By David Bicknell
For those contemplating setting up public sector mutuals, the headline on a piece by Craig Dearden-Phillips in the Guardian about their legal and contractual prospects may start ringing alarm bells.
“Are public sector spin-outs on shaky ground?’ sounds a very pessimistic view in the wake of a successful action by Michael Lloyd to prevent 3000 NHS staff being transferred into Gloucestershire Care Services, a new social enterprise.
The outcome of the case, as Dearden-Phillips points out, is likely to affect the way in which the NHS and local councils approach the question of how they set up mutuals and social enterprises.
“Last week’s events in Gloucestershire were, without doubt, a setback for the mutuals agenda in the NHS and councils,” he says. “Lloyd may well rue the day he took the action he did, particularly if those NHS services end up in the hands of for-profit operators. But Gloucestershire was not a decisive reversal. What events there showed was not that spin-outs from public bodies cannot be engineered, but that those leading them need to navigate the law, and public opinion, with care.”