal provision or target funding at those who need it most?

In truth, it is the kind of policy area that whets the whistle of Labour much more than the SNP, which has far less of a social policy tradition in its DNA.  Indeed, the party’s approach to policy formulation in this area has always been of less interest to the big brains of the party whose boat is floated by economic stuff.  The party is great at the vision thing on the kind of Scotland we want to be, advocating a distinctly left of centre, socially progressive hue.  Words like fair and common weal and social wage pepper speeches but what is lacking is the intense policymaking and dialogue within party structures to work out what that actually requires a nation to do.

Hence, the attraction of universalism or as some have dismissed it, retail politics. There’s an element of truth in this – why would a party which has successfully campaigned its way into majority government on the back of universal policies tear those up?  Whether the SNP and the Scottish Government is in fact examining the affordability of any of its so-called “free” policies and working out different ways of tailoring the offering is a moot point:  it doesn’t have to, when Labour is doing the heavy lifting for it.  Labour might just find itself advocating, for example, raising qualification for a free bus pass to 65 – as Midwinter suggests – and the SNP deciding to accept the shift reluctantly in public and with some glee in private.

But a point of placement. Let’s not forget that Labour started the craze for universal and free stuff.  Free personal care, free bus travel, free heating systems for older people – all of these were introduced by a Labour-led administration when money was no object. In fact, I recall that Labour-Lib Dem executive resisting attempts to widen energy efficiency measures to the poorest families with young children because the money was needed for rich pensioners to get new heating systems.  And indeed, at Westminster, somewhat bizarrely it was Labour and the left which led the charge against cutting off child benefit for the most wealthy on the basis that it overturned the principle of universality in one of the last benefits to offer it.

So, having welcomed the debate which Labour is having with itself and bringing to our attention, let’s get on with cutting through some of Professor Midwinter’s crap.

Firstly, the charge on the Scottish Government that it has dismantled anti-poverty spending to the tune of £1 billion. To arrive at this figure, Midwinter selects policy and spending programmes which he considers to be anti-poverty and of course, ignores others. But he is right:  the Community Regeneration, Supporting People’s and Fairer Scotland Funds were handed over to local authorities and community planning partnerships to spend. But if they decided not to spend them on tackling poverty, they are to blame for the loss, not the Scottish Government.

And this actually points at a bigger issue. Unlike Labour which ring-fenced every new pot of money for every centrally announced and planned initiative – to the tune of nearly a billion pounds by their end days – the SNP trusted local government when it said it should be freed up from central constraint to deliver “local solutions to local needs”.  If those same local authorities have over the last six years made spending decisions which mean those funds haven’t been targeted at their original purpose, then maybe we need to shine a critical light there.  And work out how to fix that.

Indeed, it would be interesting to know just what councils have spent the money on.  They should be required to justify this, rather than wrongly blaming the Scottish Government for trusting councils to do as they said they would.  And that might well lead to a much broader discourse about whether local authorities as currently structured and populated are fit for purpose.

Secondly, the criticism against free prescriptions policy is unjust – and somewhat disingenuous, given that Labour was at pains to remind the voters of Dunfermline that they supported its introduction. For every well-off person who benefits when they occasionally need a pill or lotion, there are far poorer people who are reliant on whole streams of medication to manage their conditions who used to have to pay out significant parts of largely limited incomes on doing so.

Nicola Sturgeon’s objective on becoming Health Secretary in 2007 was always to introduce free prescriptions for those who need it most – the rules on who qualified had emerged in haphazard fashion so that some people with long term health conditions and disabilities got and some didn’t. But analysis suggested that expanding the qualifying criteria and the means test would actually cost more to administer than actually making all prescriptions free. Professor Midwinter ignores this context completely.

If the bill for free prescriptions is rising, then that is bound to be linked to our ageing population and sick man of Europe tag – entirely separate issues which need different policy solutions.  Keeping people healthier longer ie preventative activity, is actually a keystone for Scottish Government health policy, and more of it is required. Investing in this will bring the overall prescription bill down in the long term.

Finally, there’s the council tax freeze. There is no quibble here that given its longevity, it has meant a substantial saving for better off households and that even proportionately, those on the lowest bandings are not saving as much from the policy as others do.  But it is unhelpful only to quote the savings at the top and the bottom:  I’d imagine UK Labour, given its focus on the “squeezed middle”, would be just as interested in the savings applying for Bands C to E housing where these “hard pressed families” are likely to be living.

And even if they are still not saving as much of their income as those in these highest bandings, the wider picture of who is bearing the brunt of UK cuts and austerity measures needs to be factored in. As the Institute for Fiscal Studies has been telling us since 2010, that’s these same “hard pressed families”. Take away the council tax freeze and that would no doubt tip some of these families – with children – over the precipice. What are the wider consequences of this for other public services like housing, social work, health and education?  This kind of modelling has to be done before arriving at the conclusion that the council tax freeze is inherently unfair and now a massive problem.

Looking simply at local authorities’ needs, ‘m afraid I’m not getting how allowing them to raise council tax will add significantly to their spending power. £70 million is the total estimate for a 3% increase at Band D levels across the whole of Scotland, yet the total local government allocation last year was just over £10 billion.  We are talking pennies here in budgetary terms, yet the increasingly shrill calls from some councils to be freed to use their tax powers give the impression that we are talking serious money.  We’re not.  And say, councils are allowed to raise tax and they all choose to do so by say, 3%. It’s a universal, flat rate increase paid by folk in the wee houses as much as the big ones.  Who does such a raise hurt the most?

