Ken Gibb's 'Brick by Brick'

Housing, academia, the economy, culture and public policy

Category: What works

Good for the Gander? Reflections on the 2017 Housing Studies Association Conference

goose 1 is a goose that for three days strongly defended its space on the main way into the conference on the York Campus at Heslington. It appeared to be protecting its partner and made the odd aggressive shift in direction if any delegate came too near its mate in the undergrowth. I am no David Attenborough but it reminded me of years jogging round Strathclyde Park and carefully avoiding the personal space of gangs of Canadian geese or the attention of fairly abrasive Lanarkshire swans.

The conference this year was themed around precariousness and financialisation and how the housing sector is becoming more unequal, insecure and unstable. Plenary speakers included Oliver Wainwright from the Guardian, Shelagh Grant, CEO of the Housing Forum, Dinah Roake ex of HCA , Paul Quinn from Clarion Housing Group and Bob Colenutt from Oxford Brookes. The final plenary involved David Madden from the LSE and Blase Lambert, CEO of the Confederation of Co-operative housing. The conference dinner also included a memorable talk by the ineffable Ian Cole.

Financialisation and the precariat are well-met topics and they worked well with many of the workshop papers and for once a conference theme seemed to retain purchase across the full event. Not that everyone agreed of course with very different views circulating and also some concern that perspectives were a little too metropolitan and London-focused (something conceded by David Madden co-author of In Defense of Housing). There were also debates about the proactive role of the state in facilitating speculative mega real estate projects and a degree of vagueness about the transmission mechanism that might export people out of unaffordable, overcrowded cities. A key theme throughout was what can be done about these processes – do we despair or are there ways to fight back? There was talk (Madden again) about housing movements but I quite liked Glen Bramley’s discussion point that in fact an important (albeit atomised) housing movement are those older equity-rich often suburban home owners (and sometimes BTL investors) who are such a break on progress with respect to increasing housing supply.

I heard some interesting conceptual papers by David Clapham, Keith Jacobs and Tony Manzi, as well as a good paper using Australian evidence on private landlords from Hal Pawson. Duncan Bowie reprised debates about housing tax reform. I did a paper (co-authored with Duncan Maclennan) on Brexit and housing, the fundamental premise of which can be summarised by we don’t know the rules of the game regarding the rapidly approaching negotiations so we cannot really scale or estimate the impacts. Many economists feel they will be negative depending on the scenarios for how Brexit plays out, but we cannot in turn say much specific about housing impacts other than some likely directions of broad consequences via lost trade and growth, out-migration, risks re European funds and EIB, but much more fundamentally, risks to housing policy arising from possible break-up of the UK itself as a consequence of leaving the EU. More to follow on this I am sure.

The conference has a nice informal and friendly feel to it. This was complemented unexpectedly in a city centre bar by a very impressive four piece jazz band playing standards via an excellent trumpeter. Well done to the organising committee. Roll on 2018.

I missed a fair bit of the conference, in part because unexpectedly, the ESRC decided bring forward  the announcement of the UK housing evidence centre which made Thursday a bit of a social media blur but it is great to finally have it in the public domain.  More on that subject in a later blog.

‘The geese are flying westward’ is a fine song by Bill Fay (check it out) – but I am now heading north on the east coast line, eventually back to base for what I hope will be a quiet weekend.

 

 

 

 

Prevention and Predictive Analytics

 

I was at a What Works Scotland seminar this morning, the latest in our joint events with NHS Health Scotland on the Economics of Prevention. Papers and slides and a summary of discussion groups will be posted at the WWS website. We heard papers from Heather McCauley on the use of predictive analytics in New Zealand, on modelling the burden of disease by Diane Stockton and using agent-based models to consider informal care and obesity by Eric Silverman. They were followed by Ian Marr who summed up, drawing on his first-hand knowledge of social impact bonds and the social impact partnership model he has been developing.

A key aspect of preventative thinking, from Derek Wanless to Campbell Christie and beyond, is the issue of understanding where the most public service spending goes and therefore targeting spending, as far as one can, to those people and needs that will otherwise generate disproportionate public cost e.g. early year intervention to prevent what would otherwise lead to, in high likelihood,  negative future outcomes such as less good education and employment outcomes, poorer health and or episodes involving the justice system. A key issue is also how to manage the disinvestment that goes with a shift to prevention.

While it was fascinating to hear Eric Silverman tall about these simulation model as safe playgrounds of policy experimentation without consequences (unlike piloting, for instance), I want to talk  primarily about Heather’s exposition of preventative predictive analytics in New Zealand. She told us about the evolution of the programme, how it works and provided detail in terms of policy spheres such as welfare benefits and children in care.

The three big lessons and challenges that arose for me were as follows:

  • Moving government to think and act in terms of the lifetime costs (on an actuarial basis) rather than the annual cash costs of a high need individual, household or client;
  • Using statistical/econometric methods to uncover the probabilities that signify the high need households and individuals – the diagnosis of where lifetime costs are very high and therefore where large potential savings can be made; and
  • Designing the optimal mix of practice and policies that allow case managers to maximise the effectiveness of intensive interventions (what works?).

All three are difficult – the third, perhaps the most challenging. Let’s look at each in a little more detail.

Heather described the need for culture change to take on the lifetime cost approach. She pointed out that New Zealand has a culture of seeking the best possible value for the public dollar and so the shift from short term to a longer, multi-parliamentary term perspective, can be made and perhaps done so more readily than in the UK or Scotland. Many of us might be comfortable with the idea of focusing on the lifetime savings made by preventing someone falling into the negative outcomes suggested above – but it does require current governments spending money now and postponing benefits to future governments.  Heather provided the example of using a helicopter to transfer a spinal injuries patient from an accident site immediately to hospital with potential long term savings in reduced future health care costs. Lifetime benefits considerably outweigh upfront (helicopter usage) costs.

Second, the New Zealand benefit figures suggest that much of their employability spend goes to job seekers who are a small proportion of the total client group compared to the higher and persistent incidence of for example those on disability benefits and lone parent benefits. They cost more in lifetime terms and represent longer term need. Modelling under certain conditions offers, to different degrees in different policy areas, a reasonable basis to diagnose where highest need is concentrated and where benefits might be maximised by effective targeted interventions. But as was stressed in the presentation, these models produce probabilities and associations; they are not causal and indeed there is a fascinating question about understanding why some highly at risk groups remain resiliently unaffected in future years – what can we learn from their resilience?

