Ken Gibb's 'Brick by Brick'

Housing, academia, the economy, culture and public policy

Month: August, 2014

Resetting the Rubik’s Cube: Strengthening Local Democracy in Scotland

Last week the main report of the Commission on Strengthening Local Democracy was published.[1] This report delves into the case for root and branch reform of Scottish local governance, local democracy, finance and community participation. It is of the moment in the sense that it follows on from the Christie Commission and the Community Empowerment legislation about to go through the Scottish Parliament.

This is an area of great interest to me. My first serious research was about the poll tax and its potential impact on the housing market. This led to a continuing interest in the arcane world of local government finance. Much more recently I worked with Jim Gallagher on a (still unfinished) project looking at different dimensions of reforming local government [2]. And now I am involved for the next three years in What Works Scotland, which is focused on Community Planning Partnerships and in which local government is a key partner in the analysis of effective public policy [3].

One of the key arguments we developed in our David Hume Institute work was that local government reform and indeed functional local governance has to simultaneously fix three kinds of problem: of geographic scale (how many councils and of what size), the distribution of functions (between local and central government) and finance (how it is all paid for and what proportion is locally-raised). The problem is that fixing one dimension is difficult enough, let alone addressing all three. Hence, the Rubik’s Cube metaphor.

The new report from the Commission is quite high-level , full of plans and intent but relatively short on specific details. it agues for a further commission in the aftermath of the referendum outcome. But it is nonetheless full of interesting and thought-provoking ideas, which do attempt to wrestle with the multi-dimensionality of the different sides of local government.

The objective is to reverse the process the Commission sees of long term de-localisation of local government manifested in larger councils, reduced local control over finance and consequent distancing of key decision-making.

The Commission recommends legislative powers to guarantee a return to local governance strengthening the participative rights of individuals and communities and to sytematically reverse the processes of recent decades. Key recommendations that particularly struck me included:

  1. A bottom up vision embracing deliberative assemblies, participative budgeting and empowered community planning based on legal duties to ensure the community’s role in CPPs.
  2. The precise shape of the newly constituted local democracy and relationship between communities, local governments and the Scottish government should itself be the product of a wide ranging participative and inclusive process.
  3. However, restoring at least 50% of tax revenues locally is deemed essential and would be supported by restoring local control over council tax and business rates but by also adding the new devolved land and building transactions tax to local government. There is a strong commitment to land and property taxation. This principle of increased taxation determined locally is viewed as essential to the accountability and meaningfulness of local democracy. The Commission also suggests limited powers for local government to set new local taxes.
  4. The Commission argues that the European Charter on Self–Governance, focusing on competences of local government and the principle of subsidiarity, should be legally enshrined. The Commission also calls for an independent office of wellbeing to test and monitor the impacts of economic, financial and other social policies on wellbeing (especially in terms of inequalities).
  5. A major investment committed to community learning and development and to setting up a centre for participatory democracy.

Overall, we have a strong call for localising Scottish local government, based around empowering citizens and their communities and by challenging the long term centralized financial settlement. The next stages involve a consultative participative process to take this all forward.

All in all the report raises a number of interesting points.

First, it could be viewed as local government in Scotland (since it is an important voice in the Commission) seeking reforms that will on the one hand reduce the scale and scope of local governments, increase the place and role of the citizen (thereby reducing councilor power), but at the same time offering more control over resources. These will be interesting, indeed challenging checks and balances to achieve in practice .

Second, there are two main attacks on Scottish Government orthodoxy – first of all wishing to reduce their financial control and thereby lessen the gearing effects on council tax but also making a grab for LBTT funds. Ending the council tax freeze is a prerequisite but is quite at odds with Government policy. The faith in property taxation is also against the long term position of the Scottish Government to move to local income taxes. Of course the logic of the Commission includes the possibility of a combination of property and income taxes levied locally.

Third, the approach is quite in tune with the espoused Scottish approach to public policy – of co-production, local assets, partnership and community-level institutions prioritizing policies and engaging fully in policy processes and delivery.

