MUTUALISM, CO-OPERATIVES AND THE PUBLIC SECTOR
Moving towards mutualism and the John Lewis model?
The crisis in our democracy, with rather too many electors feeling disillusioned and disengaged with the political process and not much trusting politicians either, combined with concerns over the quality and productivity of public services , has prompted some urgent new thinking within Government circles and among opposition parties about the democratic deficit and how we can better deliver public services and make them more responsive to demand.
Over the last ten years, our public services have experienced a real terms funding increase of 55 per cent, financed by an increase of 5 per cent of GDP in public expenditure since 2000. Yet public sector productivity has continued to fall: by 3.4 per cent over the last ten years, compared to the private sector’s 27.9 per cent productivity gain over the same period. Gordon Brown has praised the John Lewis shared ownership model and there is a growing feeling that if only stakeholders had greater ownership and engagement with public services they would be more efficient and deliver better returns.
David Cameron has said he would unleash “a new culture of public sector enterprise and innovation” by allowing state employees to run their own co-operatives. He preaches civic conservatism: responsibility (both individual and fiscal), devolved power and radical enfranchisement.
The Tories believe that workers in places like primary schools, Jobcentre Plus offices and nursing teams should be able to form employee-owned co-operatives to deliver services and workers in most areas of the public sector would have the right to form a co-operative.
Some new free schools might also be run as co-operatives . In a speech in Manchester in 2007 Cameron claimed that “ our schools reforms will create for a new generation of co-operative schools in our country. We talk a lot about parental involvement in education. We know that if parents have a say in how their school is run, if they feel that their view matters and their wishes count, the school is always better. What better way, then, to give parents direct involvement in their school than to give them ownership of it? To make them not just stakeholders, but shareholders – not of a profit-making company but of a co-operative built around the needs of local children? Down the road from here, Reddish Vale City Technology College is consulting on whether it can establish itself as a co-operative using recent legislation on Trust schools. The Co-op Bank is involved in supporting one of the new Manchester Academies. I welcome these initiatives and I want to see more of them across Britain.”
Cameron noted too that in other countries co-operative education is central to the system. Over 100 schools in Sweden are co-ops and over 600 schools in Spain.They also have teacher co-operatives in the States, under the umbrella of the Charter schools movement
So he wants to explore how we can create a new generation of co-operative schools in Britain – funded by the taxpayer but owned by parents and the local community.
These Tory styled Co-ops would continue to be funded by the state as long as they met national standards, but they would have greater freedom from Whitehall control and they would be able to spend any surplus on staff and the organisation. Cameron says that any workers joining a co-operative would be protected by TUPE, the Transfer of Undertakings (Protection of Employment) regulations that protect employment rights when a new employer takes over a business.
But this is all ,unsurprisingly, a little bit galling for the Government and its supporters . Michael Stephenson, the general secretary of the Co-operative party – affiliated to Labour – said the Tories were “completely clueless” about co-operatives. “Mutuality is about giving communities a say in how services are run. That is about more than involving workers, it is about people running services as a community asset. The Tories don’t have co-operative values”.
Cabinet Office Minister Tessa Jowell too has questioned the Tory commitment to co-operative politics. She said: “This announcement would have a little more credibility if the Tories gave any indication at all that they understood what co-operative values mean. But clearly they don’t. Two years after it was founded, indeed, the Conservative Co-operative Movement remains a movement without members, which has never held an AGM.”
The Government has its own plans for mutualism. Already a number of so-called Co-operative schools are up and running although it is becoming clear that the label co-operative embraces a broad church including some types of social enterprises. The government has also just announced a “mutual manifesto” to allow people to own and run a plethora of local services including council estates and SureStart centres. Parents will be able to join with the staff to run a network of local children’s centres as part of a “federation” of SureStart centres. The plan will see five federations set up, each made up of around 20 SureStarts.
Publishing the document last week , Tessa Jowell said: “This is the moment for mutualism. In the wake of the global financial crisis and the parliamentary expenses scandal, it is clear that people are no longer prepared to trust large organisations over which they have no control. Our response means a new approach and a new relationship between the institutions of government and the people that they serve.”
“Red Tory” Phillip Blond, has outlined a number of ideas in a pamphlet produced by the new think tank, he heads, ResPublica. He argues that the way to unleash the energies of frontline staff and citizens and scale up their impact is through the power of shared ownership. He proposes a new model of public sector delivery, in which services are provided by social enterprises led by frontline workers and owned by them and the communities they serve. These new social businesses would exchange economies of scale (which are all too often illusory) with the real economies that derive from empowered workers and an engaged public.
The idea is that the involvement of both the public and frontline workers provides a vital safeguard for the interests of the vulnerable: a powerful public stake prevents organisations from becoming producer interest groups, while the role of public sector experts helps ensure fair and high quality provision.
To deliver this, Blond recommends that a new power of civil association be granted to all frontline service providers in the public sector. This power would allow the formation, under specific conditions, of new employee and community-owned ‘civil companies’ that would deliver the services previously monopolised by the state.
Tony Blair ,when he was elected in 1997, talked much about the so-called third way and this new drive towards mutualism and social enterprises, more generally, seems to be a variant of this. But there are a number of practical and political problems in the way-not least a lukewarm response to date from unions- and so there is some way to go before this idea takes flight in practical form, on a significant scale.