Heather rightly recognises the suspicions and criticisms open to these sorts of approaches (often relating to big data and predictive algorithms): bias, non-discretionary model creating discriminatory or arbitrary outcomes, perverse incentives, moral hazard and discrimination like cream-skimming of the cheapest easiest candidates in areas like the work programme.  Transparent models (all on line from the New Zealand government) and independent scrutiny of the models, their assumptions and how they work ‘under the hood’, is essential, as is always seeking to improve the model and to reduce negative aspects of models.

Finally, there is the classic what works question – assuming that the modelling has indicated who and where the highest need target group resides, what are the suite of policy tools and interventions that best reduce the lifetime cost and make those savings because negative future outcomes are significantly reduced? How do we assemble good practice, policies, and effective case management in the variety of policy areas likely to be developed? A sector by sector repository and on-going discussion about these tailored responses is essential.

Predictive analytics has well founded criticisms but as in so many areas, this is one where continued independent scrutiny, a commitment to transparency and a willingness to continuously improve modelling, can provide valuable prevention benefits but there I can be no guarantee that this will be so. Furthermore, there is the small question of then designing the appropriate mix of policy responses aimed at those in most need

 

Returning to the Start: Housing and Public Health

 

Housing intervention by the state started with public health challenges. Public health approaches today have much to say about the structural determinants of health inequality, spatial inequities and connections to key sites and drivers of these inequalities. Housing is of course centrally implicated both in terms of physical and mental health, but also in relation to the broader wellbeing of individuals, families and communities. Housing conditions, fuel poverty, unaffordability, all manners of indicators of unmet need are relevant.

The Scottish Public Health Network have just published a new report: Foundations for Well-being: reconnecting public health and housing. A Practical guide to Improving health and reducing inequalities (lead author Emily Tweed). It sets out to be a ‘best practice resource’ to guide the Scottish housing and public health sectors to improve health and reduce inequalities through good housing. It is well worth a look.

The report is a primer that sets out the context facing the different professional communities, provides useful links to data and policy resources and provides recommendations for good practice and development for both. The big health themes touched on by housing include well-being, ageing, inequality and poverty, health and care integration, community empowerment and climate change. What is helpful as an educational and professional resource is that the report provides a basic grounding or primer for either group, sets out a long list of statistics and other policy and practice connections as well as key practice pointers.  There are also useful diagrams and boxed case studies.

The report (section 2 and appendices) has a nice discussion of the complex multi-dimensional relationship between housing and health (also see a recent review of housing and health inequalities by NHS Health Scotland ). These dimensions include:

  • Bi-directional – while housing may influence health the opposite is also true with health issues constraining locational choices and housing design as well as impacting on financial constraints and employability.
  • Context-specific – impacts and strength of these connections will vary across different populations (and sub-groups), eras and places.
  • Direct and indirect dimensions – where indirect effects can include for instance burdensome housing costs reducing access to other health-benefitting activities.

As the authors say (p.15): “acknowledging these complexities helps add nuance to our understanding, but does not undermine the central fact that housing can be a powerful determinant of health and wellbeing, and of inequalities in their distribution across the population”.

Section 5 is an excellent compendium of resources for housing and public health. Just one example worth following up – a very useful public health oriented report from Wales on the prevention case for housing investment . The final section looks at opportunities for joint working, initiatives that might be taken to link data in housing and health (potentially very powerful) and specific priorities like the private rented sector and strategic joint planning around for instance health and care integration.

I would not pretend to have any background in public health other than reading about it in a housing context and occasionally debating these causality questions with colleagues. More recently through What Works Scotland and through public health colleagues in the University and beyond I have become more engaged with these important inequalities questions. A report like this one is a great practical way into these questions for researchers, students, practitioners and policy facing professionals alike. Well done.

 

Revisiting the Scottish National Performance Framework

 

The purpose of the Scottish Government is to focus government and public services on creating a more successful country, with opportunities for all of Scotland to flourish, through increasing sustainable economic growth’

In 2007 the first minority Scottish National Party Government established the Scotland Performs framework based on a core national purpose (2016 version above), five strategic objectives, a series of (currently) 16 high level national outcomes, and a set of 55 national indicators that operate at high level but can also drill down to clusters of indicators within specific sectors. This approach has been widely acclaimed internationally (it was initially, in part, the product of drawing on a similar model in the Commonwealth of Virginia in the United States) but has also undoubtedly found sceptics, critics and critical friends.

The Scottish Government is now consulting over the framework, its outcomes and indicators and is undertaking a large-scale stakeholder discussion exercise to support this process . Last week they started with an academic roundtable in Glasgow co-organised by What Works Scotland [link]. The session was held under the Chatham House Rule and involved an historical contextualisation of the origins of the framework, a presentation on the outcomes approach to public policy by Ailsa Cook (shortly to be published by WWS) and a detailed discussion on the structure, format, uses and functions of the framework. Below are my personal reflections on the meeting.

The framework sits at the heart of the so-called Scottish approach to public policy, one that stresses pursuit of agreed high-level outcomes consistent with the national purpose and the application of these objectives down to local level through agreeing objectives with each community planning partnership across the country. It is also about a decisive shift to prevention, stressing partnership working and co-production, community empowerment, inclusion and the breaking up of departments and silos in the way Government is structured and led. The touchstone document for all this is the 2011 Christie Commission on the Reforming of Scotland’s Public Services.

One person commentated that we know, for all the critique that may justifiably exist, that Scotland is ahead of the curve on this accountability-outcomes-performance nexus of public policy. How do we now go forward to better work with the complexity of governance and public service reform rather than adding to it?

A first point that came out of the discussion was an exploration of the implications of the different and not necessarily consistent elements of the national purpose. Economic growth, inclusion and sustainability all feature and may well in normal circumstances represent a series of trade-offs – i.e. increasing one may be at the expense of the others. So, how do you determine the weight to be attached to each element and how does that accord to societal preferences? This quickly moved into a conversation about Kenneth Arrow and social welfare functions in economics and the wider appeal of Sen’s capability approach (which is the underlying normative framework used in much of the work of What Works Scotland).

