To: the Convenor, Infrastructure and Capital Investment Committee
Cc. members of Infrastructure and Capital Investment and Public
Petitions Committees and clerks
Withdrawal of PE1390 and Reasons
I am writing to given notice that I withdraw my petition (PE1390)
and to give my reasons for this. Since members of Infrastructure
and Capital Investment Committee were not given my petition to
consider despite clear request to do so from the Petitions Committee,
I am copying to the members of both committees to at least make
sure they get sight of this notice.
I have given invited expert evidence since 1999 to several committees
of this parliament, including various Transport, Education and
Finance Committees. My first appearance before Finance Committee
was in private session in its first ever meeting in the first
session of parliament when I helped brief the committee on how
the Scottish budget worked. In the case of its Transport Committees,
I have given invited expert evidence in all three of the previous
sessions of this parliament. I also have a research publication
record in relevant areas of industrial and business economics,
competition policy (including EU policy) and the economics of
ferry services.
In the case of ferry services, my advice and those of other invited
experts whose advice I respected was largely ignored or rejected
down the years. It must be said that the evidence in general was
not controversial and would not have been contested by genuine
experts in the field of regulatory oversight of essential services.
Collectively down the years the evidence we gave was no more than
a guide on how to regulate an essential public service based on
established best practice.
The catalogue of policy or implementation errors here include:
predictable and predicted tender failures (e.g. Northern Isles,
Campbeltown-Ballycastle, Gourock-Dunoon); rejecting PSOs; failure
to appoint Operator of Last Resort; rejecting Altmark; rejecting
need for independent Regulator; no sector-specific statutory framework;
facilitation of cherry picking; requirement to "bring own
boats" for 6-year tender when suitable vessels would have
to be built and leased by CMAL; creation and perpetuation of private
unregulated monopolies controlling essential services.
No wonder there is a need for an independent expert group to
critique this and advise what should be done. No wonder officials
have resisted this. But the real wonder is how parliament has
never subjected this whole debacle to the scrutiny that it has
needed.
Unfortunately MSPs and Ministers were either unwilling or unable
to understand what we were talking about. That in itself would
not have been a problem had there been simply a willingness to
accept - as I am arguing now and have argued to MSPs and ministers
for years - that what was needed was advice from a genuinely independent
and professional expert group drawn from experienced professionals
in the areas of regulatory governance of essential services, and
EC competition and State aid law. The petition was a last resort
final attempt to again warn of the dangers here. I was realistic
about the chances of success but I did not anticipate how effectively
and how early failure here would be ensured.
The advice which you gave the committee 5th October on PE1390
was simply "Given that, as we heard earlier, the Scottish
Government intends to publish the ferries review later this year
and that the committee has agreed to scrutinise it at that time,
I suggest that members agree to consider the petition further
at the proposed evidence session with the Minister for Housing
and Transport on the outcome of the review".
As you know, that was agreed. But the committee background papers
to that item, PE1390, did not include the petition, not even for
reference purposes.
How can any competent and informed decision be made about such
a matter when it does not include the relevant material itself?
There is a link that supposedly refers to my petition. But we
all know that few members of the public and no members of committee
will bother to read such a link but will just read the background
papers supplied to them. How can I be so sure of this? Because
I checked the link for myself after the meeting and even though
the url includes the term "PE1390" it does not actually
lead to my petition at all or anything to do with it but just
the front page of the Parliament website (this still the case
as of October 27th). Had any members of committee actually tried
to use the link they would have encountered this misdirection
and as responsible legislators as well as the legislators responsible
they could have been expected to flag this error up to the Clerk.
So one must assume none of your committee actually read the petition
about which they were making a deferral decision that would effectively
kill it.
But the treatment of this petition - and of the public interest
- is much worse than that. In my petition's argument I had pointed
out in detail how official handling of policy on Scottish ferries
services had led to major failures from just about the first opening
of the Parliament in 1999 to the present day and how failure to
listen to expert advice was responsible for this. Transport Scotland
produced a five-page response to my petition. I was then able
to rebut in a detailed four-page response to Petitions Committee
each one of the substantive points made by Transport Scotland.
All three documents - the grounds for the Petition, Transport
Scotland's response, were all still posted under Petition 1390
on the Public Petitions website as of October 27th. But only one
of these documents was actually produced as background paper for
the Infrastructure and Capital Investment Committee in discussion
of my petition 5th October; not the grounds for the petition itself,
but only Transport Scotland's response itself and without my rebuttal
of every one of the substantive points they had raised. The clerks
have failed to give me satisfactory explanations as to why this
happened.
