Amid the gloom of the eurozone crisis and ongoing economic challenges in the UK, a quiet revolution in public services continues to gather momentum. More and more public sector entrepreneurs are spinning out the services they manage into new businesses that are now commonly referred to as mutuals.
The final report of the independent Mutuals Taskforce, published this week shines a light on this revolution and the work of the public service pioneers that are its protagonists.
Mutuals are officially defined as new businesses with high degrees of employee control that have left their public sector parent body to manage and expand public services. There are a wide variety of models and types of mutuals and they currently operate or are developing in at least ten different sectors, including health, children and adult social work, fire and rescue services and youth services.
The Mutuals Taskforce report celebrates the pace and scale of public service mutualisation. It also sets out the compelling evidence that public service mutualisation raises the quality of the public services received by users, increases value for money and improves wellbeing and working conditions for employees.
The casestudies in the report reflect the successes of the early pioneers, but we are also clear about the challenges faced by employees keen to set up mutuals, including the ineptitude of some commissioners and the cultural opposition of some senior stakeholders.
The report also tackles the problems that existing mutuals face, including competition for new contracts within processes that are designed for and favour transactions with large, long-established, corporate organisations.
Consequently, in its recommendations for increasing the current momentum, the report is not complacent about the future. Instead it is brutally clear on the steps that government as a whole, individual departments, local authorities and investors need to take.
We urge government to promote and embed within all departmental business plans the right to provide – a key measure that gives employees the right to take over the public services they deliver. It asks government to proactively market to employees contemplating mutualisation, the range of information, advice, mentoring and finance that is available to them, to encourage them along the journey to spinning out.
It pleads with government in its role as the direct and indirect commissioner of public services to be more sympathetic to existing and new mutuals each time it makes procurement decisions. And it suggests that new incentives and additional refinements in the taxation arena are required.
Public service mutualisation has not yet reached that critically necessary tipping point beyond which it will become mainstream. Getting there requires a major further injection of resource, energy and enthusiasm by and within government. This is not optional.
We should, though, be optimistic. The government has already contributed a great deal, especially via the cabinet office (through the work of the mutuals support programme) and the Department of Health (in its promotion of the right to provide and the right to request). And there is genuine commitment from many ministers, most notably Francis Maude.
So we can hope with confidence for a very positive response to the report, and I look forward to seeing the band of public service mutual pioneers grow in number as a result.
Iain Hasdell is the chief executive of the Employee Ownership Association and a member of the Mutuals Taskforce
