Mutuals in the public sector: Supporting the Brave

Employee ownership can transform the public sector

Task Forces come and go. Some have dramatic success and others disappear into the long grass of political life.

The independent Mutuals Task Force (MTF) is no ordinary Task Force though. The remit of the MTF is to help public service entrepreneurs to spin out the services they manage into new businesses that are now commonly referred to as mutuals. As such the MTF is centrally involved in an emerging revolution in our public services – put simply, it is supporting the brave.

The MTF is, in the words of its Chairman, concerned with "unleashing the power of employee ownership and control". Its final report, published today, will be listened to right across the political spectrum.

Mutuals are officially defined as new businesses that have high degrees of employee ownership or control that have left their public sector parent body in order to manage and expand public services.

There is a wide variety of models and types of mutuals in terms of their legal form, business model, membership, stakeholders and investors, and they currently operate, or are being developed, in almost every part of the public sector.  There is now compelling evidence that public service mutuals raise the quality of the public services received by users, increase the returns on investment for commissioners and deliver many benefits for employees.

The Task Force report lauds the progress of public service mutualisation so far. But any revolution that seeks to change any ancien régime requires more and more collaboration from some key players inside that regime. And so, with clarity, the Task Force report makes a series of future demands on Government as a whole, individual departments, local councils, health bodies and also investors.

But the biggest "asks" are of Government. Hence, it advocates aggressive promotion of the Right to Provide – a key measure that gives employees the right to take over the public services they deliver.

It asks for proactive marketing of the range of information, advice, mentoring and finance that is available to employees contemplating mutualisation, and seeks an end to the current situation in which many new and existing mutuals compete for new contracts within processes that are designed for, and favour transactions with, large, long established, corporate organisations.

It encourages public service decision makers to overcome, via their pursuit of value for money, the cultural opposition of some of their colleagues to mutualisation in principle, irrespective of the evidence. And it does all this in the same breath as praising, quite rightly, the impressive work in support of public service mutualisation going on within some parts of Government.

It is a request for faster travel in the current direction. The recommendations and more are set out in detail in the Task Force report. Their implementation will need a major further injection of resource, energy and enthusiasm by and within Government and huge further changes in its operational behaviours. The implications for Government if it agrees with the recommendations are enormous.

This will only happen if diversification of public service delivery remains a priority for the Coalition.

I hope that the main recommendations in the report will be endorsed and acted on. I say that because I want to see a permanent obligation on Government, regardless of its political colour, to play a leading role in removing the barriers faced by employees who want to improve the services we depend on by setting up employee owned public service mutuals.

If the MTF report’s recommendations are implemented it will be fantastic to see even more public service entrepreneurs – the brave - as a direct result of that. If they are not implemented – the brave will remain the few.

Central Surrey Health is one of the largest public-sector mutuals in operation today

Iain Hasdell is the chief executive of the Employee Ownership Association the voice of employee owned businesses in the UK and a member of the Mutuals Task Force.

How Jim Murphy's mistake cost Labour - and helped make Ruth Davidson

Scottish Labour's former leader's great mistake was to run away from Labour's Scottish referendum, not on it.

The strange revival of Conservative Scotland? Another poll from north of the border, this time from the Times and YouGov, shows the Tories experiencing a revival in Scotland, up to 28 per cent of the vote, enough to net seven extra seats from the SNP.

Adding to the Nationalists’ misery, according to the same poll, they would lose East Dunbartonshire to the Liberal Democrats, reducing their strength in the Commons to a still-formidable 47 seats.

It could be worse than the polls suggest, however. In the elections to the Scottish Parliament last year, parties which backed a No vote in the referendum did better in the first-past-the-post seats than the polls would have suggested – thanks to tactical voting by No voters, who backed whichever party had the best chance of beating the SNP.

The strategic insight of Ruth Davidson, the Conservative leader in Scotland, was to to recast her party as the loudest defender of the Union between Scotland and the rest of the United Kingdom. She has absorbed large chunks of that vote from the Liberal Democrats and Labour, but, paradoxically, at the Holyrood elections at least, the “Unionist coalition” she assembled helped those parties even though it cost the vote share.

The big thing to watch is not just where the parties of the Union make gains, but where they successfully form strong second-places against whoever the strongest pro-Union party is.

Davidson’s popularity and eye for a good photo opportunity – which came first is an interesting question – mean that the natural benefactor in most places will likely be the Tories.

But it could have been very different. The first politician to hit successfully upon the “last defender of the Union” routine was Ian Murray, the last Labour MP in Scotland, who squeezed both the  Liberal Democrat and Conservative vote in his seat of Edinburgh South.

His then-leader in Scotland, Jim Murphy, had a different idea. He fought the election in 2015 to the SNP’s left, with the slogan of “Whether you’re Yes, or No, the Tories have got to go”.  There were a couple of problems with that approach, as one  former staffer put it: “Firstly, the SNP weren’t going to put the Tories in, and everyone knew it. Secondly, no-one but us wanted to move on [from the referendum]”.

Then again under different leadership, this time under Kezia Dugdale, Scottish Labour once again fought a campaign explicitly to the left of the SNP, promising to increase taxation to blunt cuts devolved from Westminster, and an agnostic position on the referendum. Dugdale said she’d be open to voting to leave the United Kingdom if Britain left the European Union. Senior Scottish Labour figures flirted with the idea that the party might be neutral in a forthcoming election. Once again, the party tried to move on – but no-one else wanted to move on.

How different things might be if instead of running away from their referendum campaign, Jim Murphy had run towards it in 2015. 

Stephen Bush is special correspondent at the New Statesman. His daily briefing, Morning Call, provides a quick and essential guide to British politics.

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