A second theme was that while there was a perhaps surprising degree of consent around the table for an outcomes-focused approach, recognising that there remains little rigorous evidence at a national level about the impact such an approach has on wellbeing, there was much more concern with the relationship between outcomes and indicators that act as performance proxies. As one commentator noted, there is world of a difference between attributing performance to a conscious service or intervention approach and recognising that it may contribute to it (and that this is located in a credible theory of change).

The critique of performance indicators in general is well known – cream-skimming, parking, only counting ‘what can be counted’, focusing on the indicator rather than the broader outcome or purpose, the scope for a wide range of other perverse incentives that undermine a service or intervention. The meeting also discussed the need for consistently rigorous, generalizable, valid and reliable evidence and operational indicators with which to make meaningful judgements. There is often quite a gap between the outcome statement and the indicators in terms of specificity and measureability.

This would seem to make a case for 1. a greater investment in the evidence and data audit required to build better indicators and 2. a comprehensive attempt to ensure minimum indicator quality. On the latter point, I have always taken the view that there is nothing intrinsically wrong with performance indicators, or with the use of sharper incentives or indeed (as came up in the discussion), the use of payment by results mechanisms – what matters is the appropriateness of their design and the careful assessment of how they are used and concern for unintended consequences.

Perhaps this suggests that Government might consider the creation of an independent review group who could support the performance team, comment and propose amendments to the indicators, evidence and data used? Academics and independent researchers could play a potentially valuable role (and the potentially complementary relationship between quantitative measures and qualitative evidence on the ground was stressed by different speakers). This could be an opportunity from the top of Government down to evangelise the use of evidence in accounting for government and public service performance against desired outcomes.

A third element of the story is the fit between local and national level approaches. With single outcome agreements and now with local outcome improvement plans, local community planning partnerships sign up to specific goals which nest into the national performance framework. On the one hand, this provides for a clear place-based representation of these ideas in localities all over Scotland, but it also brings with it the danger of compounding the performance indicator problems and the over-zealous focus on indicators discussed above at the level of the local authority and below.

There were other useful points highlighted. First, make distributional or social justice outcomes and indicators more explicit and more benchmarked consistently with other nations (in the way for instance economic productivity performance is measured against OECD quartile scores). Second, presentationally, the refreshed set of national outcomes  should be discussed and part of the public policy discourse in their own right,. This should be quite distinct to and separated from the mechanism that seeks to use the best practice theory of change and credible analytical evidence (which is valid, reliable and generalisable) by creating high quality indicators of the journey towards the outcomes (and unlike at present – those indicators should nonetheless be mapped on to the outcomes they seek to measure).

At the end of the roundtable I said I thought it had been a valuable exercise on the criteria that I had both learned a lot and we had produced a genuinely multi-disciplinary conversation – economist shall speak unto sociologist, etc. I think the Scottish Government team also felt there was genuine value from the day and I wish their endeavours well.

 

Evidencing the Scottish Approach to Public Policy

 

Back in August I attended a roundtable hosted by the Carnegie UK Trust and the Alliance for Useful Evidence (AFUE) in Glasgow about the extent to which we can discern a Scottish approach to evidence that would underpin the so-called Scottish approach to public policy. The findings from that event has now been put together in a helpful discussion paper by Pippa Coutts and Jenny Brotchie.

What Works Scotland (WWS) is a multi-disciplinary programme of work carried out by the Universities of Glasgow and Edinburgh, supported by its many partners and funded by ESRC and the Scottish Government. I am part of the WWS team. WWS is fundamentally concerned with the use of evidence to inform and support public service reform in Scotland and different dimensions of the Scottish approach to public policy, as exemplified by whole place based policies at community planning partnership levels (and also disaggregated down to local community or neighbourhood levels).

How might we characterise the Scottish approach to public policy? The discussion paper stresses the combination of the outcomes focus of the National Performance Framework estsblished in 2007, the impact of the Christie Commission and its emphasis on the four pillars of empowering people, shifting to preventative spend, promoting partnership and more efficient public services. The Scottish approach stresses integrated, joined up and cross–sectoral co-produced working. Subsequent developments have included espousing greater government openness, legislating on community empowerment and with further decentralising proposals proposed for the current parliamentary session. The discussion paper describes this approach as emergent and the summary states (p.2): ‘whilst we understand these intentions may not be matched in implementation, we think the Scottish approach offers exciting opportunities’.

The discussion paper goes on to argue that the system or modes of evidence required to support the Scottish approach is not yet in place. What is required is a system-wide production and use of mixed forms of evidence rather than concentrating on specific sectors or programmes. The paper argues that the evidence base for greater collaboration and co-production across the research producer and user community in Scotland needs to be strengthened and needs to better involve citizens in that process. At the same time, evidence, from whatever sources (quantitative or qualitative), should be rigorous and seek to minimise bias. The paper speculates that there are lessons and evidence from participatory research and directly from communities (e.g. undertaking participatory budgeting exercises or other forms of deliberative decision-taking) that could improve policy effectiveness.

What needs to happen? The road map suggested by the Carnegie UK Trust and the AFUE involves first, strengthening the national performance framework and promoting its use coherently at local level. Second, they contend that there should be investment in research on co-production. Third, high quality evidence should be embedded to support decision-makers at all levels. Fourth, there  would be value in brokering and developing boundary-spanning relationships across professional, academic and third sector communities to enable them to better work together. Fifth, there is much to learn from outside of Scotland and also a duty to share the Scottish experience more widely.

The paper is an interesting read and one that cannot be adequately captured in a short blog post. Experience from What Works Scotland (see outputs on our website) leads me to make the following points. First, the game-changer for me is how to embed evidence systematically into working practice at local level in all localities. We know that presently there is considerable variety of experience, capacity, resource and use of evidence. At the same time, second, there is actually something of a crowded landscape of providers of profiles and indicators from national levels to the local and there is clearly much interest in how this could be better co-ordinated and more locally contextualised. Third, the Scottish approach is clearly evolving and parts of it have to be refreshed. The Scottish Government is currently consulting widely over the National Performance Framework including its local dimensions and we in WWS look forward to contributing to that process.

Finally, I strongly concur with one of the roundtable participants who stressed (p.13) the importance of learning from failed projects, from what does not work: ‘There’s also something for me about….it’s a kind of form of publication bias, because we only ever hear about the success stories….you don’t send ministers to visit the failed projects’. Indeed.