Moreover, what impact would any council tax rise have on council tax benefit requirements?  Would more people become eligible for benefit? How would that be paid for? Is Scottish Labour remembering that the monies for that pot are now devolved and were only kept at last year’s levels because the Scottish Government reinstated the UK Government’s 10% cut? It is to be hoped that Professor Midwinter’s analysis of the situation is rather more detailed than the simplistic statements in this article suggest.

There is no doubt that the parties are effectively dancing around the pinhead of the council tax freeze to avoid the bigger issue of local tax reform. The SNP parked its commitment on local income tax a long time ago;  no one except the Scottish Greens has investigated the plausibility of a land value tax;  and Scottish Labour appears to have shelved its 2007 manifesto commitment to add new bands to the top of the council tax structure.

Yet, working out how local authorities can be made more accountable for their spending decisions by allowing them to raise more of their own income is a key part surely of this debate.  Professor Midwinter is right – fiscal realism is necessary but we won’t get it if no party is prepared to consider how we create a more sustainable funding base for all public services, including local ones.  Targeting universal and supposedly free services to justify a shift towards means-testing might provide some short-term political answers for Scottish Labour, but it won’t provide effective policy solutions in the long-term.

The SNP Government has a record to be proud of

Not the burdz  words, but those of the First Minister, Alex Salmond, in his closing speech to the SNP’s Spring Conference.  Largely, I’d agree. 

For a minority government, it has achieved a lot.  I might disagree with some of the focus, and in particular, the obsession with inputs and outputs, when everything was supposed to be about the outcomes.  But it is a solid record of delivery, even if some of the headline policies from the manifesto didn’t make it.

What would I count as the SNP Government’s finest achievements?

The building of 24,000 affordable homes, including 3,300 new council houses deserves huge plaudits.  Not all of these are available for rent – some are for purchase, and others will be a mix of rent and stepped purchase – but combined with reforms to the right to buy scheme, this initiative has ensured that many people on lower incomes will have access to new and decent homes.  Moreover, it has helped mitigate some of the pressures on the construction industry:  the job losses in this sector have still been significant due to the economic downturn, but they could have been much worse.  A generation of new affordable homes is a fine legacy for a first term government to bequeath Scotland.

It probably wouldn’t set the heather alight but reform of the Children’s Hearing system provided an important refresh to one of Scotland’s landmark legislative frameworks.  Established in 1968, the children’s hearing system is a unique way of addressing the problems and issues that blight children’s lives.  It addresses the deeds – and often, the misdeeds – of children and young people by considering their needs.  It acknowledges that children get into bother for a reason, that with the right support their behaviour can be changed and that as a society, we owe it to our most vulnerable children and young people to look after them.  Rather than leaving it all to the professionals, children’s hearings involve trained volunteers, people from a wide range of backgrounds and communities, who co-ordinate and determine how the state responds to and provides for children who have been abused and neglected, whose childhoods have been blighted by violence and trauma.  It is viewed with envy across the world but it was ripe for review. 

The changes to the system introduced by the SNP Government ensure that the system is fit for the 21st Century and most importantly of all, make the system much more child-centred, with children having rights to be heard and listened to throughout the hearing process.  There will be better support for panel members and new duties on public agencies to provide the support children need.   If the improvements lead to better life chances for those children written off far too early, then that will be one mighty outcome.

Amongt the long list of promises delivered on health, I’d pick two:  one big, one small, but both resulting in considerable gains for some of the poorest in our society.  We know that ill health and poverty go hand in hand so any universal benefit will benefit the poorest and those with greatest ill-health most.  Previously, the rules on who qualified for exemptions in prescription payments were byzantine.  Many people with long term health conditions who required big cocktails of regular medication had to pay, either because their condition was not covered or because they received the “wrong” benefit.  The gradual reduction and impending disappearance of prescription charges will benefit those with the greatest need and the least ability to pay the most. 

Similarly, for years, the insidious practice of the NHS – where were their ethos and values then? – charging exorbitant fees for patients and visitors to park and use its “facilities” amounted to little more than a tax by the healthy and wealthy on the ill and the poor.  I can recall a round table discussion hosted by the Scottish Parliament’s health committee on this issue and being astounded at the attitudes of well paid NHS finance chiefs.  Apparently, folk could get the bus, conveniently forgetting that many hospitals are miles from people’s homes and that many travelling to and from appointments were too ill for long, bumpy journeys in cold, draughty vehicles.  They were utterly oblivious to the immorality of making money out of ill people, worried relatives and those with little spare income.  This might be a relatively small measure in the scheme of things but it has made such a difference to people suffering cancer, parents keeping a vigil beside their baby in the special care unit, families visiting a dying grandparent and disabled people attending yet another specialist appointment.

Finally, and I agonised over this one, for my instincts were to go for another social policy one, but it has to be the climate change legislation.  It catapulted Scotland to leading status on this issue, ensuring that other countries will follow.  How good is that?  If we succeed at reducing our greenhouse gas emissions by 42% by the end of the decade, together with all the investment in renewable energy, then we can definitely claim to be doing our bit to tackle climate change.  Not bad for a wee country.

Why these ones?  Because they are largely dear to my heart, but mainly because they contribute to better outcomes.  In the burdz humble opinion, these five punch way above their weight in terms of contributing to a fairer, greener, wealthier and healthier Scotland.  Their impact will be long lasting and tangible.

And therein is a lesson:  it isn’t always the shiniest flag ships that deliver the longest term gains.