Finally, one thing that is not really addressed in the report is the (unknown) strength of taxpayer resistance to the sorts of things that are being called for. How, in 2014, do businesses feel about ending the principle of the uniform business rate, of granting tax creating powers to local government, to ending the council tax freeze and even I daresay revaluing the tax base as a whole? There is undoubtedly considerable opposition to rational and progressive policy reform ideas regarding local taxation. Moreover, the long shadow of the poll tax makes government remarkably unwilling to tinker with local taxes (as the SNP found out during their minority administration). Even if one was not going to pursue really radical ideas like a land value tax – the powers of conservatism are very strong in this area. Maybe it can be overcome – but it needs to be discussed fully at the very least.

So, lots to think about and one hopes this will be an on-going process that gets sufficient buy-in to allow the debate to grow and strengthen like the local democracy the project wishes to foster.

A final petty point – I really did not like the publishing presentation software that the report is based on. Maybe it was just me but it seemed cumbersome to my untutored abilities.

Notes

  1. http://issuu.com/cosla/docs/final_report_august_2014?e=3578316/8937043

 

  1. http://www.davidhumeinstitute.com/images/stories/publications/HOP/HOP_70_Local_Government.pdf

 

  1. http://whatworksscotland.ac.uk

 

Unaccustomed…..

I know two people who are about to make important public speeches and in their different ways they are concerned to make the right kind of impact and not make mistakes. I do a relatively large amount of lectures, presentations, seminars and the like. It is par for the course for an academic and also if you are explicitly involved in knowledge exchange. I enjoy it when it goes well and I hate it if I don’t think or know that it hasn’t.

When I became a Faculty lecturer I realised that this was going to be a significant part of my working life and I had better work out some mechanisms and supports to help me overcome any problems speaking in public. I did some lecturer and media training, read some good books (e.g. Max Atkinson’s Lend Me Your Ears) and got on with it.

Actually, I did bit more than that. Periodically through my life I have had a stammer. For those who have a speech impediment there is no need to explain further but for those who don’t, they typically fall into two categories: those that are inherently physical and those are essentially in the mind. My form of problem – being unable to complete certain words and instead freezing on them – was it turned out something going on inside of me and not caused physiologically. When I started full time lecturing it was pretty obvious that I was struggling in certain classes, as I was also when speaking at some conferences and on other platforms. So, for the third time in my life I went to speech therapy.

What I found out from simply talking through the underlying causes of the problem was that, first, I needed to prepare properly and focus on things I was comfortable talking about (lecturers can find themselves in front of classes well outside their comfort zone). I used to worry about being asked questions I could not answer and that pushed the probability of stammering into near certainty. Second, I realised that I was not contributing to meetings, avoiding chairing and making up reasons not to make points – because of the risk I might stumble or stammer.

Third, I thought more about the things I knew already about my own problem. For instance, and somewhat bizarrely, certain individuals made me stammer (and there are not necessarily folk in positions of power). Equally strangely, I know before the fact when I am going to stammer – I can see the problem word lying ahead of me as I construct the sentence I am speaking. This makes me try to avoid the word or find a synonym. The problem is you can’t simultaneously provide a coherent smoothly deployed argument to the external world while internally trying to think of a non-stammering way to do it. Instead you blow up. The fact that a potential stammering episode lurks under the surface also makes you incredibly self-conscious and also very aware of how others speak and communicate.

Now this may all sound terrible but I think, now, that working one’s way through it reflectively, reading about speaking techniques and watching good speakers all helped. To an extent it is a phase that I have now, happily, largely passed through. Today I still sometimes stammer giving a paper or teaching but I am no longer that worried about it. I know if I prepare properly, try to add value in some way compared to the normal ‘talk to powerpoint’ mode, and just get a bit of perspective – it is not that big a deal and audiences are not generally out to get you.