 

Community-led Approaches to Reducing Poverty

 

What Works Scotland held an event in Clydebank Town Hall this afternoon – a workshop of about 40 people from the public and voluntary sectors, plus a few academics and councillors. The focus was on reviewing the evidence and practice concerning specifically community-led approaches to reducing poverty.

Ostensibly, this was an opportunity to showcase Richard Crisp (Sheffield Hallam University) who led a team of researchers who carried out a formal evidence review for the Joseph Rowntree Foundation. Organised and convened by my colleague, Claire Bynner, this was also a chance to share the work with our What Works Scotland  case study colleagues in West Dunbartonshire and also hear from other speakers including Bruce White from Glasgow Centre for Population Health. I was the rapporteur at the end of the event.

The first speaker was the deputy leader of West Dunbartonshire who set the tone for the day. He emphasised the priority of effective anti-poverty measures and championed the evidence of effective grassroots ‘voice’ and the importance of real life stories found in the JRF research we were discussing. He also, however, stressed that poverty is also (and always) political. For me, that latter point reminds us that even in such straitened times, governments still make choices over what they prioritise and could come to different conclusions about progressive taxes, about the mix of redistributive and more untargeted policies.

Bruce White (GCPH) presented important demographic and other trends relating to different dimensions of poverty comparing Glasgow and West Dunbartonshire. Bruce highlighted the utility of powerful infographics using aggregate and especially disaggregate data. One could not fail to be struck by the significant gradients across neighbourhoods often displaying massive differences from the most to the least affluent areas when looking at child poverty, fuel poverty, proximity to vacant and derelict land, to life expectancy and healthy years’ expectancy. He also illustrated the value of the bespoke community profile created for West Dunbartonshire.

This was followed by Richard Crisp’s evidence review. There were a number of things about this work worth noting:

  • He was clear that community-led approaches do impact on poverty and do so in different helpful ways – but they are modest in comparison to the scale of the problem.
  • He presented a useful typology of community led approaches: voluntary action (e.g. food banks); community organisations (e.g. neighbourhood clean-ups); social action (e.g. living wage campaign); community economic development (e.g. social enterprise); and, community involvement in service delivery (e.g. participatory budgeting).
  • He distinguished between material and non-material forms of poverty. The former concern reducing the costs of housing or energy, providing access to affordable credit or creating employment opportunities. The latter encompasses health and well-being, the quality of housing and the physical environment and wider social participation. The framework used also distinguished three types of positive impact: pockets (immediate respite or support ‘felt in the pocket’), prospects (approaches that help people exit poverty) and prevention (approaches that mean people do not enter poverty). I thought this was a good way of carving up and analysing the evidence. They then moved on to see whether attractive approaches had potential scalability or reach.
  • The research team used this framework and found considerable variety in impacts, their depth and scalability. Little evidence was found of approaches that might be called prevention-based.
  • I was a little concerned initially about the use of the terms scale and spread but Richard, to my mind, correctly, pointed out that specific approaches have to be situated and contextualised and then assessed as to whether they are adaptable to different settings. It is also the case that local or community-level policies have to be set in the wider sub-regional or regional economic context.
  • Finally, there was a powerful point made in the conclusion. Despite the good things evidenced in the report and seen in different parts of the UK every day in local communities, if national politicians thought that the community, the third sector and the big society would step in to fill the gaps created by austerity and deliberate policy change – they were wrong. The scale of the shortfall and its consequences for increased and deepened poverty need a sustained large scale response.

It was not all speakers speaking – there was plenty of active and varied interaction and participation from the delegates. This was a genuinely stimulating event and it was great to see that the JRF’s UK research spoke so clearly to west central Scotland. Tomorrow the caravan heads to Dundee and I am sure it will be similarly relevant there.

Glasgow 2018 European Championships – Continuing the Journey

The 2014 Commonwealth Games in Glasgow was a pivotal experience for the city and its people. This is not to say that there was not controversy and criticism of specific aspects of both the delivery and certain dimensions of the legacy. My point in this post though is whether or not lessons are learnt and applied to future undertakings. It is undoubtedly true however that Glasgow has demonstrated that it has the technical capacity, the facilities and the wherewithal to compete as a host for major events. The success of those 11 days in 2014 in these terms and for the city in the sense of jobs, visitor numbers, festival effects, investment in facilities, etc. now means that Glasgow can host other major sporting events: the world gymnastics, cycling, swimming and the Davis cup to name four since 2014.This is a remarkable achievement if we cast our minds back to just a few years ago.

I understand the critics of what are referred to as post-industrial neo-liberal urban policies fixating on heritage, tourism and culture or sports and also concerns about the ability to bend such programmes towards reducing inequality and proactively supporting multiple disadvantaged communities. But does being an event host competitor and winning these events make a broader kind of economic logic? It depends on whether we think the opportunity cost of event delivery is outweighed by the economic, social and more indirect tor implicit benefits of such activities. The raft of legacy research findings on economic returns, jobs, visitor spend and the like do seem to be additional – but they are also an investment if facilities can be reused not just by citizens but for further events, too. Other legacy lessons about volunteering, physical activity, community development and sports clubs, etc. are much less clear cut. Many of these debates will actually need a longer time period to be resolved.

My point in this piece is more that the city is on a journey and is being transformed into a place which can deliver these mega events (and sport-specific international events too), and if properly constructed this can add value to the city-region economy and change the way we think about it. It could enhance rather than displace other investments, job creation and economic activity (though there is no necessity for this – it requires careful design and constant attention).

It is in this context that I should declare an interest – I was a member of the cross University legacy research partnership that the City Council and Glasgow Life established for the 2014 Games. As part of that role I agreed to facilitate a workshop this week. The meeting sought to learn lessons from 2014 both operationally and in legacy terms, and apply them to the development of the delivery and legacy plans associated with Glasgow’s co-hosting of the summer 2018 inaugural European championships. Working with Berlin this will involve bringing together a series of European sporting championships for individual sports into one mega event. Glasgow and satellite venues will host cycling, swimming, triathlon, golf and rowing, among others; Berlin will do the athletics.

