Could a new mutuals model work for trading standards?

By David Bicknell

A mutuals-like model for trading standards has been proposed by Consumer Focus, the statutory consumer champion, which in a paper, discusses the future of trading standards in light of spending cuts, the Government’s new empowerment strategy and changing consumer power.

The paper, ‘Hard times or our mutual friend’, by Paul Connolly,  is an excellent read and argues that the Trading Standards community should engage with another Government agenda:  mutualisation.

It says:

“Cabinet Office Minister Francis Maude wants to see mutuals widely adopted. He suggests within 10 years they will become ‘one of the major types of organisation providing excellent public services’ in a redistribution of power and ownership comparable with 1980s reforms.

“His reasoning is clear. First, he wants to continue the process of public service reform by ensuring direct ‘in-house’ delivery continues to be ‘contested’. In the past this primarily meant outsourcing. Plainly under this administration private providers will continue to feature in service delivery. However, the Government has indicated it wants a more diversified range of providers, including more small and medium enterprises (SMEs).

“Further, creating mutual structures can contest services, while empowering staff and short circuiting the public/private antagonism.

“Indeed, workforce empowerment is key. Mutualisation and outsourcing to SMEs, cooperatives and charities, are both connected with Big Society thinking. Government wishes to divest itself of direct responsibility for state delivery, but to do so in ways which spread associated commercial opportunities to those who have not benefited previously.

“This includes giving opportunities to existing public sector staff. Indeed, enthusiasts for mutuals believe workforce energies can be harnessed to support reform. Frontline staff understand their services, but are often inhibited from innovating by constraining bureaucracy.

“Decoupling mutuals from bureaucracies and giving staff stakes that link productivity to personal rewards encourage entrepreneurship and improve standards.

“Mutuals are not a ‘fluffy’ option. They are run as businesses. But the staff engagement model of mutuals, where rewards are linked to innovation, service improvement and productivity gains, means there is a real prospect of harmonising the interests of service producers and the individuals and communities they serve.

“There are many challenges associated with mutualisation. Is the largest public sector retrenchment in history the ideal moment to encourage people to risk a semi-commercialised model of delivery? Should staff downsizing precede or follow mutual incorporation? And how on current trends will the numbers mutualising substantiate Maude’s claims of an importance comparable with privatisation?

“The 12 pilots on the Cabinet Office website are pretty small, niche services, mostly in the health and social care arenas. Small and mutualisation might be perceived as a natural match, but there’s nothing to stop a whole agency, hospital, or local authority mutualising, John Lewis-style, or a series of small thematically-linked mutuals being incorporated under a franchising umbrella, like the Co-Op. Whatever, a substantial increase in adopters will be needed to match Maude’s ambitions. That will mean lots of services taking a risk. The danger for this intriguing agenda – which has attracted interest across the political spectrum – is that it doesn’t fly because volunteers are few.

“Nevertheless, Government continues to signal its intent in this area. Mutualisation is being strongly encouraged in areas of health, such as community care. The Public Services (Social Enterprise and Social Value) Bill is intended to put wind in the sails of mutualisation, while the Localism Bill calls for staff-managed approaches to be among the options considered in re engineering local services.

“The Trading Standards profession could do Francis Maude and themselves a favour by ‘going mutual’. Under the leadership of the Trading Standards Institute (TSI) – itself already in effect a social enterprise – and the Trading Standards Policy Forum, with possible input from Local Better Regulation Office (LBRO), one of two approaches could be adopted: a national super-mutual, covering England initially, but evolving to the devolved contexts following suitable negotiations, could be formed.

“It would be a single incorporated body. It would have a national head office. It would co-ordinate the use of any resources it received from central Government (the implied new BIS monies for instance) to address complex, nationwide and international threats. It would oversee and co-ordinate the delivery activities of suitably located regional, sub-regional and local offices.

“The mutual’s services would be purchased by local and central Government to meet statutory Trading Standards obligations.

“A second option, perhaps more realistic given that some Local Authority Trading Standards Services (LATSS) partnerships have already incorporated as businesses, would be for TSI and the other players to create a mutuals confederation. This would be a franchise support hub for a national network of local mutuals, each created as and when individual LATSS departments chose to incorporate. The hub would again attract funding for national projects and but would also co-ordinate the activities of the network, providing mechanisms for collaboration between local mutuals, and new sub-regional and regional structures, where appropriate.”

It is intriguing to see the mutual model being considered in this way. I hope for those considering creating mutuals, that the Consumer Focus trading standards paper might offer some useful ideas. It’s certainly worth a read – and we’d be interested in your comments.

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