Author: Cate Devine, The Herald, 23rd November

THE arrival of Scotland’s first urban community-owned greengrocer’s shop has moved a step closer with a unique share issue scheme. Click here for how to apply

Launched with the support of the Co-operative Enterprise Hub, the share offer is intended to raise £30,000 to fund Dig-In Bruntsfield in Edinburgh.

The shop will sell locally-grown seasonal and organic fruit and vegetables from community gardens, -allotments and commercial market suppliers.

The venture followed concern that supermarket chain Sainsbury’s had bought out Peckham’s, the last specialist independent greengrocer in Bruntsfield.

Melanie Main, who is chairwoman of Dig-In Bruntsfield and Green ¬councillor for the Meadows and Morningside, said: “The area has become over-run by local branches of the big supermarket chains such as Sainsbury’s and Tesco, whose fruit and vegetables are not always fresh or local.

“From experience, we have learned that there is no way we can stop them coming here, but we can provide an alternative. We want to help give people control over what they buy and eat, and also to help local producers find a market for their goods.”

There are now 303 ¬community shops in the UK compared to 23 in 1993. Twenty-three of these are in rural Scotland, with another 20 in the pipeline. The Bruntsfield shop is ¬Scotland’s first community-owned greengrocer, and the first established in a city.

Dig-In will take over a print supply shop in ¬Bruntsfield Place from March next year, provided it can raise £30,000 from shares purchased by community members for a minimum of £25 and a maximum of £20,000. Members have one vote each, irrespective of how much they invest.

So far, interest has been encouraging. When Dig-In’s plans were announced earlier this year, it received £6,000 in pledges and a ¬four-figure sum has already been invested.

Author: November 6, 2013

Consultation on the Community Empowerment (Scotland) Bill

This consultation seeks views on a range of proposals intended to give people in communities, and those supporting them in the public sector, a range of new ways to help deliver a better Scotland. It takes forward proposals that were supported in our previous, exploratory consultation in 2012, and others which have emerged from further discussion with stakeholders.

Executive Summary

Scotland’s people are its greatest asset, and best placed to make decisions about their future. The proposed Community Empowerment (Scotland) Bill aims to make the most of the talents that exist in our communities; deliver high quality and improving public services; and support strong local democracy and local decision-making.

The Bill will include:

• a new way for communities to take on public sector land and buildings

• opportunities for communities to be more involved in shaping and delivering better outcomes locally

• greater transparency in the management and disposal of the Common Good

• improved powers for local authorities to recover the costs of dealing with dangerous and defective buildings

• measures to streamline and extend the rural community right to buy

• new duties to strengthen Community Planning, so that public sector agencies work as one to deliver better outcomes for communities

• updated and simplified legislation on allotments

• new powers for local authorities to create local business rate relief schemes.

We are also inviting views on other ways to reflect local democracy principles, and considering how communities might benefit from legislation to strengthen the national and local focus on improving outcomes, currently implemented through Scotland Performs.

How to Respond

You can respond to the consultation online , or download the consultation questionnaires and Respondent Information Form to respond by email or by post. Please make sure you include the Respondent Information Form so we know how to handle your response.

You do not need to answer all the questions in the consultation, if you are only interested in certain topics. The consultation questionnaires are divided according to the chapter headings. We hope you find this helpful. If you choose not to use the questionnaire, please clearly indicate in your response which questions you are responding to. This will help us to analyse the responses.

The closing date for responses is 24 January 2014.

Charity shops boost local business, combat unemployment and even help tackle social isolation, according to a report by the think tank Demos.

The report says despite negative perceptions there is “no evidence” the shops cause “High Street decline”.

Councils should “do more to support charity shops”, the report adds.

The rising number of charity shops has led to calls to limit their numbers, but the report says the benefits they bring are “often unrecognised”.

In August, the Mail on Sunday said research showed there had been a 30% increase in the number of charity shops in Britain since 2008 – taking the total to more than 10,000.

There have been calls for a cap on charity shop numbers, and the removal of tax concessions and business rate relief they currently benefit from.

