ippr north

Scotland's Choice

Next month sees the Scottish Parliament’s third election since devolution in 1999, while almost to the day, the Union also celebrates its third centenary.  The question on everybody’s lips is whether Scotland is about to take a leap towards independence thus ending the Union with England.

Previously I've mentioned our State of the Union project, which looks at the prospects for the Union between England and Scotland in the 21st Century, and this of course remains a hot topic as the campaigns for the Scottish Parliamentary elections get underway.  The Scottish Nationalist Party (SNP) are doing well in the polls, and look set to be the largest party in the Scottish Parliament after the elections - but not large enough to govern without the support of the Liberal Democrats.

However this prospect is by no means guaranteed and will require some tough negotiations, not least because the Lib Dems have publicly declared themselves against holding a referendum on independence in the next four years, a central plank of SNP policy.  More recently the Lib Dems have floated the idea of more powers for the Parliament, which could be a way for both parties to kick the independence issue into the long grass.  That might not be a bad idea for the SNP as recent polls, suggest that support for the party is not translating into support for independence, which currently stands at 27%.

Much of the debate about unionism and nationalism revolves around the performance of the Scottish economy, which has become one of the central issues in the election campaign, but the argument in many ways remains rather superficial.  Some nationalists claim an independent Scotland that cuts corporation tax will be the answer to all Scotland’s economic problems.  On the other side some Unionists dangle the threat of removing the fiscal transfers that Scotland currently enjoys, rather than seeking to positively address the underlying problems that hold the Scottish economy back.  And never far away is the debate about whether an independent Scotland would be able to balance its books, this largely focuses around the value and ownership of North Sea oil - although it hardly seems the most sustainable basis for a successful long-term economy.

Our seminar last week tried to get under the surface of these debates by looking at how interdependent our economies are, considering trade and migration between the two nations and what the implications are for the Union.  We also looked at the fiscal debate, and possible models for replacing the Barnett Formula.  This is work that we will be developing over the next few months, and no matter who wins the Scottish elections, these are not issues that will go away.

Lyons' Roar?

The remit has been extended several times, and publication was originally scheduled for December 2005, but finally, yesterday, the long awaited Lyons Inquiry into the future of local government was published.

Most of the coverage so far has been about the recommendations regarding the council tax.  In many ways this is understandable. Council tax is certainly unpopular and regressive, and Lyons’ recommendations to make council tax simpler and fairer must be implemented by central government.

However, Lyons also has another story to tell, one that so far has been less reported.  His final report takes a balanced and considered view of the risks and opportunities associated with local flexibility.  We at ippr north know from our work on devolution that while on the one hand people want greater local flexibility, they also want common minimum standards of service delivery.  Lyons recognises the need to combine light touch common standards with local flexibility.

This is the right approach but it presents serious challenges to both central government and local government.  Central government must continue to loosen its stifling target and control culture – and once loosened departments must resist the temptation to allow ring fencing and restrictive targets and performance management to creep back in.  That is not to say there is no place for targets and performance management, only that it is time there was a far more grown up relationship between central and local government.

For local authorities too this presents challenges.  They must respond to this opportunity and be less risk averse if the innovation and creativity that greater flexibility can bring is to be realised.  They must also be more outward-looking, embracing their role in reconnecting people to politics.  The best of local government already does this, but it is time to see more of it.

The Sand Timer

Where you live can affect your likelihood of being in work and, to some extent, we do live by post code lottery.  Geographical variations of worklessness throughout the UK underline the need to look at what more can be achieved at a local labour market levels.  This certainly shouldn't mean an end to common standards of welfare provision but should be about setting minimum standards centrally and giving local areas the flexibility to deliver in the most appropriate way.

Last week we published The Sand Timer which looked at the remaining challenges for reaching full employment in the North West of England and on Friday held an event in Manchester looking at these issues with the Secretary of State for Work and Pensions, John Hutton.  One of the themes of the conference, and our research, was greater devolution within the welfare to work system; empowering local areas to better understand and respond to their local labour market conditions.

There has also been much talk of benefit reform and the next steps for welfare to work over the last few days in response to the publication of David Freud's review of future welfare to work options.  These debates are critical for this government in light of its aspiration to have 80% of the population in work, and it's no surprise that Blair and Brown are standing as one on this issue. For a progressive think tank such as ourselves full employment is not just about economic efficiency and making sure that no talent is wasted, it's also about work as the best route out of poverty. Also let's not forget that working increases levels of wellbeing, self-esteem and confidence.

Our research (alongside anecdotal evidence from our conference) shows the ability to coordinate activity locally is often constrained by a lack of coordination centrally. So while Freud's discussion of contracting, personalisation, rights and responsibilities in the benefits system and the potential merits of a single benefit are all important, they are not the whole picture.  Undoubtedly great strides have been made in improving the employment rate in recent years, and while we are closer to full employment, we are still not close enough.