Reform Scotland

Manifesto Critique article

One of the main focuses of this election campaign has been over whether, and how, to use the income tax powers that are being devolved to Scotland from 2017/18.  Reform Scotland has argued that we should leave this well alone.  Income tax will account for 71% of the tax income controlled by the Scottish Parliament and, as a result, is a blunt tool that doesn’t offer the opportunity to introduce coherent tax reform that can encourage economic growth.  This is why we have consistently argued that far more fiscal powers are devolved to Holyrood to give ministers the breadth of tools necessary to do the job effectively.

For this reason, income tax has not been the main issue for Reform Scotland during this election campaign.  As further powers for the Scottish Parliament isn’t something that can be decided in 2016, our manifesto instead focused on what powers we have and what can be done in the next five years, with a focus on key themes of greater devolution from Holyrood, choice and diversity.

As part of our review of party manifestos, we have published a grid looking at how each of the main parties has responded to the 16 key policy areas that Reform Scotland has identified based on our published research.    It is our intention to use this as a starting point and measure what progress the next Scottish Government makes towards meeting our policy recommendations.

It is clear from the party manifestos that local government reform will be a key issue for the next parliament.  The Greens, Lib Dems and Conservatives are all critical of powers being taken away from local government – a stance we would agree with, though it is disappointing how few specific proposals there are to reverse this situation.    The SNP talk about examining how greater powers can be passed down with regards to schools and health boards, and this too has to be welcomed.

Similarly, we would welcome, as steps in the right direction, education policies which seek to give greater autonomy to schools and parents.

Education and local government reform look set to be two key policy areas after the election and we look forward to engaging with that reform process.  However, there are other areas in need of a fresh approach.

For example, while most parties talk about wanting to increase local accountability and autonomy, none of the parties highlight the problem of quangos.  The growth of quangos has reduced accountability, with less direct ministerial involvement and has meant significant expenditure streams are largely invisible.  Quangos are not sufficiently accountable to the Scottish Parliament or the public.  We believe that all quango functions should be transferred to either government departments, independent bodies or devolved to local authorities.  So this represents a huge opportunity to improve accountability and transparency, but also pass more powers back to our local authorities.

Another issue not touched on by any of the parties is our view that there should be one government department responsible for both the new tax and welfare powers due to be devolved.   This may at first seem like a small administrative point, but it is about looking to create a better, more coherent and transparent system and not simply replicating what happens at Westminster.   At Westminster there is the Department for Work and Pensions (DWP) and Her Majesty’s Revenue & Customs (HMRC).  The former is responsible for welfare and the latter for taxation.  But it’s not as simple as that since child benefit has switched to being an HMRC responsibility along with tax credits, though both of those benefits interact with others that lie with the DWP.  Some benefits, like carer’s allowance which is due to be devolved, are taxable, but the DWP can’t tax benefits at source.  Figures on benefit expenditure are often opaque where two departments are involved and produce different figures.    There are clear overlaps with these roles.  So instead of simply following the Westminster model, there is an opportunity to look to see if Scotland can do things differently.  Surely we can come up with a better system and this at least should be considered.  Isn’t that the point of devolution?

These are two administrative policy areas we have highlighted, but both could lead to more accountable, transparent and efficient government.  That is something well worth aiming for.