Speech

Going Local - Scotland's Future

This speech was published under the 2010 to 2015 Conservative and Liberal Democrat coalition government

COSLA/ IMPROVEMENT SERVICE ANNUAL CONFERENCE – GOING LOCAL… SCOTLAND’S FUTURE

Speaking note of The Rt Hon Lord Wallace of Tankerness QC, Advocate General for Scotland and Deputy Leader of the House of Lords – ‘Local perspective, national challenge’

I am very grateful to COSLA and the Improvement Service for their invitation to speak today.
But at the outset, I should wish to pay tribute to Tony Benn. Although we obviously disagreed on much, I will recall him as a formidable Parliamentarian. A great campaigner on the stump, but also a man who recognised Parliament – or more specifically the House of Commons – as a place to advance your cause and crucially, to hold the executive to account. I count it a privilege that I sat in the same House of Commons with him for seventeen years.

But I am genuinely pleased to be given the opportunity to speak, once again to a COSLA Conference, and to take some questions before David O’Neill closes the conference.

I say “once again”, because as Leader of the Scottish Liberal Democrats in the 1990s I had to take part in the conference panel discussions which my successor, but two, Willie Rennie has done this morning. And then, after the establishment of the Scottish Parliament, as Deputy First Minister, I was given somewhat longer to speak, usually in defence rather than attack mode.

Today as Advocate General for Scotland, I speak to you primarily as a member of the UK Coalition Government.

When I was appointed Advocate General for Scotland, following the formation of the Coalition Government in May 2010, a reporter from the Annandale Observer, the local newspaper which covers my native town of Annan, phoned to ask if I was the first Liberal Democrat ever to hold the post. I had to politely point out that, in fact, I was only the third person ever to hold this office. It was established by the Scotland Act 1998, as the law officer advising the UK government on Scots law and legal issues, as well as discharging certain statutory functions created by the Scotland Act.

However, I can assure you that I don’t intend to give a legal discourse this morning. But a common thread from even before the time I worked with COSLA in the cross-party Constitutional Convention to today has been an involvement in the issue of constitutional reform.

Debating how to best hold power to account. Tackling democratic deficits. Making the case for federalism and localism. Ensuring power and decision making are always delegated to the lowest possible level. And now making the case for a strong Scotland staying within the United Kingdom.

These themes are central to what this conference has been addressing over the past couple of days: to the work of the Commission on Strengthening Local Democracy; to decentralisation; to a participative democracy; to questions of tax and distribution; to recognising – as we did with devolution across the United Kingdom – that one size does not fit all.

All forms of governance – international, national, local – evolve. They have to adapt to rapid changes in technology, to global financial forces, to the aspirations and expectations of people.

As a consequence, governance can never be static. And the challenge to those of us working at a national level – Scottish and UK – is to respond to this reality.

Local government in Scotland and the UK Government

Local government in Scotland is clearly changing. Something people in this room have been arguing for quite some time. I know that this is not without its tensions, but equally it presents all tiers of government with opportunities.

To redefine and improve the partnership between us. And to ensure we develop a new model that is focused on reforming local service delivery in line with peoples’ needs and aspirations.

So what might this mean for the relationship between local government in Scotland and the UK Government?

Because local government is a devolved matter, there is a tendency to overlook the linkages between our councils and the United Kingdom government; whereas the reality is that we already have a strong, direct relationship - with COSLA, with individual local authorities and with groups of local authorities.

Something I know the Commission on Strengthening Local Democracy has been considering with its panel on ‘local democracy in a UK context’.

These strong relationships exist across a wide range of areas: on the Scottish Employability Forum, exploring the potential for city deals, welfare reform implementation, the work of ‘Our Islands Our Future and The Crown Estate.

I will come back to these shortly, but you will readily see why these relationships – and their continual improvement – matter.

And more specifically, this year, the UK Government is working in close partnership with local authorities as we commemorate World War One, as well as in the preparation for what will be a fantastic showcase for Scotland in the Commonwealth Games in Glasgow.

Every single day, too, Jobcentre Plus and local government across Scotland give people the support and skills to get in to – and stay in – work.

Economic growth and welfare reform implementation

Our shared focus on employment and employability is central to the success of the delivery of the UK Government’s objectives for improved economic growth.

We are 100% behind the tripartite (UKG, SG and COSLA) chaired Scottish Employability Forum, which has an important role in drawing together all parts of Government with key stakeholders and delivery bodies, in order to address unemployment within the context of economic recovery.

Looking at the allocation of resources and measuring performance. Better linking of economic development and employability. And the impact of welfare reform on employment and employability services

I acknowledge up front the different views that exist about the merits of the Coalition’s welfare reforms.

