Just like the diligent, exhaustive research done by ICAS on pensions, each of the topics identified in the recent article, New major financial issue, supposing Scotland voted Yes to independence, deserves equivalent quasi-academic scrutiny and analysis.
Here are some quick thoughts for starters on one of these – the Driver and Vehicle Licensing Authority [DVLA].
I chose this because one of the comments on this article from ‘Fletcher of Saltoun’ splendidly reveals his own ignorance when he asks: ‘Vehicle licensing. Just how difficult do you think that is?’; and because a comment from ‘Simon’ described these matters as ‘teething problems’.
These costs and set-up tasks are not mere ‘teething problems’ – that would be touchingly naïve, were it not so dangerously ignorant.
In my daily working life I help all sorts of organisations with big transformation projects – usually new and upgraded IT systems and also mergers and de-mergers. Separating – effectively demerging – the DVLA, to take just one example, would be neither cheap nor straightforward.
Take it from me – it’s a cast-iron certainty that it would be difficult; more expensive than initially budgeted; take longer than planned; result in loss of features currently enjoyed; and result in future divergence from innovations that would take place in the rest of the UK after any vote in favour of separation.
And then you can multiply that for every other agency and institution that needs to be demerged and separated.
Take just one function of the DVLA – renewing tax discs: You might imagine it’s just a payment system for renewing your tax disc, but this one process requires [amongst other things]:
- Interfaces with all UK insurances companies – that themselves need to be approved by the DVLA – to check vehicles are validly insured, by legitimate insurance organisations.
- Approving and inspecting garages authorised to do MOTs – and maintaining the systems whereby they can securely record, electronically, the MOT status of vehicles.
- Accepting newly manufactured cars onto its systems and registers, with associated vehicle details, like CO2 rating.
- Maintaining and updating vehicle registers, recording those stolen, written off, on which there are still outstanding HP payments, exported, etc.
- Links to the Police National Computer and to all police organisations across the UK, recording relevant vehicle data.
- Links to post offices providing a face-to-face service.
Let’s stop there for now.
The British DVLA is self-funded, so the ‘8% Scottish population share’ of its costs would NOT be saved by the tax-payer in isolating the Scottish components of this service. But it would still require a new Scottish Government to establish a separate service, independently. So all one-off transition costs would need to be funded exclusively by Scottish tax-payers. And on a continuing basis, it would be reasonable to expect a future tax disc / vehicle registration to be priced to owners at the level of what it costs to the Scottish government to issue the registration – meaning that it would continue to be a self-financing system.
Yes, Scotland could choose to inherit a ‘copy’ of the software and the database of Scotland registered vehicles… And legally, a deal might be possible to transfer across the legal agreements between all these parties – insurers, garages, etc. But in future, all systems and changes would be for an independent Scotland to operate, maintain and fund.
Of course it’s all entirely possible for Scotland to do this solo. In fact, setting up all these new legal, financial and IT systems will be a ten-year , not 18 month, bonanza for people like me, whose business is helping organisations to implement exactly these sorts of changes.
And that is where the significant one-off costs would occur.
New staff would need to be recruited – I’m guessing you won’t get 8% transferring north from Swansea – so recruitment is your first new overhead cost. Just like new offices, training, transition costs, new equipment and facilities, upgrading technology, IT testing, professional fees – lawyers and accountants, etc, etc.
All demerged organisations incur these costs – among many more. No escape. Don’t expect the rest of the UK to grant anything more than copies of the contracts being novated and replicas of the IT. Why should tax-payers in England, Northern Ireland and Wales pay for something they didn’t ask for and had no say over?
Then on an on-going basis – after the one-off set up and transition – we’d need both to:
- Operate the system efficiently – to make sure that the price of the tax disc to the vehicle owner is the same as the costs incurred by the Scottish DVLA.
- Upgrade and improve the processes – the UK one has been creative and innovative over recent years, invested in new technology like the online renewals systems.
At the moment all overheads are paid for by 34 million vehicles owners in Britain.
We’d need to recoup overheads over a much smaller population – 2.75 million vehicle owners in Scotland.
It’s for the Scottish Government and Yes Scotland to demonstrate that we won’t be paying lots more for tax discs and vehicle registrations.
I believe ongoing costs will be higher per vehicle because there are many fewer renewals and new vehicles over which to spread your overhead costs. There’s a real strength in numbers / efficiency argument to having a Great Britain-wide DVLA. [Ed: Northern Ireland has always operated its own system.]
But regardless of whether the price is marginally or significantly higher, what’s all this upheaval been for? What have we gained? The right to set our own vehicle registration fee at a higher rate? And what have we lost? Well, here’s a couple of intriguing questions that get thrown up – far from ‘teething problems’…
- A vehicle owner moves between Scotland and another part of the rUK – do you need to re-register your vehicle, and pay again?
- Insurance companies in future have two separate systems with which to share data and agree legal compliance procedures – do they increase their prices to drivers in Scotland to pay for this additional cost to them?
- All garages in Scotland will – on a one-off basis –need to change their procedures; they’ll have a new agency to which they submit MOT details. And probably – for a period – run with two sets of arrangement while things transition. What does this cost these businesses? Will they be able to do an MOT for an rUK registered vehicle?
- Many people use Autotrader and similar companies to check a vehicle’s status; so will a potential vehicle buyer in Scotland need to pay for two separate vehicle checks? In case the vehicle has an outstanding loan in England even though it’s being bought in Scotland?
All these answers can be found in due course – but it’s all an utter waste of time, money and energy. Right now, we already have now a perfectly good, secure vehicle registration system.
Our politicians should be worrying about re-floating our economy, getting young people into jobs, fixing the failures in our health service, supporting vulnerable children in care, improving education.
Yet the SNP government is obsessing over how to replace a good vehicle licensing operation with what will probably be a pricier, weaker one. Or worse, pretending it will be ‘cheaper and better’ in an independent Scotland.
Just for once, it would be good to hear them say ‘you know what, it might be tricky, and it will cost more’. I’d respect them more for that honesty than trying to buy our support with pathetic, bland platitudes.
This article has been contributed by a reader who prefers to remain anonymous.