Jonathon Shafi: We can all agree that Scottish politics lacks thinkers

Scotland is in many ways a divided country, but it is fair to say that after 25 years of devolution, there is a degree of consensus about this point.

What is lacking is a coherent analysis of why this might be the case. Some point to the ills of social media, or the impact of polarisation around myriad “culture war” issues.

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Others point to the apparent lack of political will – perhaps courage – to see through pioneering reforms. But there is another, more compelling, view that deserves more scrutiny and investigation – that as the public realm has receded, governance has been reduced to the administration of outsourcing to private consultancy firms and the corporate lobby.

This process has intensified over the years, steadily carving out whatever limited democratic input existed previously. The result is a breakdown in the policy-making process and an accelerated decline in the quality and robustness of political life. Far from the goal of a “people’s parliament”, government is embedded with a culture based on the corporate capture of affairs.

We can cycle through numerous examples to make the case.

In 2017, Nicola Sturgeon (above) announced the setting up of a national energy company. While the policy grabbed the headlines, the idea was effectively shelved. Years of inaction passed before SNP members once more raised the issue. In 2021, they voted overwhelmingly for the policy at their conference. Still, it was dumped.

Meanwhile, The Ferret revealed that in 2020 that government ministers were having meetings, outside of the public record, with big businesses seeking to cash in on Scotland’s renewables industry. The Scottish Government would launch a “green investment portfolio” worth £3 billion of Scottish green assets.

This package, a core element in Scotland’s future economic base, is being sold off to private and foreign capital. In addition, the ScotWind auction has resulted in large tracts of the renewable wind energy grid being sold at rock-bottom prices to the likes of Shell and BP.

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Billions in profits will be lost to the nation every year, while Scotland’s six offshore wind farms paid a derisory £150,000 to nearby communities in the 12 months between May 2021-22. Met with similar headlines, the Scottish National Investment Bank (SNIB) was meant to be an intervention by government to act as a countermeasure to the failures of the market. But it has, to be generous, a dubious record.

For instance, tourism technology business Travelnest Ltd, a company which specialises in providing mechanisms for holiday homeowners to list and manage their properties, received an initial £3 million in funding from the SNIB.

The Economic Recovery Group, led by former Tesco Bank chief executive and special adviser to Sturgeon on the SNIB, Benny Higgins, advises a post-pandemic recovery strategy which further weakens any semblance of democratic control over the public bank.

The report produced by the government-appointed group advocates for the Scottish Government to “build its professional capability to manage ownership stakes in private businesses” by hiring business executives from the private sector operating “independently” of ministers.

As economist George Kerevan (above) noted: “The recovery plan involves a major increase in capital investment funded by a public bank, with the money going to private companies involved in joint enterprises with the state. Who will do the investing by the state? Not ministers or MSPs.”

The Economic Recovery Group was superseded by the Scottish Government’s National Strategy for Economic Transformation. It appears to have achieved at least one of its “key commitments” in the form of establishing the role of a “chief entrepreneur”.

The role is handsomely remunerated, at £190,000 a year, for working eight days a month. The position is occupied by a former director of Travelnest Ltd, and current director of Ipso Facto Management Ltd.

In 2020, Kate Forbes set up the Scottish Technology Ecosystem Review. As ever, the process was outsourced, and a contract worth £100,000 went to Ipso Facto Management Ltd. How’s that for a circular economy?

Speaking of which, Lorna Slater (above) signed off on one of Scotland’s largest PFI [private finance initiative] deals in the form of NatureScot – a £2bn partnership on Scottish forestry management. Hamden & Co, a bank, will finance the initiative, while “global impact” firm Palladium will design the project, and Lombard Odier Asset Management will oversee the associated sale of carbon credits.

These are not side projects, they are central to Scottish infrastructure.

In that vein, while much has been said about the problems surrounding ferries, what is less known is that Ernst & Young (EY) were asked by ministers to conduct an in-depth examination of the government structure which runs Scotland’s ferry service under a brief titled “Project Neptune”. The Government agreed to contracts worth £560,000 with EY to carry out the work.

The National Care Service, yet another debacle, was also subject to such design outsourcing. Care specialist Nick Kempe reflected in 2022: “If you’re looking at where KPMG are in the Scottish Government, they have extensive roots.

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“The board of the civil service, which is a small board of half a dozen people, has an ex-KPMG partner on it. The deputy chief executive of the NHS is from KPMG. The head of social care finance in the Scottish Government is also from KPMG. So you can see why they then hand the business of designing the National Care Service to KPMG.”

We could go on, but instead let us conclude with a final, topical, example.

SNP members voted overwhelmingly against freeports at their own conference, through a motion presented by the SNP Trade Union Group, which demanded a series of strict assurances, including mandatory trade union recognition.

Operating outside customs areas, freeports are de-linked from national and local democratic structures in favour of big business. In these outposts, special “tax incentives” and lower tariffs apply, while global firms enjoy a reduced regulatory environment.

None of this faced substantial opposition. Indeed, we have a governing class who in effect refuse to govern.

Outsourcing in this manner is the default position for the Scottish Government and its opponents, often at the expense of independent bodies, research organisations, universities, unions and other sources of expertise and knowledge.

It is little wonder that even the blueprint for independence was handed over to corporate lobbying firm Charlotte Street Partners, which oversaw the Growth Commission.

With our institutions this hollowed out, no wonder there is a dearth of thinking, and a compulsion towards failed orthodoxy.