Ally Paget, a researcher at Demos and the author of the report, said charity shops themselves must do more to tackle “negative public perceptions” and highlight the “huge contributions they make to communities”.

“It is a real shame that the multitude of benefits offered by charity shops is so often unrecognised and under used, especially in this time of austerity,” she said.

“Local authorities can and should do more to support charity shops at a business level, and to draw on the capacity of charity shops to spur local regeneration.”

The report says charity shops make a “colossal” environmental contribution by reusing items, reducing the UK’s CO2 emissions by an estimated 3.7 million tonnes per year – “roughly equivalent to the entire carbon footprint of Iceland”.

Demos said its research showed charity shops keep shoppers on high streets.

“Our analysis and our public survey results suggest that the growth of charity shops on the High Street is a symptom, rather than a cause, of High Street decline,” the report adds.

It says data showed charity shops “do not increase rents for other shops” and “do not prevent small and medium-sized businesses from opening” on high streets.

The research also found charity shops help combat unemployment, with more than 80% of volunteers saying they were using their shifts to gain retail experience as a path to paid employment.

The report recommends that job centres should promote volunteering in charity shops to more jobseekers.

Charity Retail Association figures show the shops employ 17,300 paid staff and have 210,000 volunteers in total.

The report says charity shops help tackle health and social problems, particularly social isolation.

Many staff surveyed by Demos said their shops often acted as a form of community centre for older and vulnerable people to simply “drop in” for a chat.

Demos conducted a poll of 2,200 members of the public, as well as around 150 charity shop managers and 150 volunteers.

Some 91% of volunteers cited socialising and meeting new people as a benefit of volunteering, and 61% felt their volunteering led to improved physical and mental health.

Warren Alexander, of the Charity Retail Association, said charity shops not only raise “vital money” for good causes but also “bring huge value to their local communities”.

Author: Wikipedia

Airdrie Savings Bank is a small commercial bank operation in the Lanarkshire and Glasgow areas of Scotland. It runs 8 branches throughout this area, with its head office in Airdrie, North Lanarkshire. Total assets of the bank at 31 October 2006 were £126 million with reported profits of £0.555 million.

Airdrie Savings Bank is the only remaining independent Savings Bank in the UK. It operates on mutual principles, has no shareholders and is instead governed by a Board of Trustees, appointed to represent the interests of depositors and to ensure that the Bank is managed properly.

In addition to Airdrie, there are branches in Baillieston, Bellshill, Coatbridge, Motherwell, Muirhead, Shotts and Falkirk.

Airdrie Savings Bank was formed as part of a movement to bring banking services to the wider community in 1835. A board of trustees from the local community act as board of governors. Similar banks were set up throughout the United Kingdom. Eventually most of these were brought under the umbrella of the Trustee Savings Bank, which was subsequently floated on the London Stock Exchange. Airdrie was the only Savings Bank not to join this scheme.

In August 2010 it was announced that a new branch would be opened after a cash injection of £10 million, from a group of Scottish entrepreneurs who support the bank’s mutual model. Sir Angus Grossart, Sir David Murray, Ann Gloag, Brian Souter,Sir Tom Farmer and Ewan Brown each provided £1 million. Soutar stated that “Airdrie Savings Bank represents what Scottish banks once stood for – security of funds, a focus on savings and outstanding personal service”. He went on to say that: “We believe the mutual principle is fundamental to the integrity of the bank. We are doing this because so many Scots are dismayed at what has happened within the banking sector”.

Reshaping Public Services – a radical approach to reforming public services

PURPOSE OF THIS PAPER

• To share learning from a recent conference about a radical “whole systems” approach to public service reform that has been piloted in Stoke-on-Trent. 

• To invite us to consider whether we should incorporate any of this learning into our current thinking. 

• To make colleagues aware that the Chief Executive championing this has offered to visit Scotland with his senior management team to share with us what they have learned. 