My role the other day was really just to hold the coats and keep things to time but it was nonetheless a thought-provoking morning and a fascinating insight into how partners (lead officers in the council, Glasgow Life and other relevant public agencies) are thinking their way through the challenges of the event. A few things struck me in particular.

First, a considerable amount has been learned about what works and what does not work as a result of the 2014 experience. This ranges from the locus of control and the relationship with other non-local partners integral to a mega events programme, but includes issues over community engagement, communication, managing expectations and trade-offs (e.g. seeking to widen inclusivity among volunteers but also selecting those with the right skills). However, people clearly recognised that there are limits to the transferability of these experiences because of the different nature of the two events.

Second, there was a complete absence of complacency and instead a shared desire to work in partnership with neighbouring councils involved in delivery, with Berlin, European broadcasting, the business community, local sports clubs, volunteers and the specific sports organising bodies. People present were both aware of and thinking hard about identifying and managing risks.

Third, it is clear that Glasgow has changed and is changing as a result of the 2014 experience. This is not just branding and the after glow of the festival effect from 2014. There is a palpable capacity to maintain and strengthen Glasgow’s recently won position as an international mega event host and to lever economic and social benefit from it. While they do not happen by themselves and are easily over-estimated, we should equally not dismiss the potentially major long term effects this may have on the city and indeed for Scotland.

Accelerating Divergence? Housing in Scotland and England

I write this on a long-haul flight on a Saturday night. After 6 weeks of long hours to clear the decks, much teaching and many deadlines, we are on our way to a family wedding and a conference (ahrc2016.nz), both taking place coincidently a week apart in New Zealand. As a result of front-end loading work for the last wee while I have not been writing much but I hope that will now change.

My conference paper is concerned with what we should make of the evident accelerating divergence between housing policies and approaches in England and Scotland? Is it a source of evidence of innovation, does it suggest differences which might provide lessons or ideas, or if not, what we can learn about both the state of housing policy in each country and indeed about devolution?

What are the grounds for saying that there is accelerating divergence? Prior to 2007, there were important legislative distinctions such as the 2003 homelessness legislation in Scotland and the earlier decision not to consider, for public funding reasons, arms-length management ‘solutions’ to social housing (as favoured in England). There was also long-standing examples of divergence by degree, such as the long standing and cumulative effects of higher rates of per unit grants for social housing in Scotland. Much of the rest of the respective housing systems, nonetheless, looked much the same.

The big changes started when electoral results meant that different parties governed north and south of the border. In 2007, the new SNP minority government signalled its intention to end the Right to Buy for new council homes so as to encourage councils to build for general needs (later supported by capital grants on a similar basis to housing associations). The RTB was later abolished altogether by the majority SNP Government elected in 2011. The election of a UK Coalition government heralded the deficit reduction strategy which impacted on the housing sector through deep departmental spending cuts and new low subsidy programmes in CLG and, of course, welfare reform and Housing Benefit cuts. The Scottish Government produced impact assessments on the effects of these cuts completely at odds for those produced at DWP.

More recently, the furore over the present housing and planning legislation in England (and their substance) concerning the raft of social renting reforms and the direction of new build initiatives, looks increasingly alien in a Scotland where the main parties are largely signed up to expanding social and affordable housing supply to come close to meeting (or meet) the estimated levels of national affordable housing need of 12,000 per annum using deeper levels of grant per unit £72,000).

But it is not all divergence. Sometimes, the different governments happily follow each other even if they tailor initiatives. For instance, Scotland adopted the Help to Buy model though it was targeted to new build that was supposed to be aimed at first time buyers (though average realised prices were high if they were to do this). At the same time we have had unquestionably inefficient and unhelpful policy competition such as with the devolution of stamp duty – The Chancellor responded to the new Scottish progressive tax rates by trumping the rates, leaving the Scottish finance secretary obliged to come up with an even more progressive structure of tax rates. The Scottish housing market faced three tax systems in a year and, not surprisingly, the tax revenues raised were less than predicted. Most recently, when the Chancellor announced the decision to increase stamp duty by 3% at all these new tax rates aimed at buy to let investors, the Scottish finance secretary chose to do the same.

Policy competition can be wasteful but it does remain at least conceivable that there may be functional benefits, and useful things to learn from policy experimentation and divergence. The simultaneous development of multiple local community housing associations in Glasgow was a test bed for all manner of housing and neighbourhood innovation. Why, if there was a will could it not be the case that policy innovation or divergence in housing, as much as any other area of devolved policy competence, could not and indeed should not be systematically studied in order to make progress for citizens living in all parts of the U.K.?

What are the barriers to useful transfer and lesson-learning? One is political – certainly between the UK and Scottish governments, policy based collaboration appears to be vanishingly rare. Second, for the same way two parties, the incentives to share and learn seem disappointingly weak, in part because the ends of their respective housing policies and the means willing to be adopted e.g. on the composition of new supply and tenure – are so different. Not fertile ground and probably also not helped by less and less institutional policy development dialogue from civil servants. Unlike national comparisons (also not without methodological and empirical problems), there seems to be less glue sub-nationally in a system such as that of the UK to let us share and learn. While one may see how this can happen between the Conservatives and the SNP in 2016, it does not really explain a trend between Scottish and U.K. Governments that began to be discernible arguably  when Labour was in power in both places. Neither does it explain the lack of deeper relationships between the non-England parts of the U.K. All the odder in this era supposedly dominated by policy networks. For many of the same reasons  as above, we should not be confident, however, that a wider comparative policy transfer analysis role can be played by think tanks and other similar specialist policy commentators.

I don’t know if this unintended failure of devolution is unique to housing but I very much doubt it.

Tackling Poverty in Scotland

Sometimes events unexpectedly coincide. Yesterday I was one of four colleagues from Urban Studies giving evidence to the Local Government and Regeneration Committee at Holyrood. At the same time, elsewhere, the independent advisor on poverty and inequality, Naomi Eisenstadt, was launching her poverty report – Shifting the Curve. Earlier in 2015, I was one of a number of academics who had an interesting seminar with Naomi to discuss key issues, evidence and the things most needing to be done to combat poverty in Scotland.

After a shaky start in the evidence session (we thought we were there to talk more about our written evidence; the committee wanted to talk about its legacy and its forward agenda), it turned out to be quite an interesting hour. We discussed a range of topics including community empowerment, the place standard, community planning partnerships, how the committee system in Parliament can integrate and operate more cohesively, as well as participative budgeting and the impact of austerity on local services and deprived areas. My colleague, Annette Hastings, also raised the launch of the aforementioned poverty report.

