Category Archives: mutualisation

Getting the mutuals message across more effectively through knowledge networks

By David Bicknell

Despite all the discussion about mutuals – scarcely a week goes by without a new feature being written in a trade magazine about them – it seems the message has yet to reach some councils. A recent Transition Institute blog recently cited having to give a council director an ‘idiot’s guide’ to mutuals.

The blog made the excellent point that with the financial squeeze on local authorities getting ever tighter,  hard choices are having to be made to maintain public services. It points out that decision makers care about two things: one, maintaining a level of service so that outcomes do not seriously worsen, and two, saving money.

“Supporting staff ownership comes nowhere near these priorities on the agenda, if it features at all. If a staff-owned provider can deliver on both, then great, but a mutual is very unlikely to be given the kind of preferential treatment it needs and deserves to get off the ground if there’s an established voluntary or private sector provider waiting in the wings.”

What will make a difference? The blog suggests that apart from an effective Mutuals Support Programme,  what’s necessary are better knowledge networks than the public sector currently operates which can get over the need for new public service mutuals to have a real impact.

It rightly says: “At the moment we have small-scale, isolated, localised experience: brave pioneers beating a path through dense jungle, feeling like they have to do it all for the very first time, navigating the toughest political landscape imaginable. What we need are networks, a major cross-pollination and peer support effort that goes beyond the vague to the specific and real, and tackles head on the tactics and techniques you need to master to make the case for mutuals, to colleagues and political masters who are unlikely to care all that much.”

Do councils have the management capacity to adopt a mutuals approach?

By David Bicknell

There is more evidence of interest in mutuals in this article from Personnel Today.

It makes some good points, notably that cash-strapped councils may lack the management resource to nurture mutuals.

Peter Reilly, the Institute of Employment Studies’ director of HR research and consultancy, who is quoted in the article, detects a division in local government between those willing to experiment with the mutuals option and those who still need convincing. “I think you have got a much bigger number of councils watching and waiting to see what comes of it,” he says. He questions whether or not councils have the management capacity to undertake such a change “if you are also trying to take out 25% of your costs at the same time”.

It is a view backed by Councillor Steve Reed, leader of Labour-controlled Lambeth Council in London, who told Personnel Today, “It’s a huge ask of the organisation, if I am honest,” he says. “We’re dealing with cuts bigger than managers have ever dealt with in their lives and then you ask them to manage in a completely different way.”

Public service mutuals and their single contracts

By David Bicknell

The Social Enterprise Summit last week carried more words from the wise about the dangers of mutual spin-outs relying on one contract.

“Mutuals need to steer clear of relying on one contract for all their business and income” – that was the warning, apparently, from delegates and speakers at the Guardian’s Social Enterprise Summit.

Comment

Maybe I’m missing something, but how many organisations in business are happy relying on one contract for all their business and income? No business – company, sole trader, never mind mutual – is going to rely on one contract. Those mutual spin-outs that have one are out there pushing for more. They know that putting all your eggs in one basket is asking for trouble. The notion that they would rely on one contract is inaccurate. They may have the one for now, because they’ve spun out, but believe me, they’re not complacently relying on it; they’re out there hunting for others. And yes, to accommodate that hunger, contracts and procurement will have to change.

Making the case for “tilting the table” for mutuals

By David Bicknell

A recent get-together organised by Stepping Out discussed the landscape for mutuals and asked what needs to happen to get the mutuals show on the road.

The discussions are summed up in this well argued blog by Craig Dearden-Phillips.

A few paragraphs caught my eye:

“The general view in the room is that financial weakness – in the form of small balance sheets – is a disadvantage facing spin-outs tendering for contracts. There appears to be a truth that when tenders come up, this sector struggles to show the financial ‘leg’ necessary to get nervous public sector commissioners into bed. Instead they bee-line for safer-looking super-providers. Some would argue that social enterprises should be ‘gifted’ public assets in the form of property to address the balance sheet issue.

“Therefore, to what extent Government should ’tilt the table’ and if so how was one of the talking-points. There is a natural reluctance in many quarters of too much government intervention in markets of any sort. ‘Best is best’ is a common watchword in the world of public procurement. How to behave in markets is also a big question for spin-out organisations. Are they best, in the longer term, to partner up or even fold-in larger healthcare groups in order to gain efficiencies and achieve long-term stability? Or is this too much of a compromise that would water down their raison d’etre as socially focused organisations?

“This one of the unresolved questions facing spin-outs in this sector, particularly as they come up head to head with organisations whose chief competencies lie not in actual service delivery but the winning and fulfilment of contracts, often with third party deliverers.”

The blog makes some good points and appears to sum up the key issues facing mutuals.  To deliver any sense of a future for spin-out mutuals, the question is not whether to tilt the table, but how and when.

Without commissioning reforms, no mutuals within five years, only outsourcing companies

By David Bicknell

The government has been put on notice to find ways of making life easier for mutuals – or suffer the consequences.

As Public Finance reports, Patrick Burns, a member of the Cabinet Office Mutuals Taskforce, has warned that without changes in the way outsourcing contracts are awarded, spun-off mutuals could fail within five years.

Burns said: ‘If you don’t do something with the commissioning environment, then in five or ten years time you will not be dealing with mutuals, you will be dealing with [outsourcing companies] Serco, Capita and Virgin. Not that they are bad companies, but it’s not the point.’

UN asked to help create a ‘level playing field’ for co-operatives

By David Bicknell

There is a growing call from the mutuals and co-operatives sector for the business environment to be made friendlier to enable them to thrive.

That message has now made it to the United Nations, where Dame Pauline Green, President of the International Co-operative Alliance, called for nations to take co-operatives much more seriously. 