Like blogging, you need to find your own voice. I would probably like to be more consistent but it is no longer a chore. Instead it is usually quite a bit of fun (for something that can be very important). Recently I have given evidence to Parliamentary Committees and done live tv and radio. This kind of public speaking is ok and I find I can thus far cope with it. This is so because I think I know what I am talking about, I know that I have survived doing media work before and I will have done my homework. As a result, I have really not been that nervous or unable to function as once would have definitely been the case. I even quite like to play what BBC presenters call ‘that’s a good question bingo’ and actually engage in proper Q&A and be quite relaxed if I don’t have a pat answer.

As I am a big fan of lists, here are a few thoughts about public speaking as a result of these experiences.

  • I rather self-consciously try to be humorous as a rhetorical device. I have two notebooks full of quotes and jokes. Just yesterday in a traffic jam I found myself scribbling down two great quotes from James Joyce heard on the radio. The big problem is not telling the same audience one of your favourite stories for a second time. You also need to go easy on these things, judge what is appropriate and make sure that it is the argument that they are listening to not for the next joke. And of course what I think is funny may not not be to who are listening. Know your audience.
  • I try to mix up my audio-visuals, including alternatives to powerpoint like prezi.
  • Some people I have heard speak effectively and remain in the memory work with a very straight but impressively clear presentation style. This can work just as well if you can be disciplined. This is what my colleague Jack Parr calls the ‘John Wayne’ style – you come into town, get off your horse, tell it straight, get back on your horse and leave town.
  • Narrative and logical progression are incredibly important. Also, Max Atkinson argues that you need to speak steadily and at a level of argument slightly below what you are comfortable with – audiences don’t necessarily follow at your pace so try to marginally simplify but don’t ever patronise.
  • Try really hard to prepare, speak and plan for the timed allocation you have to speak for. If that also means extemporising to finish on time, do that and even have a plan B (to coin a phrase). Try not to skip slides or race back and forward in your powerpoint.
  • Finally, if despite your plans and efforts, the worst things happen, you can’t answer a question [tell them you’ll get back to them and do so], technology fails [have a paper back up] or your paper simply does not work as a presentation and you confront a sea of baffled faces [rehearse it and test it with others informally especially if it is a new idea or application]. If all else fails, don’t worry and be happy. Tony O’Sullivan used to present the Scottish House Condition Survey publication at an event with teeming hundreds in front of him. I asked him how he kept so calm and normal. He argued that you have to recognise that there are much more important things going on in the world than your ability to speak through nerves – get a bit of perspective, man.

In the end I am a bit longer in the tooth now, fairly relaxed about public speaking and usually up for the challenge. I hope I have a bit of that perspective these days but at the same time I know I have to put the time and thought into each presentation and actually try to get something out of it that feels creative to me.

Good luck.

Welfare Reform Yin & Yang

I want to talk briefly about two contrasting stories from the continuing wacky world of welfare reform. One potentially positive intervention by DWP and also a second story providing evidence from the House of Commons about the growth of workers in receipt of Housing Benefit.

DWP have been in Scotland in listening mode in order to find about what Scottish housing associations do. The story in yesterday’s SFHA e-newsletter tells us that Dunedin Canmore HA met with DWP and Job Centre Plus staff. The key point is that there seems to be genuine consideration that housing associations might play a data-sharing role and also be a ‘trusted verifier’ to identify those vulnerable tenants who need to make alternative arrangements for payment when they go on to Universal Credit. The meeting seemed to positively reflect the need for deeper collaboration at both a strategic and an operational level – and to begin to think seriously about at least one of the difficult consequences of Universal Credit (UC).

This makes sense but needs itself to roll out to the social housing sector as a whole. While it is obviously important not to pass on cost to the sector, there is a shared interest in making the system work and doing the upmost to protect the vulnerable (assuming that term can be defined satisfactorily and consistently). Perhaps the most positive thing in the piece is the sense that DWP actually want to hear from and learn from housing association practice and thinking in Scotland.