Although I do believe it is reasonable to argue there has long been a consensus that the system needs reform to be fair, affordable and able to reduce poverty, worklessness and welfare dependency.

Indeed, the opening line of the Scottish Government’s and COSLA’s November 2012 joint statement on welfare reform called for “a simpler welfare system that makes work pay and lifts people out of poverty”.

That is not the welfare system the Coalition Government inherited when we took office in 2010. Rather, it was a system that incubated poverty and incentivised dependency. And in fairness, when asked in a Scottish Leaders’ debate in the 2010 General Election what would be the one thing the next government would have to do, the then Secretary of State, Jim Murphy, said ‘welfare reform.’

The simpler system is what we are working hard to achieve. And I am glad we share that aim with the Scottish Government and COSLA.

Proposals to stop or roll back things like Universal Credit are simplistic and would risk a return to a discredited, complex, unaffordable system.

It is of course the case that we are already well into our implementation phase.

And part of that process has included a constructive dialogue – led by the Parliamentary Under Secretary at the Scotland Office, David Mundell – with local government in Scotland about your experiences of managing these reforms.

And that constructive dialogue has resulted in government changing things in response to what local authorities in Scotland have said to us:

• To deal with issues of rurality and the particular difficulties that can bring in the context of housing benefit changes and housing stock supply. • To ensure that the most vulnerable tenants are not forced onto direct payments where they are unable to cope.
• And not to require people to have to apply for benefits online where there are barriers to digital access.

So we are listening to local government in Scotland and adapting our implementation plans to Scotland’s circumstances.

Whether this means putting more resources in to administering Discretionary Housing Payments or providing more support to help people back in to work, local authorities and the UK Government are working together.

And we want these conversations to continue in the weeks and months ahead.

There is further evidence of this ongoing dialogue in the strong links that have been built between local Jobcentre Districts and their local government counterparts, where the sharing of information is commonplace to support local communities and enable the better delivery of services.

By way of example, DWP and Glasgow City Council co-chair Welfare Reform Strategic group meetings.

This has contributed to closer working with the 67 Housing Associations and Registered Social Landlords in Glasgow.

The result is a multi-agency approach to supporting tenants in improving digital skills and getting back to work.

DWP are also keen to incorporate co-location with local authorities in Scotland, for example, Link Officers from South Lanarkshire Council being sited in Jobcentres.

And, in North Lanarkshire, where the Council currently runs an employability support service for 16-24 year olds, DWP has provided £201,000 of Flexible Support Fund money to widen this support to 25+ claimants, lone parents, ex-offenders, Work Programme returners and those with substance abuse issues.

This real world delivery on the ground is where the partnership between local government in Scotland and the UK Government matters.

City Deals Let me turn briefly to another example of the good relationship that exists between local government in Scotland and the UK Government.

The whole of the UK needs more business and employment opportunities to grow our single, integrated economy.

The UK Government’s firm belief is that transferring powers from government to cities will make it easier for cities to achieve that economic growth.

We are committed to delivering an ambitious City Deal for Glasgow and the wider Clyde Valley area.

We are working with local authorities, the Scottish Government and other local delivery partners on a package of support that crosses devolved and reserved responsibilities in relation to infrastructure, the labour market and private sector growth.

This approach is underpinned by the very principles at the heart of what you have been discussing and debating over the past couple of days.

It is about empowering local areas to take charge of and responsibility for decisions that affect their area; to do what they think is best to help businesses grow and create economic growth; and to have the power to decide how public money should be spent.

The core cities in England who have already concluded their deals – Birmingham, Bristol, Leeds, Liverpool, Manchester, Newcastle, Nottingham and Sheffield – have estimated they will create 175,000 jobs over the next 20 years and 37,000 new apprenticeships.

With new deals announced for other cities this week we can expect to see these numbers grow across the UK.

It is these benefits that make me excited to know that a number of other cities in Scotland have already expressed a desire to negotiate a City Deal.

Our Islands Our Future (and The Crown Estate) I would like to move now from our cities to our islands, where I should declare an interest as a resident of Orkney.

I know you have heard from Steven Heddle about the work of the Our Islands Our Future initiative and so I will not repeat here its aims.

Suffice to say that I, the Secretary of State for Scotland and the UK Government more generally, take the combined approach of Shetland, Orkney and Comhairle nan Eilean Siar extremely seriously.

We have been delighted to host a representative group in London and to facilitate engagement with the European Commission to help inform the initiative’s thinking. We look forward to further engagement next month.

And we are as committed to working with our local government partners in islands and rural communities as we are our colleagues in Scotland’s cities.

I argued during the 1997 referendum and beyond that devolution does not stop in Edinburgh. That the then new Parliament should be sensitive to the needs and aspirations of Scotland’s many diverse communities, not least in the Highlands & Islands.

