Public sector mutuals won’t happen if we don’t take local pressures seriously

Phil Copestake is head of communications and strategy at the Office for Public Management, and leads on OPM’s work to support public sector mutuals. 

Phil Copestake, OPM

The serious potential of staff-owned mutuals for public sector improvement and reform is in real danger of being wasted if we don’t pay more attention to tough political realities in local areas. On the one hand the time for mutuals has arrived: councils and other public bodies have cut away what they can, and can only look to more radical solutions. Employee-owned mutuals can and should be a vital weapon in the innovation armoury.

But I think we are probably seeing the cresting of the mutuals wave unless, that is, we take a really hard-nosed attitude to making the case for mutuals – to local commissioners and politicians. If we don’t, the momentum created by all parties latching on to ‘the John Lewis model’ and the Coalition committing to a significant increase in employee ownership will have been for nothing (what one might call ‘Big Society Syndrome’).

Those of us who spend much of our working lives talking and thinking about mutuals are fond of saying ‘the benefits of employee ownership are well known’. Well actually, for local decision-makers – elected members, senior managers, commissioners – that’s usually not the case. Only yesterday I had a council director ask for an ‘idiot’s guide’ to mutuals: he wasn’t the first, and he certainly won’t be the last.

And actually, who can blame him? Awareness amongst key people in the vast majority of local levels is very low. But even if it was high, it’s right about now that the financial squeeze on local public services is beginning to really, really be felt. Local authorities are now into planning mode for ‘round two’ of post-spending review budgets. Having cut away everything they could first time around, the only choices that remain are deeply difficult ones.

What this means is that – in my experience anyway – council decision makers care about two things, and often two things only: maintaining a level of service so that outcomes do not seriously worsen, and 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.

How can these challenges be overcome? The long-delayed Mutual Support Programme (the £10m you may remember hearing about a year ago) may help, but actually if it just engenders another ‘funny money’ bidding round then it won’t address the fundamental issue that the people in power at local level are not yet on board with the serious potential of employee ownership.

The answer is probably something that sounds familiar, but only because we haven’t cracked it yet. In her excellent post on this blog last week, Hannah Jameson from the IPA hit the nail on the head: when she said that knowledge networks are notoriously weak in the public sector, but emphasized how essential they are for new public service organisations to have a real impact.

This is overwhelmingly true in the case of mutuals. 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.

Organisations like the Transition Institute have a vital role to play here, as do sector bodies like the LGA and, dare I say, Whitehall too. Because without systematic, properly supported joining up, the mutuals reform programme will never become more than a series of isolated experiments.

If you’re interested in hearing more about OPM’s practical work to help managers and staff make the case for mutuals in local areas, then visit our blog - http://opmblog.co.uk – and subscribe for updates. You can follow Phil on Twitter @philblogs.