Working in unison only way to fight Osborne austerity

It’s time for a national conversation on the UK government’s plans for cutbacks, argues Dave Watson
George Osborne has presided over an age of austerity. Picture: JPGeorge Osborne has presided over an age of austerity. Picture: JP
George Osborne has presided over an age of austerity. Picture: JP

The UK government’s austerity programme is deeply damaging to public services and those who rely on them, but Scotland can take action to limit some of the damage.

The think-tank IPPR Scotland has calculated that the poorest households will lose more than £500 per year through Chancellor George Osborne’s emergency summer budget cuts, with lone parents losing more than £1,500 on average. Yet the top 20 per cent of households gain £110 a year. Meanwhile, Scottish public services face a further £2 billion of cuts, with another 30,000 jobs expected to go, following on from more than 50,000 since 2009.

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Details will be clearer after the UK Autumn Statement, but we know that these budget cuts will have a devastating impact on services which are particularly important for those on lower incomes.

The Scottish Government, councils and health boards need to look at everything within their power to mitigate against the worst effects.

Unison Scotland has published a new booklet, Combating Austerity, which offers a range of possible initiatives which could potentially free up billions of pounds.

Our proposals include buying out the contracts of, or refinancing, expensive PPP/PFI deals, which could save several billion pounds; refinancing council and other public bodies’ debt, to take advantage of extremely low interest rates; imaginative use of council prudential borrowing and bonds; and more effective use of local authority pension funds.

The Scottish Government should be preparing, with the Scottish Futures Trust, a major programme of buying out PPP/PFI contracts.

The new health and care partnerships should be looking at this for shared infrastructure, instead of the costly use of the five hubco PPP schemes. Yes, contrary to myth we still use PPP in Scotland.

We argue that Scottish councils could collaborate in using bonds to finance borrowing, rather than routinely going through the traditional borrowing route, the Public Works Loan Board (PWLB). In England, the new Municipal Bonds Agency, set up by around 60 local authorities, aims to arrange loans at cheaper rates than the PWLB, not just for investment in economic development, housing and similar projects, but also to refinance existing borrowing.

We have called for the Scottish Government to relax the repayment of funds regulations, something it consulted on several years ago. We also suggest councils consider restructuring loans over a longer period to bring down repayment costs.

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And far more can be done with local authority pension funds to finance infrastructure, including housing. Strathclyde Pension Fund has agreed 12 separate infrastructure and related investments of around £275 million for projects across the UK, with a significant number in Scotland.

Unison wants to see investment regulations relaxed to give greater flexibility, and potentially legislation on fiduciary duty, which is seen as more of a constraint than it actually is, but may require action to deliver the changes. Pension funds also should demand greater transparency over investment management fees.

None of these initiatives obviates the need to politically challenge austerity at every opportunity. However, we hope our signposts will be the start of a national conversation on limiting the damage in every feasible way.

• Dave Watson is head of bargaining and campaigns at Unison