Privatise or mutualise?

In February David Cameron pledged that the state monopoly on the delivery of public services would be broken once and for all. The scheduled White Paper, Open Public Services, however, has been delayed amid speculation that ministers are toning down its commitments to private sector outsourcing in favour of the establishment of new mutuals, and that this will be politically more acceptable than privatisation (PublicNet covers that here).

Suffolk County Council, as if in confirmation of the government’s fears regarding public hostility to privatisation, has meanwhile announced that there will be a ‘period of reflection’ (have I heard that somewhere else recently?) and a likely U-turn on its plans to become the first ‘virtual council’, with all services outsourced. Reported here in the Guardian, Mark Bee, Suffolk’s new Conservative group leader is quoted as saying, “It’s not going to be about ‘no more cuts’ and keeping things as they are; things have got to change, but it is finding the right kind of change rather than just steaming into it.”

Elsewhere, as Third Sector online recently reported, Jonathan Bland — yes, the former chief exec of SEC — has written a report for Co-operativesUK which examines mutuals in public service delivery in Spain, Italy and Sweden.

In Italy, for example, over 7,000 co-operatives provider health, social welfare and employment services. Bland argues that the success of mutualisation in some European countries is down to policies that actively favour the formation and growth of mutuals — including the provision of specialist business support, and mutual structures being readily recognised by commissioners and procurement agencies — and that policy in the UK lags dramatically behind this.

The report, Time to get serious: International lessons for developing public service mutuals can be downloaded from the Co-operativesUK website here.

Now, that issue of access to specialist business support is absolutely critical. The skills are out there — but is the money there to pay for them now that the RDAs are being wound-up and the Business Link network dismantled? Paid-for models of support will almost certainly be appropriate for these new large-scale mutuals but we must also be mindful of the fact that the social enterprise movement doesn’t exist solely to assist the formation of potentially wealthy public service externalisations; it exists to create social and economic opportunities in the most disadvantaged communities too. It is this which to a large degree makes the social enterprise movement ‘social’.

The movement should not be dominated by large-scale mutuals spun-out of the private sector and nor should its development expertise be devoted entirely to this one particular business model simply because they are most likely to be able to pay for the support they need. The key priority we should be trying to address at the moment is that of unlocking adequate resources to enable us to assist both the richest and the poorest enterprises in the sector.


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