Scottish devolution: How will it affect each industry sector?

Nathan Hollow

Board Director - Head of Health and Social Care - Head of South West

PLMR Initial reaction to today’s referendum news, on the planning, energy, education, charity and transport sectors.

Health and Social Care – ‘Devo-Max’ is an opportunity to be seized
Nathan Hollow

Nathan Hollow is an Account Manager at PLMR and provides reputation management, media relations and public affairs support to a number of leading health and social care providers who operate across Scotland, England and Wales.

Without doubt, yesterday’s result was an historic moment for Scotland and the whole United Kingdom. For many in the health and social care sector there will be relief at greater stability, particularly for those with operations both sides of the border. However, as with the social care system across the UK, there are still many issues that need to be resolved.

With ‘No’ supporters winning through, all eyes have now turned to the package of further devolution and finance that the Westminster leaders were promising over the closing weeks of the campaign. Greater responsibilities will inevitably mean there’ll be less time and focus on health and social care, which has long been a devolved policy area.

This is bad news for a sector facing an increasing number of challenges. From an ageing population with greater needs to a reduction in local authority funding, many will be concerned that Government will now be able to avoid making the difficult decisions required to address these issues.

However, ‘devo-max’ presents the sector with the opportunity to make social care policy a defining part of the new, more powerful Scottish Government. The ‘Scotland Act’, likely to be passed next year, is anticipated to devolve income tax-raising powers to Holyrood along with greater control over corporation tax and the welfare budget as a whole.

With greater budgetary freedoms, the Scottish Government would have the ability to address existing social care funding issues. By adjusting budgets across departments, or by raising additional money, Holyrood will now have the power and opportunity to shape and fund an integrated social care system that is the envy of those in England and Wales.

This should be a priority for Scottish Care and the whole sector over the coming years. There has never been a better opportunity. There may not be one again.

Politics energised, while the energy sector is stabilised
Nick Albrow PLMR

Nick Albrow is an Account Manager at PLMR and regularly works on delivering public affairs and media relations support to a number of clients in the energy sector.

With politics and democracy re-energised by the referendum, questions remain over how the No vote will affect the energy sector.

The result means there is unlikely to be lengthy wrangling over who owns North Sea gas and oil for the foreseeable future. The revenues from this key industry would have been crucial for the prosperity of an independent Scottish economy, but given it contributed £12.9 billion to the treasury in 2008/09, the UK would have been extremely reluctant to let it go.

Alas, to the disappointment of lawyers, but reassuringly for industry and investors, the years of uncertainty which would come with negotiations have been avoided.

But not everything is clear. The status quo, whereby Scotland receives subsidies from the rest of the UK to develop renewable infrastructure in return for access to gas and oil may yet be disturbed.  Further powers for Holyrood are likely to include more control over taxation, which will inevitably have ramifications for the sector.  Depending on what powers are bestowed upon it, Scotland may, for example, decide to increase taxes on gas which comes through the St Fergus terminal and accounts for 25% of UK supply. Alternatively, an increasingly autonomous England may choose to cut subsidies which fund Scottish renewable projects.

These questions are still to be answered, but the future of the energy sector is far more stable following last night’s result.

Planning – the big impact may be outside Scotland
David Madden

David Madden is the Head of PLMR’s Planning Team and works on a range of client accounts and projects across the UK.

From a planning perspective a ‘Yes’ vote wouldn’t have made a significant difference to the decision-taking process in Scotland.  Scottish local authorities would still be determining planning applications on the ground. And the appeals process north of the border has been in the hands of the Scottish Government for some time now, with Scottish Ministers having ultimate decision-taking powers.

However, the wider fallout from the independence referendum on the planning system across the UK, particularly in cities, could be huge.  Responding to the ‘No’ vote this morning, David Cameron spoke of a ‘great opportunity’ to ‘improve governance in our United Kingdom’.  He has asked William Hague to draw up plans for England, Wales and Northern Ireland to be able to vote on a range of key issues, in tandem with the settlement for Scotland.

