From the TUC

All aboard for public service co-ops?

15 Feb 2010, by in Public services

First it was Tessa Jowell. Now it’s George Osborne.

Suddenly everyone is feeling mutual – wanting to turn bits of public service into co-ops.

I am sure that there is much scope for the extension of mutuals and co-ops in society as a whole (and we should welcome today’s Conservative interest in mutuals – I seem to remember the last Conservative government as a time when the demutualisation of building societies was at its peak.)

And of course many think that Northern Rock should eventually be denationalised by transforming into a mutual.   

Naturally the air is thick today with Labour attacking Conservative plans, but I wonder if they don’t have more in common that the party political dogfight would concede.

Turning parts of the public sector into either worker or community co-ops only works when that part of the public sector can be contracted by another part to provide public services.

In other words this approach depends on the marketisation of the public sector, and the extension of the contract culture.

Many advocates of public service mutualism take this as a given, and I suspect that some of them see it as a way of sugaring an unpopular pill – marketising public services is not popular, but wrapping it up as the extension of co-ops might just make it so.

That is not to say that the approach does not have some merit in some circumstances. One example that the Conservatives give today is that of a doctors’ co-op set up to provide out-of-hours GP services. Given the way we currently structure such GP services this may well be a sensible way to proceed.

There are also practical difficulties, set out here by the FT’s Alex Barker. What happens if a co-op fails? How will they raise capital? What would happen to wages and conditions?

This is not to say that the public sector could not do a lot more to give staff and service-users a real say in how services are organised and delivered. The top-down target culture and the patent lack of trust of public service workers by ministers has turned many public service workers against the government. It does not seem necessary to insist on a mutual before reversing this approach.

update:  Clifford Singer has a more extensive critique at The Other Taxpayers’ Alliance. And he has useful links to Will Davies at Demos , Robert Peston and Dave Semple who are also sceptical.

One Response to All aboard for public service co-ops?

  1. Clifford Singer
    Feb 16th 2010, 1:27 am

    “The top-down target culture and the patent lack of trust of public service workers by ministers has turned many public service workers against the government. It does not seem necessary to insist on a mutual before reversing this approach.”

    Quite right! We’ve given our take (drawing on an excellent analysis by Will Davies at Demos) here:
    http://taxpayersalliance.org/news/mutuals-opportunities-but-also-dangers-for-the-left