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