Lesley Riddoch: The lessons Scotland can learn from Iceland

Even though the subarctic state is 90 minutes flying time north with five glaciers, almost no trees thanks to the thin volcanic soil and darkness creeping early across the majestic, jagged mountains – I was undoubtedly warmer than at home.

Indoors everyone’s in T-shirts. At night windows are open because it’s so darned hot. Outside it’s just 3 degrees, but leaving and returning to piping hot homes, offices and public buildings keeps the feeling of cold at bay outdoors too. How come?

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There’s a simple answer. Some 99% of heating (homes and workplace) in Reykjavik is supplied by geothermal power. And these power plants are owned jointly by three local councils whose sole objective is to serve their people.

The result cost-wise is stunning and game changing.

Kari, a young geologist who showed me around the biggest Hellisheiðarvirkjun geothermal power plant 20 miles east of the capital, has a small one-bedroom flat. For heating, hot water and electricity he pays £60 per month – in winter. £60. There’s no zero missing.

Actually, the parent company Reykjavík Energy (RE) not only provides electricity and geothermally heated hot water via district heating it also delivers cold water for drinking, fire fighting, a fibre broadband network and waste-treatment facilities.

Reykjavík Energy is owned by the City of Reykjavík (93.5%) and the Municipalities of Akranes (5.5%) and Borgarbyggð (1%). How was the whole venture financed? By equity they raised and from financial institutions. That’s powerful, municipal muscle.

Its mission statement states: “RE is a power and utility enterprise that lays the foundations of the quality of life in the municipalities it serves. The company … shall ensure service to its customers at reasonable and competitive prices.”

Wow. Just like energy used to be in Scotland pre-Thatcher and pre-privatisation. Publicly owned and affordably priced.

Can Scotland learn from this?

Obviously, we haven’t got such abundant geothermal resources (though there is potential in the granite that dominates Aberdeenshire and the Grampians.) But we are awash with other renewable energy sources – including hydro which also provides the bulk of Icelandic electricity while geothermal does the heating.

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In fact, the big difference is not the nature of the renewable resource – it’s the fact that energy is publicly not privately owned in Iceland and owned and managed by local councils not the central Icelandic government.

Actually, that’s the same in Norway where 55% of the country’s massive hydro resource is owned by 357 municipal councils, while the other 45% is owned by farmers, county councils and the Norwegian state. Some councils work collaboratively like Iceland’s Orkuveita to deliver the big energy projects but none feel they must merge permanently into whopping great, remote and centrally directed councils like Scotland to deliver.

I hope you’re getting the drift.

Iceland owes its success, comfortable relaxed lifestyle, industry (which features both clean industries like algae production and relatively polluting ones like aluminium) and above all its affordable warmth to renewable resources owned by local councils.

And I mean truly local. Iceland has 64 councils and 383,700 people. That means an average council population of 6000.

Scotland has 32 councils and almost 5.5 million people. That means an average Scottish council population of 172,000. Who has really powerful, effective local government? It’s not us.

Our massive councils aren’t doing anything as useful as owning and managing affordable renewable energy resources. Why not?

That’s one of the questions asked by the Build a Local Scotland campaign which launched last month in Edinburgh.

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It is cross-party and involves former council leaders, activists like myself and trade union bosses – some of them Labour party members. The point being that we could transform the nature of Scottish democracy right now using the current powers of the Scottish Parliament. Yes, folk like myself want independence, but we don’t all need to agree on the final stop to get further along the road towards local democracy.

Scotland is one of the most centralised nations in Europe with Holyrood, quangos and “local councils” the size of small countries sooking up powers that have stayed grassroots everywhere else.

The promise that power would be decentralised was part of the devolution deal in 1999, but it hasn’t been kept these last 25 years.

As a result, Scottish councils oversee an average population of 172,000 people compared to 10,000 across the EU and the councils we do have are too large to be local yet also too small to be strategic.

It’s a mess and the Build a Local Scotland coalition is calling for the creation of powerful city, town, island and local councils – not further centralisation, or the top-down imposition of elected mayors.

Keir Starmer excluded Scottish councils from his recent Nation and Regions event, suggesting our councils will keep being carved out unless we knuckle down and create the whopping combined authorities Labour pushed through 15 years ago.

Let’s not get side-tracked from rebalancing Scottish society away from hierarchical Britain and towards tried and tested European norms – local, powerful and participative.

It’s time for Scotland to ditch the “big is beautiful” mantra that explicitly or implicitly guides every decision and invest faith and cash in small town and island councils.

Why? Smaller councils mean more folk stand for election – in Norway it’s one in 88, in Scotland one in 2071.

Non-pensioners can become councillors (and in Norway they don’t actually get paid) because meetings are held after work, so folk can have study or day jobs and get back home after meetings.

In Sweden, councils are funded by basic rate income tax – higher rate taxpayers fund central government thus cutting out the expensive “middle person” and guaranteeing 92% turnout at local elections. Why not – they’ve got your money.

But small councils also develop resilience.

Last week I also visited the Westman Islands – an archipelago of 15 islands and 30 rock stacks off southern Iceland.

The main island, Heimaey, witnessed a massive volcanic eruption in 1973. Luckily, the weather on that January night was so bad that the fishing fleet was tied up in the harbour, so that 4000 men, women, children were taken safely to the mainland.

But seven useful, practical men stayed – amongst them the town engineer, fire and police chiefs and the medical officer – because the Westman Islands are a powerful, wee municipal council.

So, these seven were already used to managing their island. They knew where crucial water and electricity pipes and cables lay and they had the confidence and authority to act quickly – without suggestions or permission from Reykjavik.

So, as a finger of lava rolled towards the narrow inlet that connects the harbour to the sea – crucial to Westman’s survival – the council group acted.

They got fire engines, then a dredger, then other fishing boats to spray sea water via hoses on to the face of the lava, redirecting it to fill a previous gap in the harbour wall.

The island was saved, the harbour improved and when the clear-up was complete, islanders benefitted from ultra-cheap geothermal heating for the next 10 years.

None of this would have happened if islanders had been overseen and second-guessed by sources of distant authority as they are in Scotland.

Of course, the big eye-opener in Iceland is the incredibly low cost of heating. But the big learning should be their system of truly empowered local councils.

Is anyone in the Scottish Parliament ready to follow their lead?

Sign the local democracy declaration at www.buildlocal.scot

A new film – Fire in Iceland – will be on YouTube before Christmas.

Lesley’s trip was supported by Easyjet, Inspired by Iceland and Visit South Iceland