While the advisor’s work focused on delivering serious proposals that could in conjunction and over the long term move large numbers of people out of poverty, the headline that grabbed the papers’ attention was the recommendation to end the council tax freeze and reinvest the resources currently tied up in maintaining the freeze (£630 million this year). The poverty advisor did not however reach a view on what form of local tax arrangements should replace the council tax, other than ‘be bold’. When we met the advisor, Mark Stephens and I suggested that a phasing out of the freeze might free funds in part to augment the affordable housing supply programme – this may be what she has in mind. I have put the 15 recommendations from the report in an annex at the end of the blog.

To be fair, the advisor praises the work that the Scottish Government has done in a difficult funding context, and notes the relatively better position of Scotland if we compare poverty measures across the UK. She is a strong advocate of inclusive growth and the effect the jobs and wages can have on poverty. She also recognised the positive interventions that have mitigated and reduced various forms of material poverty. But she is clear that more can be done and by all parties to reduce poverty’s pernicious impacts across Scotland.

The advisor’s report focuses on three areas of challenge. First, in work poverty (half of working age households in poverty – and 56% of those with children – had someone in work ). Second, young people and hence focusing on the life chances of those aged 16-24. Third, the report also focused on affordable housing because of the critical role played by housing costs in terms of the incidence of  after housing cost poverty levels in Scotland.

The poverty & inequality advisor concludesd that tackling inequality is particularly difficult but, to paraphrase, the combination of income redistribution of progressive taxes and a principled balance between universal and targeted or selective public services – might offer a way forward. Area-based targeting, for instance, supporting schools in deprived areas, may be a further important and complementary option. She recognises, of course, the contested nature of such conclusions:

These are contentious issues, but there may be ways through the log-jam. It would be very useful to have a clear and shared understanding of what a progressive, or as Michael Marmot would have it a “proportionate‟, universal system would look like in practical terms. I would be interested in engaging in further debate about this in Scotland, as it seems to me to be key to developing anti-poverty policies.’ (p.25).

These are critical rubbing points for the Scottish Government and other proponents of universalism – but I for one would be in support of such a debate being advanced by the Scottish Government when it responds to Naomi Eisenstadt’s excellent report.

Annex: the report’s main recommendations are:

In-work poverty

  1. Build on Living Wage Accreditation – a focus on larger employers, and on incentives, would be useful.
  2. Encourage pay ratio disclosure as a way of tackling pay inequality.
  3. Ensure childcare commitments focus on quality to improve outcomes, and consider providing a limited number of free hours of childcare for primary school aged children.
  4. Make family flexible working more explicit within the Business Pledge, and consider whether approaches such as the Timewise programme could promote flexible working in Scotland.
  5. Do more to ensure that people claim the benefits they are entitled to.
  6. Make effective use of new social security powers but proceed with caution.

Housing affordability

  1. Build more social housing.
  2. Ensure fuel poverty programmes are focused to support those on low incomes, and do more to tackle the poverty premium in home energy costs.
  3. Be bold on local tax reform.

Life chances of young people, aged 16-24

  1. Carry out a comprehensive review of the policies and services relevant to the life chances of older children and young adults, with particular emphasis on young people from poorer backgrounds.
  2. Reduce the number of government-supported employment programmes targeting this group of young people and simplify the landscape, to provide a clearer, sharper focus.
  3. Ensure that the new approach to employer engagement in education is having an impact on improving skills for work of young people.
  4. Do more to tackle occupational segregation.

Cross-cutting

  1. Ensure that public service delivery is respectful, person-centred and preserves the dignity of people in poverty: pre-employment and in-service training should include the importance of avoiding stigma and developing understanding of the challenges of living on a very low income.
  2. Commence the socio-economic duty in the Equality Act 2010, when powers are available to do so.

Evidence on Council Tax Reform

Local Government Finance and the Reform of the Council Tax

Written Evidence to the Local Government and Regeneration Committee Evidence Session, 20 January 2016, Scottish Parliament

Professor Kenneth Gibb

Background

Council Tax is the local tax levied on households in the UK including Scotland. In 2013-14, total local government revenue was £12.5 billion. In 2013-14, just under £2 billion or around 15% was raised by council tax[1]. In 2015-16, this amounted to 32% of Scottish public spending. If police and fire had not been taken out of the local Government settlement, that share would have risen to 36%[2]. The recent Scottish budget for 2016-2017 shows the levels of local government spending. The headlines are that local government spending will fall in nominal terms from £10.757 billion on 2015-16 to £10.152 billion in 2016-17 (annex G table 4), and this is larger in real terms.

A key feature of central-local Government relations in Scotland since 2007 has been the Concordat, which has loosened various controls on local government (e.g. the ring-fencing of certain spending programmes) in return for, among other things, an on-going freeze on band D council tax levels. This has been in place for eight years and the cumulative budget implications for the Scottish Government (who de facto top up grant to cover the cost of the freeze) of adding a further £70m to the cost of the freeze each year is that after eight years it now costs an annual £560m. The 2016-17 Draft Budget proposes a further ninth year of council tax freeze.

Council tax was introduced across the UK in 1993 and sought to provide a credible way of raising local Government finance, which would be broadly acceptable to citizens. This was done by creating a hybrid property and personal tax wherein the property tax elements were softened by employing eight bands  linked less than proportionately to band D (the reference band), reintroducing a maximum 100% rebate for low income households and by retaining some of the elements of the community charge in the form of personal discounts for single adult households. All properties were valued at 1991 house price levels but were not subsequently revalued.

While the council tax settlement was supposed to take politics out of local government finance, it would be more accurate to say that it deferred the problem. Dissatisfaction grew with the tax over time and a number of inquiries and commissions (notably those chaired by Lyons in England and Burt in Scotland) sought to review local taxation – without leading to any significant reform. Under the UK Coalition Government’s localism and deficit reduction policies, council tax benefit was replaced by a series of local schemes with a 10% general reduction in overall support across England. In Scotland a new system of council tax reduction was introduced, ostensibly the same national scheme, with the 10% reduction reinstated through combined funding from Holyrood and town halls.