You may recall how the first Scottish Government pursued a relocation policy – often in the face of opposition from vested interests – decentralisation, taking civil servants out of the centre, changing mindsets and perspectives.

For example, crofting grants to Tiree; the Scottish Government’s Central Enquiry Unit to the call centre in Kinlochleven and SNH to Inverness.

And it has been responsible for changes that matter for our islands.

• Tavish Scott, when Transport Minister, delivering the air discount scheme for both islands residents and islands businesses; • Kirkwall Airport being equipped with an instrument landing system; • EMEC being established in Stromness; • a power of local initiative being given to local authorities.

I recall the significant reform of the Common Agricultural Policy in 2004-05. The input and level of consultation with the local NFUS in shaping that policy was greater than could ever have been achieved when the decisions were Whitehall-centric.

As the Islands Councils themselves recognise, the debate in relation to their powers and duties is not new. The Montgomery Committee’s report was submitted to the UK Parliament by the then Secretary of State for Scotland as far back as 1984.

And of course devolution has meant responsibility for decisions about the functions of local government now rest with the Scottish Parliament and Scottish Government.

That of course means that it does not require independence to effect further change.

At the heart of Our Islands Our Future lies the question about whether all Councils in all areas should have exactly the same powers.

While we should rightly look to the Scottish Parliament and Scottish Government in the first instance to consider and answer this question, it is also fair to ask it of the UK Government, as the Islands Councils have done.

I hope our engagement with the Islands – and our commitment to exploring city deals across the United Kingdom – demonstrates our willingness to consider ideas.

I would not propose to make commitments here today to so called “Islands Acts”. Nor would I ever wish to make such a thing contingent on a particular vote in the referendum.

The issues – grid connections, greater community benefit from oil and gas revenues, international recognition and representation, an economic “islands deal”, reform of the UK-wide Crown Estate, are too serious for “gun-to-head” negotiating tactics.

What I will say is that I understand the case for change. And what I would like to see – and what the Islands Councils are already doing – are proposals for change that are properly evidenced. That they are fully impact assessed so people understand the risks and costs as well as the benefits.

The UK Government stands ready to work in partnership with all Councils where they are making such a case for change.

The Crown Estate (and Coastal Community Fund) I would like to dwell a little longer on one aspect of the Islands Councils ask in relation to The Crown Estate, which I know has been represented here over the past couple of days.

The very fact staff The Crown Estate’s staff are here is something I welcome. My engagement with the Crown Estate goes back several decades, and that didn’t happen then.

While nobody disputes the need for continuous vigilance in relation to its engagement with local government and communities, The Crown Estate has improved considerably over the past couple of years.

In its response to the Scottish Affairs Committee’s update report published on the 7 March, The Crown Estate rightly highlighted the step change in locally driven projects such as Local Management Agreements, which can deliver real economic benefits to coastal communities.

And looking at the facts and figures, you get a sense of an organisation that is increasingly responsive to what Councils and communities in Scotland are asking for.

In 2012/13, The Crown Estate’s:

• revenue in Scotland was £13.7 million – around 4 per cent of the UK total; • capital investment was £9.6m, up 9 per cent on the previous year; • net investment was £4.4 million, up from £2.9 million in 2011/12 • £5.9 million was invested in offshore wind, wave and tidal energy, and Carbon Capture Storage; and • £275,000 was invested in the Glenlivet mountain bike trails and visitor centre (taking total investment to £375,000).

The Crown Estate’s continued openness to suggestions about further change is also welcome. And the Government will closely consider the Scottish Affairs Committee’s latest report and provide a public response to it in due course.

Part of that will likely recognise the considerable benefits of the Government’s Coastal Community Fund.

A fund initiated by my colleague, Danny Alexander, the Chief Secretary to the Treasury and administered by the Big Lottery Fund on behalf of the Department for Communities and Local Government.

The fund is equal to 50% of the gross revenues generated by The Crown Estate’s marine assets and is worth over £29 million beginning in 2014.

That is why the Department for Communities and Local Government was able to announce on the 24 February the provision of £292,000 in funding for the new Adam Smith Exhibition Centre in Kirkcaldy.

This will complement the wider co-funding from partners including Fife Council, Historic Scotland and the Fife Environment Trust for the over £700,000 project.

The new visitor centre will also support three jobs and create at least eight work placements offering certificated training in the tourism, retail and heritage sectors delivered in association with Fife College.

And just last week the Chief Secretary announced £170,000 to develop the Arran Coastal Way. Where improved access benefits visitors, residents, and the farmers and owners who manage the land.

These announcements – alongside eighteen others covering the length and breadth of Scotland’s coastline – are further examples of local government in Scotland, the UK Government and other agencies working together to deliver lasting change to Scotland’s communities.

