Public sector workers are being urged to set up John Lewis-style co-operatives, offering everything from probation services to tax collection, in what is being billed as potentially one of the biggest transformations of state provision since the privatisations of the 80s. The Cabinet Office minister Francis Maude said today that he envisaged mutuals developing in NHS trusts, Sure Start centres, children's services, welfare provision and the civil service. He even said they could be formed in the Inland Revenue.
“You go to John Lewis to buy a sofa or a fridge, not to have chemotherapy.”
Tony Woodley, Unite
The aim was to liberate public sector workers and "introduce radical shifts in ownership, accountability and financing", he said. "Every government department and every local council will be expected to put in place a right to provide, with the ultimate decision to go ahead resting with the relevant minister." But the scale of the government's ambitions for public service reform raised fresh concerns that the programme could lead to creeping privatisation.
Peter Holbrook, chief executive of the Social Enterprise Coalition, welcomed the announcement but said: "Without the necessary safeguards there is a danger that the mutuals could be demutualised and sold off to the private sector, reminiscent of what happened to British building societies in the 1980s. It would be criminal to see that happen to our public services. All mutuals need to be asset-locked to ensure that they operate for the benefit of the public, forever."
Ministers are open-minded about the form such mutuals and co-operatives will take: some could be independent of the state, some could be joint ventures with the state and others would include users of the service, such as tenants. Maude said he was neutral over whether private companies should seek to take over the more successful enterprises, but said he would prefer the public sector to retain a stake.
The new "right to provide" provision will be coupled with a new community "right to challenge": local people or employees will be able to demand the right to run a service where they believe they could run it better than failing local authority management. A localism bill is likely to be published next week.
Maude's proposals represent a big extension of an existing right to request to provide services in the NHS, which was set up by the last Labour government. That has seen a total of 38 social enterprises established providing services worth £900m.
Union leaders accused the coalition of putting dogma before delivery. Tony Woodley, the Unite joint general secretary, said: "There is no appetite from the public sector workforce or the public generally for these so-called co-operatives. It is insulting to think that these DIY co-operatives, set up on the cheap, can replace a well-established and joined-up public sector.
"To think that cancer treatment can be equated with the values of the retail sector beggars belief. And to keep repeating the words 'John Lewis' as the reasoning for these changes is just mangling and perverting the English language. You go to John Lewis to buy a sofa or a fridge, not to have chemotherapy."
Maude insisted that experience showed mutuals were successful because they gave employees an emotional stake in the organisation. Mutuals would "challenge traditional public service structures and unleash the pent-up ideas and innovation that has been stifled by bureaucracy".
Setting aside £10m in extra funding to help with start-up costs, he announced a green paper on commissioning to make it easier to win contracts and said the "big society" bank could be drawn upon to extend mutuals in the public sector.
A stumbling block to the spread of mutuals in the public sector could be fears of job insecurity or loss of state-supported pension rights. Maude acknowledged that if public sector staff bid to run a service, they might also find themselves subject to EU law requiring there to be a competitive tendering process.
The Guardian
