From the TUC

Promoting an alternative vision of public service reform

21 Jun 2011, by in Public services

This week UNISON published ‘Mutual Benefit’ an excellent new report looking at the issues of mutuals, co-operatives and social enterprises running public services. The report rightly raises many of the concerns that the TUC shares about the threats posed by this government’s market-led agenda.

But it also points to an alternative approach to public service reform, raising arguments that have been conspicuous by their absence in the current policy debate.  We believe there’s real value in exploring these arguments further.

The report poses the simple but pertinent question:

“If innovation, responsiveness, user-focused services and flexibility are seen as characteristics valued in the mutual sector, what scope exists for their introduction or expansion in the public sector?  And what prevents, or has prevented, their adoption to date?”

But before we look at this further, it is worth reiterating two other points that the author, Steve Davies of Cardiff University, makes in this report.

First, there are a range of assumptions made about the benefits of mutuals on the basis of very little actual evidence.

Francis Maude claims that mutuals “reduce absenteeism, improve performance management, encourage innovation and increase productivity”.   However, the evidence base is patchy to say the least.  The Public Administration Select Committee reported that they “were unable to corroborate” these claims and that “too much of the discussion is still hypothetical and anecdotal”.    The Third Sector Research Centre report on social enterprise spin-outs from the NHS reports an “absence of a convincing body of evidence that such organisations can consistently deliver the expected innovation and efficiencies in health provision”.  And the Department of Health’s own findings are that “the benefits of the social enterprise model are not always clear, not only to potential commissioners, but also to staff and stakeholders”.

This is not to say that employee-ownership is without its benefits.  But the policy agenda is advancing a rapid rate on the basis of speculation and aspiration, rather than firm evidence.

Second, changing structures is less important than changing culture.  Employee ownership on its own does not automatically produce the goods.  What is required is a dynamic process of workforce participation.

One of the more plausible arguments for the benefits of mutualism is that workers become more productive where they have a stake and are engaged in the decision making process.  But this is not exclusive to mutuals.  Evidence shows that productivity and service improvements within the public sector have been derived from greater staff involvement.  Jo Ellins of Birmingham University looked at this within the health service, reaching the conclusion that the organisational model is less important than the culture of employee participation.

The UNISON report is right to ask why the qualities of service user and workforce engagement and participation cannot be applied within a public sector framework.   As Davies comments :

“there is no real reason why mutual approaches cannot be implemented within the public sector.  It does not require a spin-out to involve both staff and users in the service more effectively – particularly in the design, improvement and monitoring of the service.”

In fact, the point is very well made that in-house delivery enables the accountability and long term approach to provide the space, time and managerial support to boost innovation, as opposed to the prescriptive commissioning and procurement process that inhibits innovation and forces independent providers to stick to rigid contract requirements and short term imperatives.

In the TUC report ‘Rethinking Public Service Reform’ we outline a model based on consultation and negotiation between service users, public service workers and the commissioning bodies to identify priorities, strategy and service implementation that best meets the needs of the community, within the context of restricted public resources and an accountable public sector framework.  In this way, services are commissioned in a way that meets local need but balances this with the broader needs of the community, the prioritisation of scarce resources and the promotion of public value.

This model meets the Government’s stated intentions to shift power towards communities and enhances efficiency and flexibility but avoids the harmful and expensive fragmentation and complexity caused by further outsourcing and marketisation.

This requires a culture change across many parts of the public sector and public sector unions need to be at the heart of the debate.  Evidence of good practice is growing but we need to ensure a stronger voice for this alternative approach which is missing from current policy debate on public service reform.

As the UNISON report states:

“The emphasis on engagement of the workforce, involvement of clients, innovation and flexibility are all qualities that should be part of the day-to-day work of public service provision.  There is no reason why these virtues should not be present in all public sector provision and in the best parts of the public sector, they are.  Equally there is no reason why outsourcing and marketisation is necessary to achieve this.”

One Response to Promoting an alternative vision of public service reform

  1. pete Jackson
    Jun 23rd 2011, 10:12 am

    Nice post – would be interested in discussing a perspective form Telford in Shropshire.