Finally, in the Autumn of 2014, the Scottish Government’s Programme for Government announced the establishing of an all-party (and also independents) Commission on Local Tax Reform (CLTR) co-chaired by the minister of local government and the President of COSLA (note the Conservative party did not participate). The Commission was charged to look at fair ways to reform local taxation (just the domestic sector) and to consider the future of the council tax freeze[3]. I gave evidence to the Commission and co-authored (with Linda Christie) an international evidence review. The Commission reported in December 2015[4].

The Commission concluded that the council tax needed to be replaced and that the freeze should end. It did not however categorically support one form of local tax as its preferred solution but rather made the case for three alternative local taxes: a property tax, a local income tax and a land value tax, exhorting the political parties to come forward with their own proposals for the Scottish election in the Spring of 2016. To this end, the Scottish Government is currently developing such proposals.

What is so Bad About the Council Tax?

There are several accounts of the problems associated with the council tax[5]. First, it is regressive across space. Evidence from England indicates that low value regions in the north pay higher proportions of household income on band D properties than do households in the South. Second, a growing proportion of dwellings pay less than the standard council tax liability because of discounts and exemptions. Third, and perhaps most importantly, the council tax is regressive across income bands (as indicated 10 years ago by Burt) but particularly so in terms of the amount of tax paid as property values rise. Fourth, apart from Ireland who recently imitated the UK, no other OECD country has a banded property tax. The bands themselves are very odd, as indicated in Table 1, since their weights flatten the tax liability across different property values such that a band A property pays a 1/3 of a band H property yet the latter may be at least 15 times the value of a band A property. Critically, the council tax has not been revalued since 1991 which creates all manner of anomalies and leaves the market distribution of property value increasingly divorced from the historical 1991 distribution – it is widely recognised that regular revaluation is essential to a sustainable property tax system. These problems accumulate over time and reinforce each other so that the council tax system decays into greater disorder over time.

Local Taxes: International Practice

The research for the CLTR by Gibb and Christie reached the following six conclusions[6]:

First, there is a disconnect between the economic and in-principle arguments about local taxes in general, and property taxes in particular, compared to how they are perceived by people and politicians. Academic commentators are widely positively disposed to property taxation but there is also recognition that as a salient, highly visible, presumptive tax, arguments over incidence (i.e. who ultimately pays?) are trumped by a narrower focus on ability to pay from current income. Ironically, this has led to many of the difficulties we see with property taxes around the world as governments attempt to assuage voters by softening the incidence of the property tax through postponing revaluation and by employing other measures to alleviate the symptoms. Finding the right way to compensate low income tax payers remains a critical issue for property taxation.

Second, how one judges the incidence of property taxation is also fundamental. If one starts from view that the property tax is one on housing services as opposed to wealth, then completely different conclusions are arrived at as to fairness.

At the same time, third, there are issues with local income taxes – they are only as fair as how they are defined in practice and how progressive the wider income tax structures that they operate within actually are. There are other questions about the degree of local autonomy they afford and the extent to which they may have volatile yields, operate pro-cyclically and whether they induce fiscal mobility of households and firms.

Fourth, land and property taxes may have desirable impacts on housing markets and land use but that also depends on design – there is plenty of international evidence suggesting it can go wrong[7]. The evidence shows remarkable variation in all of the key aspects of property taxes: tax base, assessment method, tax rate-setting and help for households. This generates a large set of design choices for property taxes in practice.

Fifth, systems of local tax and the inter-governmental finance and distribution of services are highly idiosyncratic. They are the product of long periods of evolution and punctuated periods of reform. With such different contexts, design details and complex interactions with other taxes, one must be cautious about reading too much into the simple transferability of local tax systems across nations with often very different governance institutions.

Finally, and returning to Burt and the other cross-national reviews, it is apparent that cities and national systems of local government typically have more than one local tax at their disposal and frequently have many taxes at their disposal. More taxes of lower yield but revenue neutral overall may also of course reduce revenue risk as well. One would need to evaluate the administrative cost of their development and running costs as well as their own buoyancy and capacity to generate revenue. In an international context, nonetheless, it remains odd to restrict oneself to one form of domestic local tax.

Options for Change

  1. Do Nothing – the main reason for doing nothing is the political difficulties and unpopularity of changing already unpopular local taxes. However, doing nothing leads to worsening problems and today’s denial is tomorrow’s bigger problem. However, we seem to be at a stage in the debate where some change is likely to be forthcoming so this remains an unlikely long term position and of course all of those problems identified above with the status quo continue to apply.
  2. Minor tinkering. In a recent interview,[8] the first minister indicated a possible way forward introducing new bands and possibly re-weighting the intervals between bands, but not seeing the need for a general revaluation (a more palatable but less technical and probably less sustainable short run reform). Yet, there is no escaping the need for revaluation for a property-based tax. The 2016-17 Draft budget also indicated that the Scottish Government was considering and would consult on assigning devolved income tax to the local authorities the tax was raised in. This is potentially quite problematic and should be considered very carefully.
  3. Earlier in 2015 the Oxford University economist John Muellbauer proposed a more comprehensive reform of council tax which would add a an extra high value property band, exempt the first £40,000 of all properties, undertake a general and regular revaluation and offer deferred payments to address the cash poor asset rich owner occupier problem. His concern was as much to help use council tax to subdue house prices and employ better ways to address inequity in liability.
  4. In 2006, the Burt Review clearly came out in favour of scrapping council tax in favour of a simple tax on newly assessed capital values (introduced in Northern Ireland but still called the rates). This was the proposal rejected by the then first minister before it was even published. Burt also argued that a revenue neutral local income tax would impose too high an additional marginal tax on incomes and would likely promote net migration out of Scotland. He also concluded that Scotland would not tolerate a dual solution of property and income taxes, as it would be seen as an increase in taxation.
  5. A land value tax – taxing the economic rent from land, a proposal widely supported by economists and by many others, too (e.g. Iain McLean and Andy Wightman). There would be technical demands (though not insurmountable) in creating the land tax base and there could be major redistributional effects resulting from initial capitalisation of the new tax on land and property values, which might require transitioning or compensation. Undoubtedly, there would be vocal losers from such a tax reform. LVT might alternatively be established as a central or national level tax alongside other combinations of local taxes (something similar was once proposed by Muellbauer).
  6. In our evidence to the Commission, we proposed an initially revenue neutral dual tax solution, primarily a property tax along the lines of Burt’s 2006 proposal but augmented by a relatively small income tax component. This latter element was in part to reflect the predominant public concern that local taxes need to in part to be based on current income as well as wealth but also that it was important that the income tax element was locally set and was not an assigned revenue from national taxation. As a small contribution it would be less likely to have revenue risk consequences in the form of fiscal flight.