On the other hand, as reported yesterday in Inside Housing, House of Commons statistics suggest that, currently, 962,000 housing benefit claimants have a job and that this is up from less than half a million (478,000) in 2009-10. Just have a think about that numerical change. The recovery of the economy and the jobs increases we hear so much about has allowed working poor people reliant on means-tested benefit to double in size. Stagnant or falling real earnings at the lower end of the income distribution, benefit cuts and increased reliance on (higher rent) private renting have combined to create this picture.

We seem to have moved from a policy position that benefit dependence required cuts and sharper incentives to get people into work to a situation, increasingly, where the low wage economy is dependent on benefits to be competitive. This also suggests that for where it really matters, the minimum wage is often insufficient. Many have talked about the existing (pre UC) structure of Housing Benefit creating a form of moral hazard for social landlords and for lenders by de facto guaranteeing rental payments for recipients. Is there now a new moral hazard for low wage employers?

Don’t get me wrong: one of the great advantages of HB is that it is an in-work as well as an out of work benefit – but it is fundamentally a low income benefit and something is not right if the numbers are growing on this scale – although of course we do not know what the levels of HB payments are that working recipients are receiving (it clearly is less on partial benefit).

The welfare reforms were premised on simplifying the system, cutting cost and increasing incentives. Everyone reading this will be well aware of the difficulties the project has faced (some of it self-inflicted). We discussed the lack of evidence and unwarranted assumptions in a previous post. However, it is clear now that the moving parts that shape the effectiveness of such complex reform should include local labour market conditions, competitiveness and behavioural assumptions regarding decisions on both sides of the employment bargain. It is not just about individual housing decisions and benefit tapers.

What this also says to me is that we need much more evidence and knowledge about the duration of in work housing benefit, how it relates to actual wages and rents, as well as a clearer picture about the conditions of supply and demand and the degree of competition in the low wage sectors affected. It may be my ignorance of contemporary labour market research but I am not aware of research that is explicitly bringing these elements together to understand individual and employer decisions. There is of course growing interest in insecure working and zero hours contracts but I don’t know how far this goes into interactions with welfare benefits. Something worth exploring further.

 

Can we build a better Scotland?

I was at the launch of ‘Building a Better Scotland’, the RICS Scottish Housing Commission report yesterday morning [1]. I should declare an interest: I am an advisor to Shelter Scotland’s parallel housing and well-being commission which reports next year [2]; I also gave evidence to the Commission last year when they kindly did the evidence session only walking distance from my front door.

The context for this renaissance in more strategic (and politically independent) policy thinking about housing in Scotland is multi-faceted. First, despite the devolution of key aspects of housing, the Referendum, as elsewhere, casts its shadow across housing questions and possible future directions, including of course welfare benefits. Second, austerity and funding pressure have recast what is possible in terms of housing investment and of course specific policies aimed at the market like Help to Buy have further shifted the scope for partnerships for affordable housing. Third, and not unconnected to the first two points, the Scottish Government since 2007 has espoused a separate policy direction one in tune with its Scottish approach to public policy, even if key indicators like social house building remain weak considered in a longer historical perspective.

What is the main diagnosis? Chapter 1 of the report argues that Scotland faces deteriorating housing outcomes, including:

  • Requiring more than 20 years (best case scenario) to build enough new homes to match projected increases in household formation.
  • High cost to income ratios historically for both private tenants and younger home owners.
  • The numbers in housing need and applying for social housing is rising sharply, ‘whilst social housing output has fallen in the midst of static vacancy turnover (p.9)’.
  • More are renting in the difficult segments of the rental market. 120,000 households in poverty rent privately.
  • The physical improvement of social housing and neighbourhood renewal is stalling .
  • In those area where the Scottish economy is recovering large real terms house price increases are once again evident.

