Examination of Witnesses (Questions 800
- 813)
MONDAY 26 NOVEMBER 2007
COUNCILLOR HARRY
MCGUIGAN,
MR JON
HARRIS, MR
RICHARD CAIRNS,
MR BRIAN
BARKER, MR
JIM MCCROSSAN
AND MR
MATTHEW CRIGHTON
Q800 Mr Davidson:
Could I apologise, first of all, for missing the beginning of
evidence, I had something in my constituency. Could I pick up
the question of rural areas. My experience was that the rural
areas were making political choices about the level of services,
particularly those where they were run by independents, or Tories
pretending to be independents, and they were always deliberately
choosing to have low council tax or low charges and they were
willing to accept the fact that meant there was low service provision
and, therefore, there was not the Take Up campaigns, the communities
work staff or payments for bus routes and so on. To some extent
the fact that poverty is not being tackled in the rural areas
is as a result of the political choices that have been made. Therefore,
in a sense, it is difficult to see how we can intervene in something
like that.
Mr McCrossan: I think, first,
I would say that is obviously a political question, I am here
as an officer. To make the issue a bit clearer because certainly
in Argyll and Bute there was a kind of overhang from the Strathclyde
days, as I am sure you will be aware yourself, of a level of services,
it was undoubtedly higher in the level of services that were there
in county days. That is pretty well maintained now, I would have
said, but we are now moving into an area where a lot of the ring-fenced
funding that underpinned a lot of that is disappearing under the
new local government set-up with the Scottish Government and it
will be interesting to keep an eye on that issue to see if that
begins to change. I think it is also important to say, though,
there are some things that are ineradicably much more expensive
and it is harder to target viable services because of numbers,
there are genuine underlying problems about that. At the end of
the day, you are absolutely right, there are issues about what
you are prepared to spend on.
Councillor McGuigan: I want to
say that we have to bear in mind there are these high costs as
far as the rural situation is concerned and it is there simply
because of the nature of the thing, but it could be argued, of
course, that the political representation has not been robust
enough over the years. Those unique types of costs cannot really
be met by the people living in the particular area. We cannot
say to them, "Patient, help yourself", but maybe there
should have been a bigger recognition from central government
in allocating resources to alleviate some of the difficulties
and problems that are faced there.
Q801 Mr Davidson:
I cannot remember offhand what the product of a premium council
tax is for, say, Argyll and Bute and what the difference is between
the level of council tax at the moment between Glasgow and Argyll.
If Argyll's tax was at the same level as Glasgow's, how much extra
money would you have to spend on these things and, therefore,
to what extent are you in a pit that you have dug yourselves?
Mr McCrossan: I am not sure what
the difference is. I would be surprised if it was a huge difference,
to be honest, but I do not know.
Mr Barker: I think there is an
element of where you have deprivation that is more concentrated
in urban areas, then the action to address that is going to be
more visible. Where you have got distributed deprivation you are
not going to have drop-in centres, particular initiatives in particular
areas, it is much more dispersed activity that quite often is
in conjunction with other service provision. In terms of the services
that Jim is responsible for, there is a range of things that will
be addressed and quite often you are targeting individuals within
communities rather than groups as communities as a whole, so there
is the activity there, but the targeting is much harder because
you are dealing with a distributed population, whereas if you
have got a concentrated population it is easier in terms of the
targeting and the action that is being taken is more visible.
Mr McCrossan: There is no argument
about the scale of the problems in Glasgow, for instance. I do
not think you will find people from rural areas coming and saying,
"You shouldn't be spending that money there, you should be
spending it on us". It is just different.
Q802 Mr Davidson:
I remember when Strathclyde was established that we had things
like Take Up campaigns for benefits and so on in some of the cities
and Argyll never did that because they were not basically willing
to pay for it, and there were rural parts of Lanarkshire that
had the same sort of reality difficulties but, because there was
a difference of control, they were willing to pay for it. I am
wondering the extent to which some of these issues are simply
just hangovers from the days of miserable councils and whether
or not there is a mechanism actually there to deal with them,
but there is not a will to deal with them. If that is the position,
then it is difficult for us to see how we ought to be addressing
these questions and it seems in many ways that is not something
that we ought to be getting involved in, that is really for a
council to be dealing with.
