Tag Archives: ResPublica

Mutualism: “perhaps the most flexible and beneficial way of transforming our public services”

By David Bicknell

Phillip Blond, director of the ResPublica think tank has discussed the future role of mutuals in Serco’s Ethos journal.

Blond suggests mutualism “represents perhaps the most flexible and beneficial way of transforming our public services. Happily, the government is committed to this model: Francis Maude, Minister for the Cabinet Office, has stated that he would like to see a million public sector workers employed in mutuals by 2015. In simple terms, mutualism is based on principles of reciprocity, equity and fairness. It is a system that allows for equity (what you put in and therefore can take out), be that in terms of finance or services, to be realised in any number of ways.”

To achieve the positive transformation of our public services, he says, “we need to find new models of mutualism fit for the 21st century. This means creating innovative ways of bringing together public and private capital, enabling private companies to make a fair return from their capital investments, while at the same time giving all those involved a stake or return of some sort.”

An example, he suggests, comes from the energy sector. “In Denmark, a community will often allow an incinerator to be built in their neighbourhood (in Britain the very idea would provoke mass protest) but they get cheaper electricity in return, often around 30%. The incinerators, designed by the very best architects, cut down radically on waste disposal and landfill. In addition, house price values increase for those on the local energy network because bills are cheaper, and the strategy is seen as ethical. To me, this type of reciprocal economy is a form of mutualism.”

As to whether the government’s goal of seeing a million public sector workers in mutuals by 2015 is achievable, Blond says this,  “It is possible but the challenges are considerable. Many public sector workers are driven by vocation, and if they see that they can provide a better service within a mutual framework, then mutualism in the public sector can succeed.

“But employees can’t be offered risk for no return; you have to offer certain guarantees if you want them to move to a new platform. The offer to public sector workers has to be geniune. It has to be based on an equity stake, on the security of a viable business model (which means good contracts for the initial spin out companies) and on the genuine option of learning new skills, while also letting people share in the efficiencies that result.”

You can read Blond’s piece, plus a response from Jane Dudman here

The Journal also carries a piece on implementing the Open Public Services White Paper

Will George Osborne help mutuals in today’s Budget?

By David Bicknell

There’s an interesting piece on the ResPublica blog today, suggesting that today’s Budget will offer an opportunity to judge the Government’s understanding of, and appetite for, bridging the gap between ambition and action, rhetoric and reality, policy and practice when it comes to mutuals.

The piece, by Dan Gregory,  ‘Can the Budget help the public sector do mutuals?’ suggests we should look out for any promising words in George Osborne’s speech around the public stake in the banks, the future of the remaining arms-length bodies, the future of some of our valued national assets, and keep an eye on public service reforms.

Gregory suggests that “a handful of our local public servants and administrators are interested (in mutuals). So what does this mutual ambition mean in practice for these asset managers, budget-holders and HR managers? Which button do you press to get yourself a mutual? The unspoken truth here – which is beginning to crystallise as the test of this government’s ambitions for mutual solutions – is that the standard levers available to those responsible for delivery probably won’t lead to the creation of mutuals. Keeping services or assets in house certainly won’t and going out to the market, well, unsurprisingly, means the market will decide. So how do you ‘do’ the mutual option? Where’s the lever?”

Gregory says, “We should welcome any practical steps that will truly enable the HR professionals, asset managers and budget-holders to look beyond the options they currently have at their disposal and set the warm words alight.”

Let’s see what Osborne comes up with later today.