Power to the public sector?
This week the Conservatives set out plans to let public sector workers take control of the organisations they work for.
Allowing staff from job centres to call centres to form employee-owned co-operatives to deliver services was pitched by leader David Cameron as 'the most significant shift in power from the state to working people since the sale of council houses in the 1980s’.
Elsewhere in the media and the blogosphere the announcement has drawn a variety of reactions.
Phillip Blond, director of ResPublica, the thinktank linked to the party, said the proposals demonstrated the Conservatives understanding of ‘the innovative and radical potential of co-operative public sector ownership to transform for the better our struggling public services’.
With Labour also embracing the concept, he added: ‘An important new centre-ground is forming; an Ownership Debate that promises to help us create better public services more efficiently - and extend the beneficial effects of ownership throughout society.’
But Labour said their concept differed from the Tories. At a speech at a Progress event as far back as December last year, cabinet office minister Tessa Jowell contrasted Labour's ‘progressive’ approach - rooted in the party’s past but learning from current co-operative models - with the Conservatives' 'easyGovernment' view of the state, a debate that has subsequently been characterised as ‘John Lewis or Easy Jet’.
This week she pointed to the 1.3m staff, patients and local people that make up Labour’s foundation hospital trusts and contrasted it with the Conservative Co-operative Movement that lacks members and has never held an AGM two years after it was founded.
The news also drew a rather cool approach from the Financial Times, which listed three reasons why Tory co-operatives ‘may be a radical idea that few workers will want to take up in practice’. The FT’s Westminster blog said, along with risk of failure and flexibility issues, demand could be a real sticking point, citing the example of limited take-up on the current NHS ‘right to request’ scheme.
The response was warmer from the Community Development Finance Association (cdfa) whose chief executive Bernie Morgan welcomed what she termed ‘the Conservatives’ focus on social enterprise’.
‘They need to apply the same sort of ethos to the financial services sector, especially as the new cooperatives they are looking to establish may be combining public funding with new forms of investment,’ she said.
‘Community development finance institutions (CDFIs) specialise in providing this kind of finance, and are social enterprises themselves. We want to see the Conservatives’ thoughts on how they’d scale up this sector.’
BBC business editor Robert Peston said the Conservatives saw their concept as ‘liberation from the stultifying control and bureaucracy of the state’ but added that: ‘Others will fear it is another nail in the coffin of a public-service ethos’.
He also posed the question of what would happen if and when a social enterprise delivering public services went bust.
Commentator Rob Greenland from The Social Business responded that the state had stepped in when Secure - a social enterprise which delivered healthcare services in a prison - went out of business, but he finished on another question: whether the real agenda behind the Conservative proposals was, in fact, privatisation.
‘Social enterprises are the (fairly) politically acceptable face of outsourcing of public services,’ he said. ‘But do they just prepare the ground for greater private sector involvement?’
Posted on Tuesday, 16th February 2010 | This entry has 4 comments
Your name » | Tuesday, 16th February 2010 | 12:50 PM
David Cameron’s assertion of ‘the most significant shift in power from the state…” pinpoints the paradox at the centre of this policy initiative. Co-operative models are fundamentally about the employees (we used to more often call them workers) owning and controlling the assets - being able to make their own decisions about the purpose, strategy and operations of the ‘business’.
This on the surface, seems an insurmountable barrier to the co-operative model working within public services. Public services must (in theory?) be accountable to the electorate, through politicians and in turn through senior civil servants. Public-owned assets and services cannot be handed over to third parties - with a claim at one and the same time that they are still publically owned assets and services.
I’m reminded of how in the early 1970s there was a series of tenant managed co-operatives in Glasgow that arose from the long-standing lamentable treatment of council tenants by the virtual-monopoly Glasgow Labour Council. These co-operatives operated well and gradually began to grow in profile and popularity. Then there was a change in UK Government and the Conseratives’ Right to Buy. It was ironic that the very successes of tenant self-management is what led to their housing stock being early targets for Right to Buyers… result? Virtual end of tenant management co-operatives. The model was fundamentally flawed from the outset because the co-operative members had no ownership of assets and, in reality, no say over the fundamentals of the business. The true decision-makers were the local and national politicians.
Edward Harkins | Tuesday, 16th February 2010 | 01:01 PM
Sorry mods, I failed to add my name to the preceding post
Simon Cooke | Tuesday, 16th February 2010 | 01:08 PM
Who’s assets? Our assets not public sector producers - so TMOs, patient-led health services etc. But producer-led co-ops? Not so sure about this…
Kevin Maton SEWM | Tuesday, 16th February 2010 | 02:03 PM
Most of the larger public service transformations that have followed a social enterprise approach have not been set up as co-operatives. In the West Midlands Trusts or CICs for example are running groups of leisure facilities and health services.
The opportunity for such transformation of services has been around for years - day and residential care services for older people and those with disabilities for instance. The fact that such services often ended up in the private sector should be a warning to those wo want to see public services move to the social enterprise sector. Restricted access to finance, lack of the full range of commercial skills, bias amongst service commissioners are just some of the barriers that will affect this area.
It will need an expansion of appropriately trained business support providers and expansion of the CDFI sector, for example, if this is going to be a major and positive step forward for service beneficiaries and the people who work in those services.