Mr Harris: I understand what you
are saying. Certainly, in terms of welfare benefits, there was
a particular issue in terms of rural areas where people were maybe
not so willing to come forward where they felt they would be known
and they did not really want to share that situation, the same
as I have seen children in difficult situations because of domestic
abuse. If you are living in an island in the Western Isles, how
would you get access to services? There are particular issues
there which sometimes inhibit people coming forward.
Mr McCrossan: There has been a
big investment in benefits uptake in the last ten, 12 years.
Q803 Mr Davidson:
Could I ask a point about fuel poverty, and that is the extent
to which local authorities can play a role in eradicating fuel
poverty?
Councillor McGuigan: I think one
of the things that local authorities can and will continue to
do is to make the case for local authorities to get back into
the business of building good housing for our people, houses that
are well insulated and efficient as far as heat loss is concerned,
that is crucial. It is also important to educate our people to
make our people more conscious about the whole issue of fuel poverty.
A lady that came to my surgery just a few weeks ago was telling
me—her case was very serious—she does not use the
cooker, she brings in cooked food. That is a scathing criticism
of fuel poverty and that is fuel poverty that is associated with
the costs of utilities, gas and electricity. She can only afford
to put the washing machine on twice a week; there are clearly
hygiene issues. I think we have to get in about that, as local
authorities trying to ensure we provide the support arrangements
so the housing stock we have is housing stock which does assist
in meeting all the needs of our people. It is important that we
identify those particular groups within our communities that have
got specific needs, the elderly who can be extremely vulnerable
to cold and so on, and, sadly, we still have not escaped from
the fuel poverty that, maybe, was quite common in the 1950s and
1960s. I think Billy Connolly made the comment about the coat
being over the bed and the coat was there to keep the "wains"
warm at night. That is still a reality there. There are big, big
issues that need to be tackled and I think local authorities have
to continue working, as they are at the moment, to tackle it.
There has got to be a responsibility also on social landlords
to make sure that they play a role in that, that it is not simply
left to the local authority. That is the way we have got to work,
as a set of agencies trying to deal with a problem but communities
have to also play a role in this, they have got to flag up the
issues as they see as being deficient, either for them collectively
or for particular individuals. That is something we are not very
good at, listening to the voice of the communities themselves.
Q804 Mr Davidson:
In terms of the councils, it is mainly a housing stock issue.
That is an issue really for the Scottish Parliament rather than
for us directly, is it not? Where we might have controlled housing
once, we do not control it now.
Mr Barker: I think there might
be an issue in terms of the energy markets and things like that,
because in rural areas, in Argyll and Bute, less than half the
population live in a town, so the other half of the population
either heat their house with electricity, oil or solid fuel and
the choices are not there. The circumstances in which the housing
is are usually more exposed, you do not have the sort of heat
island effect of urban areas so the amount of heat required is
more and the fuel that you are using costs more. There are things
that relate to particular circumstances, but there are things
like the energy markets.
Q805 Mr Davidson:
Is that local energy markets as distinct from the national market?
Mr Barker: In terms of heating
my house with oil it is linked straight into the markets. The
fact that locally you pay a bit more per litre of fuel because
there are extra transport costs involved is a factor, but there
is still an issue in terms of how energy policy works at a UK
level.
Mr Cairns: Could I make a number
of points around this, some of them on behalf of my rural colleagues
and they may correct me if I get any of this wrong because, as
you know, I am not from a rural area. Despite global warming,
the more remote parts of the country tend to be colder and, therefore,
the fuel requirement over any given calendar year is likely to
be higher. The cheapest source of heating is probably natural
gas and there are large parts of rural communities that are not
on the gas grid and, as a consequence of that, they are then forced
to use more expensive sources of fuel. The other area where I
think we have to be aware of how poverty acts in an unequal manner
in the fuel market is that most of the means of charging for energy
are regressive. Those of us who have relatively high disposable
incomes and regular incomes can afford to enter into charging
arrangements with utility suppliers that cost us less than the
same fuel purchased by a relatively poor person. Power cards and
other arrangements of this nature are much more expensive per
unit of energy than the kind of arrangements that some of us might
enjoy. There is therefore a role for local authorities around
the whole financial inclusion, financial awareness and financial
competence agenda to help people to recognise what those additional
charges are and look at mechanisms whereby we help those on the
lowest incomes, who ironically are paying the highest prices in
real terms and by far the highest proportion of disposable income
for fuel, and try and get them into arrangements where there is
a much more equitable means of them buying their energy. That
is an area where local authorities are doing some exemplary work
and need encouragement and support to do more.