As Co-Operative News reports, Dame Pauline said, “..member-owned co-operatives are a serious business model – with scale. And so, co-operatives are asking that the specific and unique legal and financial framework of a co-operative is fully acknowledged and recognised in public policy and regulation.”

“Co-operatives are asking that there should be a greater diversification of the global economy, to ensure a level playing field for the member-owned model of business.”

Dame Pauline said the sector’s “commitment to our democratic and social agenda is built on a sound and successful member-owned business model” that means operatives can compete successfully in the marketplace with other forms of business.

Time to move beyond ‘Paint it Black’

By David Bicknell

I can see what Craig Dearden-Philips is getting at in this blog, but I’m not sure it needs to paint such a dire economic picture. There is too much talking down of the economy. No-one will spend any money because everyone from politicians to forecasters to social entrepreneurs to journalists  is trying to out-do each other and paint the blackest picture. There’s no leadership there – just followship.

Dearden-Philips argues that “a crisis of the sort we’re probably heading into will, one way or another, make it far more attractive to reinvent than cut back services. Careers – political and professional – will not survive if slash’n’burn is the modus operandi. For those of us who have long been advocating a reinvention of public services this could end up being, our moment.

“So spin-outs, community-based services, co-ops, innovations that allow decommissioning – all of these things could have a political attractiveness that is currently missing. The sadness is that it will take things getting really quite catastrophically bad before that happens.”

He’s right that spin-outs, community-based services, co-ops, innovations that allow decommissioning do need the right landscape to thrive. But how many employees will feel like spinning out when the picture is painted this black? Better to cling on ‘inside’ than venture – an appropriate word – out and create something new. Employee ownership? Out there? No thanks. I’ll just stay here.

If the government wants to see mutuals thrive, it has to paint a picture of opportunity and  create the right environment to create enthusiam, drive, and investment. That means spurning the negative talk that’s all too easy to do and creating the right environment for change and the tools  – finance, procurement etc – to achieve it.

Is the government up to do the job? When it makes its next pronouncement on open public services, it has to provide the impetus to reinforce  a willing mentality that says ‘Yes, can do’ not ‘Paint it Black.’

I’m not saying it’s going to be easy. But that’s what governments are for: to govern and provide the right environment for change. 

Positive thinking, leadership and action please, not negative no-choices. Opportunity; not opt out.

Global 300 co-operatives generate $1.6 trillion revenue

What Mutualism means for Labour

By David Bicknell

It’s interesting that when a word starts to be linked with a trend or movement, everyone wants to be associated with it.

That’s beginning to be the case with mutuals. Now the Labour Party has seen an opportunity to put its definition on what mutuals are, with the publication of a new pamphlet from the Policy Network, called ‘What mutualism means for Labour.’

The Policy Network blog says this:

“The Conservatives, with their rhetoric of the “big society”, seem to have displaced Labour as the “party of ideas”. Their emphasis on empowering communities and decentralising power arguably reflects a cooption of traditional social democratic language and an encroachment on the ideological terrain of the centre-left. Many see mutualism as the left’s answer to the “big society” and a key pillar in Labour’s political economy. However, our definition of mutualism remains unclear and the means to achieve its goals intangible.

“This pamphlet sets out to develop a clear vision of what mutualism means for Labour and how it can be used to drive forward the social democratic project. It brings together prominent thinkers, politicians and strategists to lay down ideas on how mutuals and co-operatives can serve as models of post-crisis reform in both the private and public sectors. ”

Comment

Given that there are employees who want to set up mutuals, a practical, how- to guide might have been more useful, both to the mutuals themselves as well as to Labour in defining its mutuals credentials. Instead, although this pamphlet has some good essays, it is undermined in places by the usual anti-Thatcher fare that’s great for the Labour Party Conference, but not much practical use to anyone else.

“It is Thatcherism disguised as mutualism – witness the recent case of the awarding of a large NHS contract to a private provider. (Virgin Healthcare) rather than an employee-owned enterprise (Central Surrey Health). David Cameron made much play of the work of Central Surrey Health and indeed praised it publicly as an ideal example of what the ‘big society’ stands for. Yet when it came to the crunch, the progressive mutual organisation was gazumped by the private provider, just as Margaret Thatcher would have loved all those years ago.”

There’s also a dig at No 10’s Director of Strategy, Steve Hilton – “We need to authoritatively restate our values of co-operation, solidarity and mutualism in order to expose the difference between our vision of society and our opponents’. The difference between an authentic tradition, built upon the secure foundations of a century’s worth of history, and a ‘tradition’ built upon an overlap in one of Downing Street strategist Steve Hilton’s Venn diagrams.”

Knockabout stuff, but Punch & Judy politics and of little practical help to today’s fledgling mutuals. 

Is this really what mutualism means for Labour?  On the face of it, not much then.

A few words from Francis Maude on mutuals’ pathfinders, skills and leadership

Some key points appear to emerge from this Civil Service Live interview with Cabinet Office minister Francis Maude, who continues to be a chearleader for mutuals.

* Don’t bank on another wave of mutual pathfinders. It seems as if there is an internal debate going on which is erring towards wider encouragement for mutualisation.

* Leadership in setting up mutuals is required – and it may come from outside in stimulating workforce interest.

* Maude is more interested in developing skills in-house rather than hiring external consultants

* Staff shouldn’t be excluded from the opportunity to benefit from the sale of any entity.

The case for partnership between mutuals and the private sector

By David Bicknell

I mentioned yesterday ongoing discussions over the role of the private sector in partnering with mutuals.

There is more grist to the mill here in this blog by Craig Dearden-Philips who argues that “the next year or two is crucial. Partnerships appear to be a sensible way to press on beyond the first wave of early adapters.”