SUMMARY

Bromsgrove & Redditch Councils  and Stoke City Council have piloted a new way of working with partners that appears to go beyond co-location, co-production or shared services. Two pilots brought together partners including Housing, Health, Fire, Police and others to apply a whole systems approach to problem solving. 

Their starting point was to understand the person/ family and target help to meet their needs, rather than each agency providing isolated services to address single issues. In the councils’ own words: “the results are profound. Citizens previously labelled as ‘lost’ are living good lives, demand on services is going down and the size of opportunity to reduce cost is staggering”.

As a result of evidence gained from the pilots, money is already being transferred from other partners’ budgets (such as Health) to redesign front line council services. The emerging evidence is being used to commission new services not previously provided, and the Third Sector is playing an integral role in delivering those services.

Another significant outcome appears to be the effect of this new way of working on staff morale, engagement and empowerment. Judging by what I heard at the conference, and the people I spoke to, this seems to be profound. One front line worker, with many years local authority experience said from the floor “this has given me boundless energy and set me free to make a difference”.

As a result of the success of these pilots, the Council Chief Executive said that: “ the Council is now at the beginning of a total system redesign based around locality”.

This paper will set out just a brief summary of the pilots, taken from my conference notes. I’m happy to provide more information if required 

Background – preparatory work

• The Council chief executive hosted a 6 day facilitated event with all partners (health, police, fire, social services etc) – to assess demand on all services and their capacity to respond in light of budget cuts. 

• They found that between 36% and 53% of demand for all services was “failure demand” (waste) – this is demand caused because of a fault in the system (a basic example of this would be someone calling to ask why an earlier request had not been dealt with).

• The partners spent a lot of time examining  what was causing the failure. They mapped complex cross cutting individual cases back to when they first presented problems (in some cases over 10 years). For example Case A – disabled woman, multiple problems, 11 year history of interactions with public bodies. Tracked every interaction over last 11 years. First presented in 2002 as a problem due to anti-social behaviour of child– what she said she needed was help with the housework and she wanted to be able to access the upstairs of her home (this would have cost £20,000). What she got was anger management classes for the child, a place on a parenting programme and help to clean 1 bedroom. Since then there have been over 100 interactions (social work, police, housing, health etc) – total cost so far £107,000 (and this doesn’t include the cost of the child being taken into care). 

• The team mapped all local service providers for both professionals and users (over 300). They identified “superusers” (high consumers of services) and examined case studies back to when they first presented and examined referral routes and interactions.  Found lots of examples of people being told “go away until you get worse” and no one person or agency ever had “ownership” of the case. Total cumulative costs (per individual case) were often over £1 million

• Lessons learned – we record when people are not coping but we don’t do anything about it. Red flags are not seen or heard. We do only what we have to. we protect our budgets, we refer problems to others, there are barriers to sharing data (we don’t trust each other), we focus on our targets. In most cases, the underlying problems had never been fixed. People have different needs. No one agency could meet those needs. We each believe that what we are doing is working (and it isn’t)

THE PILOTS

All partners agreed to pilot a preventative, whole system approach in local areas. The partners agreed there would be no targets, no top down management structure, they would share information and share funding

Pilot 1 – The locality approach (housing)

Pilot 2 – the “rebalance me” approach (whole system support to help people “live their lives well”)

• Both pilots staffed by multi – disciplinary locality teams – based in the community – no procedures, no targets, no timescales – one person had ownership of the case and acted as single point of contact (with autonomy to decide what was needed and authority to pull in expertise and services as required). The “rebalance me” team also included secondees from fire, police and third sector)

• the teams worked to purpose and principles.

• Purpose: “1. You understand what I need  2. You help me resolve my problems”

• Principles “you fully understand me and the real problems to solve – you will help me to identify solutions to my problems – you will help me to help myself – you will pull on expertise as needed”

• “I am the owner of this case – how can I get you the help you need”

• Case officers did not work to procedures and had autonomy to “bypass the system”, but worked under agreed controls – their action had to be: Proportionate, Legal, Auditable, Necessary and Safe.

• Measures were used to understand whether what they were doing was working (but crucially, no targets were set – this gave freedom to tailor individual solutions and do what was needed, and only what was needed.)