Q806 Mr Davidson:
Are any of those issues where you are being held back from doing
things you would want to do as a result of anything that we have
done nationally? I need you to tell me, "If only you changed
the rules on X, we would be able to do A, B, C." There is
nothing you are consciously aware of that you would ask us, given
this opportunity, to do in relation to fuel poverty?
Councillor McGuigan: I think one
of the things you possibly can do is to encourage your banking
colleagues to make arrangements available to people on very low
incomes to enable them to access the very type of opportunities
and facilities that Richard has been referring to. I do not know
what mechanism can be used to do that, it is certainly something
that may be looked at.
Mr Cairns: There is a couple of
things arising out of what I said earlier. I am not an expert
on the energy markets, but I would imagine if one were to scrutinise
how the energy markets are regulated in this country, the level
of capital investment that utilities companies are required to
make and how inclusive they are required to be about the access
to particularly the gas grid, that may be worthy of explanation.
That explanation might conclude that there is no case to answer
or no change required, but I think it may be worthy of explanation.
The extent to which there are additional benefits payments and
cold weather allowances for particular parts of the country might
merit some examination. Again, I do not know enough about the
subject to be confident there is a concrete issue, but it might
merit examination. The final one would be around looking at whether
the financial information and financial inclusion processes that
we are currently trying to put in place are receiving sufficient
national government support. Again, I would not want to say definitively
that they are not, but I think there is a question to be posed
there and examination worthy of some effort.
Q807 Mr Devine:
I wonder if you share my concern about the Scottish Government
initiative with regards to replacing heating systems. There are
just under 11,000 pensioners at the moment whose heating systems
have been condemned. I have got a few constituents who have no
heating, no hot water, no cooking facilities. Scottish Gas have
come in, condemned their system, written to my constituents in
September to tell them that they are not going to get their replacement
until April and I now have another constituent who I saw a few
weeks ago who has now been told that she will not get a replacement
until June. Effectively, we are looking at potentially 11,000
pensioners, some couples, who are going to face the winter without
any heating. I know the Scottish Government committed seven million
in the last week, but I wonder if you have had this highlighted
in your surgeries?
Councillor McGuigan: It has certainly
been brought to my attention over the last two or three years
and it is a very real problem, there is no question about it.
It is about identifying and releasing the resources to enable
us to tackle that.
Q808 Mr Devine:
Is this being shared by all?
Mr Cairns: I have heard it anecdotally
and I have also heard anecdotally that it is, again, the poorer
communities that are lagging further behind. My colleagues from
Argyll and Bute might have a view to add to this, but I would
also imagine that if you are a gas contractor—because this
work is being done by contractors—and you have targets to
meet for the refurbishment of central heating systems, that contractor
is going to meet more of those targets which are geographically
closer together and he is going to find it harder and more expensive
to meet those targets where they are geographically more distributed.
You do the maths.
Q809 Mr Devine:
We will obviously ask the Minister, but astonishingly I heard
that priorities are being given to the islands but it may obviously
not be the case, I do not know.
Mr Barker: There is an issue in
terms of island communities in terms of the cost of fuel, but
also the cost of any improvements that certainly are much higher
than you would get in terms of any equivalent in an urban area.
It is because of the nature of the fuel and the costs of any work
involved in those sorts of areas.
Q810 Chairman:
Irresponsible lending and debt is a major contributory factor
to poverty. Citizens Advice Bureaux witnesses told us that one
in five cases they are dealing with are directly connected to
debt. You probably will be aware that our financial institutions,
banks and unauthorised lending agencies are charging up to 300%
interest rates to the people they advertise they are going to
sort out all their financial problems and then people borrow the
money from them, sometimes they borrow £1,000 and they end
up paying £10,000 or even £15,000 and in some cases
they are put in the position where they have to sell their belongings
and houses. What do you think the Government should be doing to
tackle these greedy institutions?