Localism – devolving power from central government to local communities, has long been a Conservative aspiration.  Crucially, Cameron made specific reference to ‘empowering our great cities’.  If that means following the precedent set by London, where the Mayor has gained ever more planning powers since the role came into being, we could be looking at a seismic shift in the balance of power for the country’s major conurbations.  Will this be good for development, and will we see a similar power-shift to the regions?  Only time will tell.

Charities – consider stronger Scottish presence
Zoe White

Zoe White provides public affairs and media relations support for a number of third sector clients. She has helped to secured national, local and sectoral coverage for various charities, as well as providing public affairs support for the campaign to introduce plain cigarette packaging.

Although the charity sector will feel no immediate impact of the ‘No’ vote in the Scottish Referendum, there are still issues which will need to be considered.

In a last minute move to halt the momentum of the ‘Yes’ campaign, the leaders of the UK’s three main parties issued a vow which promised more devolved powers for Scotland, should they vote ‘No’. These include granting the Scottish Parliament the final say on how much is spent on the NHS in Scotland – which will have a bearing on activities of all health-related charities.

While UK Charity Law will remain unaffected, a more powerful Scottish Parliament will mean that MSPs should take an increasingly important role in the public relations strategies of charities operating in the UK. Culturally, Holyrood is a different political beast to Westminster, and increasing devolution means charities will need to take this into account. It will no longer be enough to prioritise engaging Scottish MPs; MSPs have elbowed their way to the foreground.

The offer of ‘devo-max’ to Scotland also has implications for England. There have already been calls for ‘English votes for English laws’ – this debate about where power lies in the UK is one the charity sector needs to keep a close eye on.

Amidst ongoing discussions about further devolution for both Scotland and England, charities may be looking to set up offices in both countries, to ensure they have a ubiquitously strong presence, regardless of the final settlement.

Education – business as usual

Tim Knight is a Senior Account Manager at PLMR, who provides communications support to a range of clients across the education sector, from Academy Trusts to primary and secondary schools.

The 1998  Scotland Act, which established the Scottish Parliament, gave the new institution political responsibility education at all levels. Since then, Scotland has trodden a very different path to the rest of the UK. Scotland shunned Westminster-driven reforms such as the introduction of Free Schools and Academies, and did not introduce tuition fees for university students.

In the event of a yes vote, the SNP had promised to write free university education into the constitution, demonstrating the significance afforded to education in the party’s thinking. It had also controversially proposed to charge UK students to study at Scottish universities, but not those from other EU countries, but the legality of this move under European law had been questioned.

Regardless, with the union now secured, any immediate change to the education sector in Scotland is unlikely, and it should be business as usual.  Whilst defeat in the referendum will be hard to swallow, SNP education leaders may be privately pleased that they can continue to use UK cash to fund higher education in Scotland, rather than having to fill a possible shortfall in funding that may have emerged as a result of independence.

Transport – keep an eye on funding
James Ford PLMR
James Ford is a Senior Consultant at PLMR, specialising in transport, environment and digital policy. He was formerly the Adviser to the Digital Chamber of Commerce at the London Chamber of Commerce and an aide to Mayor of London Boris Johnson.

The No vote on Scottish independence will have little immediate impact on transport policy. Transport is already a devolved matter north of the border, with Transport Scotland as the executive agency overseeing services and deciding who is awarded rail contracts. Cross-border services, such as the East and West Coast main lines, are likely to continue as before (though now without the prospect of having to handle passport control arrangements with an independent Scotland).

What might change is the funding arrangements that underpin both the operation of existing services and investment in new infrastructure. One of the historic arguments in favour of Scotland’s generous funding settlement has also been the increased costs incurred in providing public services in a country that is vast and lightly populated with a number of remote areas and islands.

Whilst ‘the vow’ that party leaders have made protects the Barnett Formula, it is worth noting that one of its biggest critics on the eve of the referendum was Claire Perry, the junior minister for the railways. With their own tax raising powers under ‘devo-max’, it is possible that the Scottish Government may seek to invest more in public services – however, transport is unlikely to top the list of priorities compared to other public services like health and education.

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