Pilot 1 Early results – the locality approach

• Before the pilot started, the team assessed everyone according to need (5% needed specialist long term professional help to live their life well – 31% had multiple problems and “could go either way” – 64% had housing problems but were living their life well.

• After 6 months, the respective figures for the three categories were: 5% (no change), 15% (down from 31%) and 80% (up from 64%). So half of the people with multiple problems who had been classed as “could go either way” were now classed as “living their life well”.

• Staff report dramatically increased job satisfaction and engagement. Quotes included “we know we are doing the right thing – we know how our customers feel – we work as a team (no silos) – Agencies work alongside each other”

• For Case A (the complex case referred to earlier) the total cumulative projected costs until 2022 are £782,000. Had the person been given what she had asked for when she first presented, then received ongoing support under the pilot method, the figure would be £61,000.

COSTS AND SAVINGS

The council collated the costs of all activity carried out per person for the 2 years prior to the pilot (across all agencies and partners). They then collated the cost of all activity since the pilot started. This allows then to map future projections for both methods and compare the two. They also identified 35 key measures to assess progress. They also measured progress against the city as a whole and similar “control” wards in the city (to prove that any change was as a result of the pilot)

The team also captured costs per agency both before and after the pilot, so they could compare.

Early findings (caution – this is based on a small sample of cases and data points)

• Rent arrears down by 14% ( against a 5% reduction across the city)

• Notices of eviction down 1.5% (compared to a 6% increase city wide)

• Anti social behaviour down 5.2% (compared to 21% increase) 

• Under the pilot, costs to NHS (for the people in the pilot) down 80%, police costs down 95%

• But – Local authority costs increased by 10%, and the cost of services commissioned by the local authority increased by 150% [in most of the examples given these services were commissioned from third sector providers]

• (so costs shifts from health, police etc to local authority commissioned services – many of which are provided by the third sector)

• Ratio of demand on each service (from the people on the pilot) – before the pilot was Police 40%, council 40%, NHS 18%. After the pilot the figures were council 84%, Fire 11%, NHS 7%, Police 4% 

• Whole system costs under the pilot (compared to pre pilot): Justice (-99.9%), fire (-71%), NHS (-69%), Police (-95%), council direct provided services (-42%), but council commissioned services (+150%)

PROJECTED SAVINGS – NEXT TWO YEARS

• For the 7 cases that it has been possible to fully cost, the cumulative projected savings over the next two years are £104,000. (Under the old method, the 7 cases would be projected to cost £337,000 – under the pilot the figure is £233,000)

• If this was applied to every similar case in the city, the potential saving to the public purse would be £81.5 million over 2 years.

OTHER SYSTEMS THINKING BASED INTERVENTIONS

The council has also used a whole systems approach to redesign how it delivers council house repairs (results – average days to repair down to 3.2 (from 20), average visits per day cancelled down to 4% (from 11%), calls where problem not fixed first time down to 25% (from 42%) – customer satisfaction rating 96%).

The council has also applied a similar approach to equipment for independent living, pothole repairs, benefits advice and development planning, with similarly impressive results.

KEY LEARNING POINTS SO FAR

(From the keynote conference address by Tony Oakman, Stoke Council’s Executive Director of People):

• We need to “let go” – and be less solution orientated

• Need greater appetite for risk

• Need to ask more questions

• Can’t be top down

• We must suspend the rules (in part)

• There is no “manual” for this

• Need to persevere and hold nerve

• “integration” and “shared services” do not resolve the problems – the issue is not how efficiently we do things. The issue is whether we are doing the right things – are we making a difference? (Peter Drucker quote: “there is nothing so useless as doing efficiently what should not be done at all”)

• Need to move away from the “computer says no” model (where, perversely, we tell people that they need to get worse and meet the threshold before we can help them) – to a model that instead switches off the demand.

Reshaping Public Services Academy

The councils have also established the “Reshaping Public Services Academy”. This claims to be unique in that its approach to change is based on systems thinking principles and method.