All this frankly beggars belief, whether considered in terms
of substance or process. Committee members and members of the
public reading the Official Report and background papers for the
Committee meeting on 5th October would only see the spurious and
flawed comments by the officials.
Both as a participant and as observer of what has happened to
others in this parliamentary process for more than a decade, I
know what would happen next. If I was to allow my petition to
continue I would be complicit in this process which is why I am
withdrawing it. You would, as the committee agreed, invite the
minister to comment on this petition once the Scottish Ferries
Review is completed, a process which has already dragged on for
years. The minister will simply refer you back to these comments
by Transport Scotland which you already have all as your committee's
background papers. And that will be that. Instead of helping to
promote transparency, accountability and responsible governance,
this will actually achieve precisely the opposite outcome.
By the time this happened it would in any case be too late to
recover the situation even if the committee actually read the
petition at this point. It was the dangers of that Scottish Ferries
Review that I was trying to warn parliament about, and if the
committee had actually read my petition and my rebuttal of Transport
Scotland's comments on my petition, it would know if was to do
anything it would have had to start now, not wait for the fait
accompli of a finished review process and the tendering of most
Scottish ferry services in 2012 and 2013. At UK level there are
discussions on actively considering ways to limit lobbying on
behalf of vested (mostly commercial) interests influencing policy.
But the Scottish Government - with this parliament's blessing
- has actually cut out the middle man and invited in these vested
interests to help formulate policy as insiders - or "stakeholders"
in the Scottish Ferries Review process. I can already predict
many of the outcomes of this process which will include unbundling,
further degradation of public services, more tender failures,
cherrypicking, increased and unnecessary burdens on the tax payers,
and the creation or buttressing of more private monopoly control
over essential services. It is the responsibility of government
and parliament to control or prevent monopolies, not help create
unregulated private monopolies, which is what this government
- again with this parliament's active or passive support - has
already started to do in the last session of this parliament.
As I note - yet again - in the petition, virtually every essential
service subject to competitive tendering under EU law face similar
issues relating to, inter alia: exclusivity; independent regulator;
Altmark; PSOs; PSCs; cherry picking; bundling; and operator of
last resort. Adequate governance, never mind best practice, takes
generic solutions relating to these issues and customises them
to sector-specific legal and industrial characteristics in each
case. It is the failure to recognise the substance of that basic
point that lies at the heart of successive and cumulative failures
here.
The failure of governance here runs deep and is systemic and
institutional. This process is being led by officials who, irrespective
of their competence as individuals and civil servants (and which
I do not question), are simply not qualified to do the job of
regulatory governance which they have been assigned and which
they are now loath to give up. One would have thought that the
construction of the Holyrood building itself would have been lesson
enough of the dangers of just leaving major projects in the hands
of inexperienced officials and politicians. Or if you still doubt
this, go down to Princes Street and ask where are the trams.
I cannot now imagine circumstances in which I would ever give
expert evidence to this parliament again. On this at least I am
sure we can both agree. I am not willing to trust my professional
reputation to this body and be party to the trampling of the public
interest anymore. I have colleagues who now refuse to give expert
evidence to this parliament for similar reasons despite having
given of their time freely to it in the public interest in the
past, and I now join their ranks.
I also know there is no point in raising these issues with MSPs,
ministers, convenors of committee or even presiding officers.
I and others have tried these routes in the past and know it is
a waste of time. Which is why I am posting this on my website,
at least that is some form of transparency.
Finally, as far as the governance of Scottish ferry services
are concerned, I can say without reservation that it would have
been much better if this Parliament had never existed because
at least UK authorities would have ensured that proper mechanisms
for regulatory oversight would have been put in place, just as
they have ensured for all other formerly nationalised UK industries
providing essential services and now subject to competitive tendering
under EU law. Even Mrs. Thatcher's governments provided these
basic safeguards.
Domestic ferry services are just about the only former nationalised
industry providing essential public services which the executive
and parliament have had responsibility for and which does not
have a UK dimension. It provided a unique perspective from which
to observe if and how this Scottish Government and Parliament
can find Scottish solutions to a major Scottish issue and in turn
to judge the competence of governance, actual and potential, in
this context. After more than 12 years, the governance system
here has failed, repeatedly and cumulatively. How can this parliament
govern the country - let alone the independent Scotland which
the majority of its MSPs advocate - when it will not even recognise,
never mind apply, the simple, basic and well-known principles
needed to govern these essential services competently. What justification
is there for the government to ask for more powers when it cannot
or will not use its existing powers competently.
It is indicative of how impoverished the debate has become here
than no-one on any side seems to be raising these questions or
to recognise their potential significance.
Professor Neil Kay
27th October 2011