Councillor McGuigan: I think there
is legislation in place that can tackle that and there needs to
be enforcement of some of that legislation to ensure that, because
for many people who are below the poverty line, the only relief
that sometimes they can get—and it is a short-term relief—is
by going to unscrupulous money lenders. It provides relief for
a short period of time and then, of course, you get the aggressive
creditor coming and that creates even greater pressure on that
household and that family. I think we should always be reviewing
legislation as it relates to that and we should be seeking to
tighten up in every way that we can and ensuring the enforcement
actions which are necessary follow.
Q811 Chairman:
It is hard to believe that when the base rate in the country is
6%, five and a half per cent, the financial institutions will
be charging 40% and 50% interest rates, and unscrupulous money
lenders are charging up to 300%, I do not know. Do you have any
view on how we should be tackling it so we can have a real grip
on them?
Mr Cairns: I have a long answer
and a short answer. The short answer is I would at some point
like to enter into the record or provide the Committee with information
about the Glasgow advice and information network in a project
called "Scot Cash", which you may or may not be familiar
with.
Q812 Chairman:
We have had a meeting with them.
Mr Cairns: That is excellent.
The Scot Cash project has, in effect, created a community development
financial institution, a community bank, which is designed to
provide access to banking facilities for people who are referred
to as "the unbanked". As a consequence of that access
to banking facilities and, aligned with that, a financial advice
service which ensures people access loans where appropriate and
other forms of finance where appropriate by wrapping these things
together, in effect what you put in the market place is an alternative
to the very easily accessible but very, very expensive, less conventional
means of credit. Even the legal shopper check, Provident-type
model, is prohibitively expensive but is seductively accessible
in poor communities. It is marketed in exactly that way, leaving
aside the loan sharking mechanism. I think if there is anything
that you could do, one would be to enter this kind of project
into the record and note how successful it appears to be. I am
going to give you some facts on how successful it appears to be
thus far, but we have to look at the extent to which the Government
is able to provide further backing for this kind of thing as an
alternative, particularly as an alternative to loan sharking which
is clearly an illegal activity. In relation to Scot Cash—and
I checked this morning because I thought you might be interested
in this—amongst other interesting things the project has
raised £800,000 of its capital from the Royal Bank, which
is commendable in itself. We have made progress in getting the
conventional banking sector to engage in this process. The project
also enjoys what is called "trusted partner status"
with the Royal Bank, somebody on low or almost no income can go
to a Scot Cash branch and with assistance from them for the first
time in their lives often can open a bank account there with the
Royal Bank, they do not have to go into the Royal Bank or premises
of that nature. When they do that they receive customised financial
advice, unlike opening an account at a bank they get a one-to-one
consultation with somebody who looks at their overall financial
circumstances and helps them work out the best means of managing
whatever income they have. Since February 2007, Scot Cash has
opened 116 bank accounts for people who previously had no banking
arrangement whatsoever, that is 116 people who potentially, therefore,
have slipped out of the grasp of less preferable forms of finance
and 65 people in addition to that have now opened savings accounts
with credit unions. There is progress here and good practice here.
Again, it might be an area for examination to see what the Government
can do to support and extend that kind of good practice.
Q813 Chairman:
Could I thank the witnesses for their attendance this afternoon.
Before I close the meeting, would you like to say anything in
conclusion, perhaps on an area that we have not covered in our
questions?
Councillor McGuigan: I would like
to thank you, Chairman. It has been a very interesting experience
for myself and I am sure for others here and it is good to have
been subjected to the very searching questions that have been
put to us. I re-emphasise again I do hope that we will see a closer
relationship coming into operation between central government,
the Scottish Government and local government. It is not necessarily
a panacea but the way in which we should all be aspiring to deliver
a better Scotland.
Chairman: Thank you very much once again.
I am sure your evidence will be very helpful to us when we compile
our report. Certainly we will send you a copy of the report when
it is ready to be published. Thank you very much.
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