NEXT STEPS?

Kevin Dicks, CEO of Bromsgrove and Redditch Councils and Tony Oakman, Executive Director of People with Stoke City Council have volunteered to bring their team to Scotland to share their experience with SG and any other interested partners. Equally, they would be happy for us to visit them for a study visit. Their experience of this pilot has clearly enthused them and their colleagues, and they are keen to share the potential of this as widely as possible.

I’m happy to offer to facilitate any visit.

Stephen Jones 

Scottish Government Local Government and Communities Directorate, Third Sector Unit

October 21, 2013

0131 244 1593 or 07584 481452

A cracking success

To see short film from STV  click here

A “Rent A Hen” scheme on South Uist is not only creating employment but providing crofters, who sell eggs from their rented birds on to local hotels, with an extra income.

Lochboisdale Amenity Trust was awarded a £32,000 grant in 2012 by The Big Lottery and Village SOS to set the scheme up.

Eggs on the island had been brought in from the mainland – and sometimes as far afield as Poland – since the island’s once thriving egg industry declined.

Now, thanks to the scheme, eggs are collected from local crofts and taken to a packing station which distributes them to almost every hotel and shop on the island.

The Hebridean Free Range eggs have proven such a cracking success that plans to expand the scheme and create new job opportunities are under way.

Since April this year, local authorities have been making awards from the Scottish Welfare Fund (SWF) to help people in a financial crisis or to enable them to live a more settled way of life by providing essential households items.  Over 20,000 of Scotland’s most vulnerable people were helped in the first three months of the year.  It’s a good start. But we can do more. The SWF has the ability to support around 200,000 people a year.  

Following on from the Department for Work and Pension’s discretionary Social Fund, the SWF is a discretionary budget-limited scheme that helps people on low incomes by awarding non-refundable grants – Crisis Grants and Community Care Grants.  

Examples of the types of help that the SWF can provide include situations like: 

• The young man who had been living a very unsettled lifestyle, and became homeless. His local authority allocated him a permanent tenancy. Through the SWF, his local authority gave him a Community Care Grant for carpets, curtains, bed and bedding, cooker, fridge and washing machine for his new tenancy. As a result, he has been able to take his child out of care to live with him. This made a huge impact on the quality of life for the man and his child. 

• The elderly person whose fridge had been leaking, causing damage to his kitchen and his hall.  Through the SWF, his local authority gave him a Community Care Grant to get a new fridge, new vinyl for the kitchen, a new hall carpet and some paint/cleaning equipment for him to clean up his flat – making for a much improved living environment.

• The single parent of two children, and who suffers with depression and post-traumatic stress disorder, received assistance when a loan company deducted money from her bank account as a brokers fee, even when she didn’t get the loan that she had applied for. To remove the serious risk to the health of the applicant and her children at the time of the emergency, the local authority awarded her a Crisis Grant to allow her to buy food and fuel for a week.

• the single man who suffers with diabetes, depression and arthritis whose   Employment Support Allowance(ESA) had been stopped as he had been found fit for work following his Work Capability Assessment. He had Appealed against the decision to stop his ESA, but had had no money for 3½ weeks, and DWP were unable to say when benefits would be re-instated. His local authority awarded him a Crisis Grant voucher to allow him to buy food and money to restore his electricity supply removing the serious risk to his health for one week until he could pursue his benefits with DWP.

The guidance that underpins the SWF has recently been revised, to broaden the eligibility criteria, reflect lessons learned since the SWF started in April and give clarification where needed.  For example; you no longer have to be on qualifying out of work benefit to be apply to apply for a Community Care Grant; and the definition of families subject to exceptional pressure has been expanded to include families who do not have dependent children.  

Full details of the type of help that the SWF can provide and how to apply can be found on the Scottish Government website at:  http://www.scotland.gov.uk/Topics/People/welfarereform/scottishwelfarefund

Scottish local government has adopted a vision that focuses on improving local democracy as the route to better outcomes, and is putting this at the heart of all of its work.  The COSLA Convention has agreed to establish Scotland’s first Commission on Strengthening Local Democracy to pursue that vision.  It will bring people together with a common resolve to consider how local democracy and accountability in Scotland might be improved and empowered, and provide advice on what is needed for that to happen.