Tax Reform and the Council Tax Freeze

Tax reform is hard enough but significantly further complicated by 8 years of the freeze. Politically, it is recognised that council tax freeze is popular, it keeps bills down, and that therefore there are no votes in ending it. On the other hand, it undermines local democracy and accountability. And it has an annually increasing and extensive opportunity cost in lost Block spending resources. It will cost £630 million in 2016-17. Assuming that an incoming Government later in the year does bite the bullet, how do you rewind the freeze – could there be a phased removal over a Parliament? Reducing the cost by even £125-140 million a year would produce substantial extra public funds for housing, infrastructure and other pressed budgets. Moreover, there could be caps or other incentives to keep council spending below some agreed norm (e.g. RPI & X%).

Further Stages of Necessary Reform

Local government’s challenges are not just about domestic taxation. Actually, there are a series of linked problems to do with the role of local government and its relationship with Holyrood (I.e. How public services are divided between the tiers) as well as the geography of local government and its wider financing (the balance of funding question between locally and centrally raised sources of finance). In an earlier study we talked about the Rubik’s cube problem of local Government: we tend to address one of the these issues at a time or fail even to see the other dimensions, rather than work towards a genuinely comprehensive solution recognising the interdependence of the problems of funding, functions and geography[9].

Why is it so Difficult to reform Council Tax?

Tax reform is hard. Local taxes are presumptive because they are highly visible making them unpopular, no more so than when revaluation of property taxation is considered. But Government cannot simply be devised to be populist – it has to do the right things and pay more than lip service to ‘difficult choices’. Failing to deal with the funding of local government finance is ultimately going to fail the people who use these services. The idea behind the Commission, seeking a clear all-party common line about reform, was correct and an obvious lesson learned from the Burt expert approach in 2006. However, the Conservatives did not join and within hours of publication, it was clear that beyond agreeing that the council tax must be reformed and the freeze ended in the future, there was little wider agreement and three quite open reform options proposed. We will see what this actually delivers in term of the detailed government response to come and subsequent manifesto commitments.

 But there is also much to gain from better land and property taxation i.e. supporting a more sane and stable housing system, one less obsessed with property wealth. There is increasing concern with wealth inequality and it is currently significantly transmitted through an often arbitrary housing market that is lightly and inefficiently taxed, such that it incentivises mass and undiversified savings into bricks and mortar and discriminates against both rental housing and other more productive forms of savings and investment. The economy grows less, risks are greater and we have a poorly functioning housing system as a result of not tackling housing investment taxation, as well as new supply and housing finance. In the same way that local taxes are part of the wider long term reform agenda for local government, property taxes are part of the bigger picture seeking to address housing in society and the economy. This will be equally if not more challenging but arguably is as important.

 Table 1 Strategies for Property Tax Reform

Issues & Problems Promising Approaches Problematic Approaches
Salience: property tax (PT) is more visible than other taxes Link tax reforms with improvement in local services
Phase-in
Withhold tax at source and other payment options
Assessment limits

Property Tax capping

Liquidity constraints: imperfect association between taxpayers’ incomes and PT especially for seniors Tax deferrals for seniors
More payment options
Phase-in
Assessment limits

PT capping

Perceived regressivity: taxes higher as a % of income for low income taxpayers Tax credits
deferrals
bundle with other tax reforms
Bundle with spending changes
low-income housing exemptions
Banding
Classified tax rates
Progressive tax rates
Assessment limits
PT capping
Volatility: potentially large swings in taxes for some taxpayers Annual reassessment
Index base
Taxpayer education
Communication in understandable forms
Phase-in
Assessment limits
PT capping
Presumptive Tax: taxbase is inherently arbitrary Taxpayer education
Consultation
Accessible appeals process
Phase-in
Self-assessment
Classified PT rates
Assessment limit
PT capping
Inelasticity is problem for Local Government, not for taxpayers: taxes do not increase with econ growth Annual reassessment
Index base
phase-in
 

Source: Slack and Bird 2014 Table 1 – in Gibb and Christie, 2015..

 Table 1 suggests some promising and other less promising ways to make progress reforming property taxation. The synthesis of different local tax experiences across countries tell us a lot about property tax reform and how difficult it can be to achieve. One might reasonably conclude that there were many in-built problems with council tax as a model from day one. Moreover, anticipating that there may be short run transitional problems in advance of what are believed to be desirable long-term consequences of well-designed reform, is one important way to mitigate and lay the ground for reform.

 Footnotes

[1] Don Peebles (2015) Council tax in the context of local government finance. CIPFA Scotland

[2] Alan Campbell (2015) Local Government Finance Facts and Figures: 1999 – 2016 Financial Scrutiny Unit Briefing, SPICe.

[3] The remit was to identify and examine alternatives to the council tax that would deliver a fairer system of local taxation. In doing so, the Commission also considered:

·       The impacts on individuals, households and inequalities in income and wealth.
·       The wider impacts, including housing market and land use.
·       Administration & collection, including transition and subsequent operation.
·       Potential timetables for transition, given the 2017 Local Government elections.
·       The impacts on supporting local democracy, i.e. financial accountability and autonomy.
·       The revenue raising capacity of the alternatives.

[4] http://localtaxcommission.scot

[5] http://scottishpropertytaxreform.org/?page_id=34

[6] This is an edited version of our report conclusions.

[7] Slack, E and Bird, R (2014) The political economy of property tax reform. OECD working papers on fiscal federalism No. 18.

[8] Interview in the Sunday Post online 14 November 2015: https://www.sundaypost.com/inside-the-sunday-edition/nicola-sturgeon-looks-back-on-a-year-as-scotlands-first-minister/

[9] Gallagher, J, Gibb, K and Mills, C (2007) Rethinking Central Local Government Relations in Scotland: Back to the Future? David Hume Institute/University of Glasgow, Hume Occasional paper 70