Jimmy Reid Foundation makes the case for greater local government funding

New report commissioned by Unison highlights importance of negotiations between the Scottish Government and the Scottish Greens

A NEW REPORT from the Jimmy Reid Foundation (JRF) has advocated the Scottish Government’s public sector pay rises require greater funding for local government.

Commissioned by the trade union Unison and undertaken by Professor Mike Danson and Dr Rebecca Stirzaker of Heriot-Watt University, Professor Christine Cooper of the University of Strathclyde and Dr Geoff Whittam of Glasgow Caledonian University, ‘The contribution local government makes to our communities and local economies’ comes at a crucial point in the process of finalising the Scottish budget for 2018/19.

The report argues that the one per cent pay cap on public sector pay increases imposed by the UK Government has distorted labour markets, is unfair of those who deliver public services, and has impacted the ability of public sector employers to attract and retain staff.

READ MORE: Common Weal comments on Scottish Draft Budget

The Scottish Government has announced that it will deliver a three per cent pay rise for all public sector workers earning less than £30,000 and a two per cent pay rise for those earning more than £30,000.

However, the new JRF report argues that these increases, while they would have expansionary effects on the Scottish economy, can only be delivered affordably with a further increase in funding for local government, such as is currently being pursued by the Scottish Greens.

The report also oncludes that the net costs to both the Scottish and UK budgets of including local government workers in the Scottish Public Sector Pay Policy, under which the announced increases are codified, would be roughly £45m. While the report acknowledges that this would add to the costs of the Scottish budget, incomes and gross value added (GVA) would increase by roughly £70m.

Conversely, equivalent tax cuts for higher income groups, as traditionally favoured by the Conservative Party, would lead to further austerity cuts, job losses and a fall in incomes.

Commenting on the report, lead author Mike Danson, Professor of Enterprise Policy at Heriot-Watt University, said: “Boosting the wages of lower paid public sector workers can ameliorate austerity cuts and generate expansion in the Scottish economy more effectively and efficiently than cutting taxes for the rich and powerful or building major infrastructure projects.”

“Local government has become the poor relation of the public sector in Scotland.” Jimmy Reid Foundation director Professor Gregor Gall

Professor Gregor Gall, director of the Jimmy Reid Foundation, also welcomed the report, added: “Local government has become the poor relation of the public sector in Scotland. Its workers have suffered continual job losses and real term pay cuts.

“This Scottish Budget, with the new tax raising powers available to the Scottish Government, is a big opportunity for the SNP to make good on its claim to be a left-of-centre social democratic party. Claiming to be so dictates that local government is now properly funded for its jobs, workers’ pay levels and services to the public.

“This report gives the SNP all the arguments and evidence it will ever need to take this important step.”

Earlier this week, the Scottish Parliament’s local government committee stated in a report that “the outcome of the Scottish Government’s public sector pay policy creates an expectation as to what local government workers might receive”.

“Local government needs to be in a position of knowing that they have the resources available to make a fair pay offer.” Scottish Green co-convener Patrick Harvie

Last week, the Scottish Government backed a Green amendment calling for additional funds in the draft budget to protect frontline services and local councils.

Scottish Green co-convener Patrick Harvie commented on the ongoing budget negotiations, saying: “Local government needs to be in a position of knowing that they have the resources available to make a fair pay offer for all those people.

“A lot of councils are budgeting for something like a two per cent pay increase. Well, if they want to go that little bit further and reach inflation, then there’s got to be a fair contribution.”

Picture courtesy of the Scottish Government

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