The overall purpose of the Commission is to:

“Identify a route map to deliver the full benefits of a shift in power towards local democracy for people in Scotland”

It will work to address three objectives:

1)     Investigate a local approach to services and accountability that will improve outcomes in Scotland’s communities

2)     Consider the current landscape of democracy in Scotland and how this could be strengthened and enriched to benefit local people most

3)     Make recommendations that set a course for putting stronger local democracy at the heart of Scotland’s constitutional future

Help us understand what strong local democracy means to you. NEW DEADLINE 20 DECEMBER 2013

As a Commission, our starting point is that we believe that local services and local accountability matter.  That is why we want to start our work by asking for your views and evidence about what happens now, and what the future might be. 

We will use your views to develop our work and explore ideas, so what you tell us now is really important.  

THIS IS ONLY OUR FIRST STEP IN LISTENING TO YOU. 

The information that you give us now will help start the debate, but we want this to be an ongoing conversation.  Over the next few months we will be setting up different ways to meet you and discuss your ideas.  So if you want to tell us more, or would prefer to share your thinking in a different way, we will be ensuring that there are ways of doing so.   One of our questions is about how we should do this.

How to share your views and evidence with us

We want to hear what you have to say.  The best way to do this is to download the information below and email your response back to us at commission@localdemocracy.info

To learn more about the blank vote campaign click here 

BLANK Votes Count

All votes, including blank and spoiled votes, are counted and announced in the results for each constituency on election night.

Blank votes have traditionally been few in number because people have been unaware of the option.  Instead, nearly 40% of registered voters have simply not voted.  There has therefore been no media or political pressure to retain blank votes in the subsequent presentations of the results, or even to require all returning officers to separate blank from spoiled votes.

This will change if significant numbers of people vote blank.  It will become a key news story of this election.  Unlike non-voters, blank voters cannot be dismissed as apathetic.

The 2008 London Mayoral and Assembly elections have set the precedent for blank votes being formally recognised and retained in results.  (In the London Mayoral election, 13,034 blank votes were cast, and in the Assembly Member election, 39,894 blank votes were cast.)

Blank means BLANK

Some people like to write ‘None of them’ or a comment on the ballot paper.  However, in the 2008 London elections these marked papers were classified as ‘rejected votes’, not blank votes, because it could be argued that the vote was unclear or that the handwriting could make the voter identifiable.  So to vote blank, the ballot paper needs to be left completely BLANK.

Two positive outcomes

This is a campaign to improve and revitalise UK politics.  The message is ‘Vote for a candidate you really want, or vote blank in protest.  Both will help to revitalise UK politics’.

• If some of the nearly 40% who didn’t vote last time decide to vote for candidates who they trust to represent local people with integrity and to improve UK politics, then we may get a good range of people in parliament and any election result is possible.

• If significant numbers of people don’t want to support any of the candidates, and vote BLANK instead of not voting, it will be a key news story in this election.  It would show the level of dissatisfaction with UK politics and the positive demand for real change.

Both are routes to improving UK politics.  With nearly 4 in every 10 registered voters not voting in 2005, there are enough potential voters to make both outcomes possible. 

We are publicising this site widely to engage potential voters and non-voters.  Please help. 

When someone says they are not going to vote for anyone, just suggest they vote blank.  It prompts a more interesting discussion, and it counters the justification for not voting.  (We say this from experience of many interesting discussions on doorsteps during the county council elections.)

If you are disillusioned with UK politics, election time is the moment to improve it.  If we all take part in this election – these could be exciting times.

To learn more about the blank vote campaign click here 

Jose María Carrascal

The biggest news story of recent times has hardly made the headlines. It came in a speech delivered by the new King of the Netherlands during a ceremonial act – the official opening of the parliamentary year – when he announced the “replacement of the traditional welfare state by a participatory society”.

