EU rules should be changed to give mutuals chance to run public services before full open competition

By David Bicknell

A post by Third Sector has made the case for public spin-outs such as mutuals to be exempted from EU procurement rules.

The piece quotes Stephen Lloyd, head of charity and social enterprise at City of London law firm Bates Wells and Braithwaite, who said that EU procurement rules were  currently based on the concept that public service provision was done either by the state or the private sector.

Lloyd said, “We want to move services out of the state and into a social economy, and the rules are not set up to support that. If you set up a new social enterprise to deliver something that was previously delivered by the state, and it has to compete with big business from day one, it won’t work.

“There needs to be a transition process. These organisations need to be protected. The government needs the agreement of the EU that it’s allowed to do so, and this is its opportunity to get it.”

Third Sector says that the Government’s response to the European Commission green paper is that employee-led spin-outs should have time to run services before having to compete with big business.

In its proposals to the European Commission, the Government says, “The revised Directives should make clear that, in circumstances, such as the development of employee led organisations/mutuals, employees should be able to gain experience of running public services for a period of, for instance, three years, prior to full and open competition.”

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