MPs say government’s mutuals programme needs better “explanation and exhortation”

The All Parliamentary Group on Employee Ownership has just published the report of its short inquiry into progress with the government’s programme for spinning-out public services as employee-owned mutuals. You can download the report here.

According to the APG’S report the intention of this policy is not well understood within Whitehall, within public services, or amongst trades unions and needs “explanation, exhortation and guidance from ministers” if it is to be understood and accepted.

MPs are also concerned that any mutuals that are formed should be adequately protected with asset locks to prevent them being bought-out by private sector companies. “We don’t want to find we’re dealing with Serco in a different kind of deal,” said one contributor to the report.

The APG says its “preferred model is the professional partnership which is a form of an employee owned company; an enterprise where the majority or all, of the share capital is owned by the employees themselves.”

The government has now appointed Professor Le Grand — previously chair of a working group set up by New Labour to examine the feasibility of mutually-owned children’s social work practices — to chair the new Mutuals Taskforce which informs and advises the Cabinet Office on its policy of promoting mutual ownership models in the public sector.

Full details have still to be announced for the Mutuals Support Programme proposed by Francis Maude in November 2010. Maude described this £10m fund as “lubricating money, to soften the barriers to entry”. This cash will be available over the next three years to prospective spin outs to purchase advice. The government hopes that additional finance to support the development of new mutuals will also be available from external providers.

This would seem to confirm what I noted in this post — the emergence of a two-tier business support system for the sector, with development expertise and resources focused on the largest and wealthiest public sector spin-outs.

Third Sector Online covers the APG report here.


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