In other words, he declared the end of a sacrosanct system without setting out an alternative. While King Willem-Alexander delivered the speech, it was actually written by the Dutch government – a government made up not of conservatives like Margaret Thatcher and Angela Merkel, but of liberals and social democrats. In the next paragraph came an explanation: “The transition to a participatory society is particularly relevant for social security and for people who are in need of long-term care. The traditional welfare state of the second half of the 20th Century has created precisely in these areas systems that, in their current form, cannot be sustained”.

Does it have to be stated any more clearly? Well, the explanation lies in the numbers. The Netherlands, which has grown tired of trying to teach lessons to the countries of southern Europe for not doing what they should have done, will miss its own deficit targets this year, while its economic growth slumps to 1.25 percent and purchasing power by half a percentage point. This situation has forced the government to announce a budget cut of €6bn. According to Willem-Alexander, “a strong and sensible people can adapt to such changes”.

The heart of the current trend and this speech reveal that it is not a matter of extraordinary circumstances requiring a simple adjustment before we can go back to the way things were, once the bad times pass. No, it is a question of bringing in profound changes, of laying the foundations of a new society, of launching a new model to take over from the one currently in force that is no longer working. In conclusion, it comes down to replacing the welfare state with something quite different – a system dubbed the “participatory society”.

What is the participatory society? For citizens, it means taking on a significant number of tasks and responsibilities that till now were handled by the state, particularly regarding their future and the future of their children. The state will keep basic social services in place, but individuals will have to contribute more to them, both for themselves and for those around them – ie, the members of their family, their neighbours and relatives. Hence the term “participatory”.

The paternalistic state can no longer take on these costs, for the reason given above: the public accounts won’t allow it. And they won’t allow it because the welfare state is based on erroneous figures – I would even say on a rip-off. Every welfare state is based on a “social contract”, a pact that binds all citizens of a country, rich and poor, young and old, to share out costs and benefits as fairly as possible.

However, this contract has not been respected by the previous generations, who managed the accounts to their own advantage. One example illustrates this perfectly: retirement pensions began to be calculated in Spain from the amounts assessed during the last two years of active life, when earnings are at their highest. Then it became the previous eight years, which is still something. No surprise, then, that the social security fund is on the brink of bankrupcy thanks to the irresponsibility of a few politicians who have transformed the welfare state into a gigantic pyramid scheme à la Bernie Madoff, through which the allowances are paid based not on what the beneficiaries have paid in, but rather from the contributions of new taxpayers, who are becoming fewer and fewer.

Continent going bankrupt

After the collapse of the communist utopia comes the turn of the social democratic utopia, which combined the market economy with social services of all kinds. This made the model seem more solid, and made Europe a destination for millions of people willing to try to get here from Africa, Asia and South America. But the cupboards of the European paradise have been emptied out, and for Europeans too. In fact, the continent is going bankrupt, apart from some exceptions like Germany and the Scandinavian countries, which made the right adjustments in time in order to keep the pyramid from becoming their gravestones. Today, they want to do the same for those who didn’t want to believe what was coming.

No. What we are living through at the moment is a change of cycle, even of an era: this transition means we have to adapt to the new reality that will be dominating our countries and the rest of the world. It is impossible to keep paying out the same pensions, which come from our own contributions, if our life expectancy is longer, just as we can no longer continue to go after automatic wage increases if the company where we work is having difficulties. And we cannot keep up public institutions whose sole function is to pay salaries to relatives and friends, or go on claiming that nothing has been happening over these past decades.

Wealth is currently leaving Europe for emerging economies. Today, our middle class is being challenged by people who want to be the middle classes in Asia and Latin America. Does that mean we will be going back to ration cards and the misery of the post-war years? No. It does mean that today’s young people will be poorer than their parents, but much better off than their grandparents. Put another way: we can no longer spend what we don’t have, which should seem obvious. That’s how it is, even if we are surrounded by self-satisfied leaders who refuse all change and by parties of the left that are more conservative than anyone.