Referendum and Scottish Government White Paper It would be remiss of me not to recognise that – while many of us get on with the business of governing and delivering local services – there is of course a wider debate happening about whether Scotland should separate from the rest of the UK.

This is a fundamental decision. One from which there is no going back.

But in the context of this debate, it’s sometimes useful to reflect on what we already have in Scotland.

Holyrood is a powerful Parliament with control over more than £27 billion of spending. That is around 60 per cent of public spending in Scotland.

A Parliament that can make and change the law to meet Scottish needs and aspirations on childcare, education, training and skills, enterprise, health and social care, justice and policing, housing, the environment, agriculture, fisheries and rural affairs and the arts, culture and sport.

And of course on local government.

A Parliament that from 2016 will see the most significant devolution of tax powers from Westminster in hundreds of years.

This will result in Holyrood raising one-third of its budget and the creation of a Scottish Rate of Income Tax.

The UK Government has also announced that devolved powers will be extended to enable the Scottish Government to issue its own bonds and borrow for capital investment such as major transport projects, hospitals, schools and flood defences.

Scotland’s devolution settlement has always been flexible.

Since 1999, there has been devolution of power to the Scottish Parliament and Scottish Ministers on issues as diverse as railways, renewable energy and the power to hold this year’s legal, fair and decisive referendum on Scottish independence.

The devolution of further tax powers through the Scotland Act 2012 demonstrates that continuing flexibility.

I have already touched upon the fact that this flexibility must not relate only to the transfer of power from London to Edinburgh.

I read with interest David O’Neill’s comments on 6th March about the ongoing debates about COSLA’s membership. It is not for me to intervene in that discussion.

But I was struck by David’s comments about a national politics in Scotland “focused on a generally centralising agenda”.

The Scottish Government’s White Paper says, “On independence, the structure of local government in Scotland will remain the same”.

It is true that it also goes on to say that “independence will give us the power to embed the role of local authorities in a written constitution and consider the most appropriate responsibilities for local government and communities”.

But of course there is nothing to stop the Scottish Government doing this now.
It is that “gun-to-head” negotiating tactic again. Deliberately implying that only independence allows anything to happen, which simply is not true.

It reflects a lack of vision and imagination, but possibly not surprising given the “centralising agenda” which has been a hallmark of much of the Scottish Government’s time in office.

It is reasonable to respond to this criticism by challenging me to outline my own vision. That is something I find easy to do as a Liberal Democrat.

And I am sure people will forgive me for briefly removing my ministerial hat and replacing it with a political one.

The Liberal Democrat’s Home Rule and Community Rule Commission set out a clear vision on localism and financial autonomy for local government in Scotland in October 2012.   It recommended that:

• local authorities should raise around half of the money they spend locally in order to improve accountability and local power; • that new legislation should prevent Scottish Ministers from linking local authority funding levels to the rates of council tax and other taxes and charges levied by councils; • that the rates of council tax and other locally controlled taxes in each council should be under the control of locally elected councillors, who would be accountable to their electorates.

The Commission’s report went on to recommend a ‘One Scotland Fund’. This would provide a separate funding stream from general Scottish Government funding to local government to address deprivation in each area.

And it recommended that local authorities should set the business rate poundage and retain the entire revenue from business rates in their areas.

And crucially, it recommended the operation of a new assessment for the allocation of funding between local authorities should be based on recommendations to Scottish ministers from a new Local Government Finance Commission.

There were of course further recommendations on local authorities powers and on ways to improve local participation, but I would encourage you to remind yourselves of the report’s content in longer time.

Ming Campbell has also supplemented the original report just this week with a further report setting out a timetable for radical changes to Scotland’s devolution settlement in the event of a No vote.

I will not labour those latest recommendations here other than to say it is a fantastic read!

Conclusion The English – but Royal High School of Edinburgh educated – author, George Borrow, wrote of the “genuine spirit of localism”.

And I hope I have demonstrated the UK Government’s – and Liberal Democrat’s – absolute commitment to working in that spirit with local government in Scotland.

With Scotland’s cities. With her rural communities. With her Islands. And with her devolved Parliament and Government.

It is inevitable the political focus will be on the referendum for the next six months. And I readily understand the desire to use the debate to focus on what is best for local government.

Indeed, that is what individuals and organisations across all walks of life in Scotland are doing.

None of us, however, should be doing this just to be opportunistic.

There would have been a case for reform and renewal in local government in Scotland if there had been no referendum on our future within the United Kingdom.

And the UK Government is committed to an open dialogue with COSLA, individual local authorities and groups of local authorities to reach a consensus. Not on if there should be change but what that change should be.