After the evidence was heard and deliberated over, by the Commission, what were its main recommendations? There were 15 in total:

  1. Establish a Scottish housing observatory.
  2. The Scottish Parliament should debate an annual state of the housing market report.
  3. The post of housing minister should be elevated to that of cabinet secretary.
  4. There should be a new and continuing assessment of key housing indicators.
  5. The Scottish Government should continue to explore new methods of supporting the housing market to sustain demand.
  6. The private rented sector should be a key pillar of the future housing system in Scotland.
  7. The Scottish Government should shape a skills programme for planning.
  8. The Scottish planning system should deliver at least a 100% increase in effective land supply for development by 2018 and all local authorities should be able to demonstrate a 10 year effective land supply as standard.
  9. The SG along with planning authorities should undertake a review assessing the nature of existing planning consents.
  10. The SG should develop a new emphasis on consumer research to inform a local housing systems analysis approach to assessing housing needs and demand in Scotland.
  11. The SG should establish a Scottish Land Delivery Agency.
  12. The SG should endorse effective provision in growing areas by enabling the delivery of 6 to 8 major new communities.
  13. They call for a reduction in VAT to 5% on refurbishment and maintenance building works.
  14. The SG should put in place a ‘change fund’ for the social housing sector.
  15. The Scottish Housing Regulator should take a greater role in stimulating system performance knowledge and change in Scotland.

What are my immediate reflections without getting into the details of all the proposals? First, the supply-side policies are probably the most compelling aspects of the package: the national land delivery agency, the effective land supply targets and the 6 to 8 new planned communities. Some commentators have queried these policies on the grounds that there is plenty of brownfield in-fill sites remaining that can raise urban densities, that expanding effective land supply only works if there is effective demand and that the national agency (along with other proposals in the recommendations) require the creation of new institutions which makes the wider project a little vulnerable.

I am not convinced by the arguments against the new communities – the opportunity to master plan and to learn from the past and for England outweighs the negatives. Of course we should use brownfield and raise densities provided it makes sense but the opportunities afforded by new communities, assuming they are credible, do make sense to me – but they will take a long time to come to fruition. Equally, there is a groundswell for a national land delivery agency from several quarters in Scotland and lessons to learn from English Partnerships. However, I do have sympathy with the notion that setting up too many institutions at the one time – that there too many moving parts – which might impede implementation. It has to be done right and that again that might take time.

I do worry about our declining smaller urban settlements in places like Ayrshire, Lanarkshire and Fife. This is all the more reason to focus more on evidence and what works, to draw on housing system analysis locally feeding into housing strategies and drawing on the ideas contained in the observatory proposal (it would have been surprising if I had not supported this proposal). A much better sense of demand and why households make the decisions they do remains too little understood. A sector wide commitment to intelligence, knowledge exchange, monitoring and appropriate frameworks for evidence supporting needs analysis, investment decision making and land release – would be game-changing.

The social housing change fund is an attempt to set up new partnerships to promote innovation not just in funding but also in terms of organisational form and governance. It is a little high level and abstract in the report and it would have been valuable to be able to more closely examine this specific proposal. Otherwise there is surprisingly little discussion of finance and subsidy (and especially housing benefit). There is a proposal to cut VAT on refurbishment and maintenance to 5%. While I obviously support incentives to the greater investment in the existing stock, I do not really believe in varying tax rates and monkeying further with the tax base – I would rather all activities faced the same VAT rate (in the absence of strong economic argument to the contrary).

The Commission has produced a useful, coherent and timely contribution to the debate. There are lots of ideas here, if sometimes too briefly considered. The recommendations challenge governance and policy making both at the local and national level. For instance, the issue of allowing housing to sit at the top table in resource and strategic discussions may be more of an issue at local government and community planning partnership levels than in the Scottish Government?   How the Commission now takes the report on and engages with its constituents will be essential to determining whether it can succeed, promote action, reinforce new thinking and secure change.

Notes

  1. http://www.rics.org/uk/about-rics/what-we-do/influencing-policy/influencing-activity/thought-leadership-papers/the-rics-scottish-housing-commission-report-building-a-better-scotland/
  1. http://housingandwellbeing.org