Comment Comment
Comment on the blogs Log in here Become a member Register now
 
Tim Smedley

Tim Smedley

23 Aug 2010 | 09:48

(Maximum of 120 characters)
Articles more than one month old can be viewed only by CIPD members or PM Subscribers.


At last the government has given some detail on its idea for public-sector co-operatives.

Back in July, Francis Maude, minister for the Cabinet Office, made a plea for “answers on a postcard please!” to how mutuals in the public sector might work. Clearly, he received a bulging mailbag. The other week he announced 12 “pathfinder” pilot schemes: “trailblazing” public-sector providers who have decided to give mutual ownership a go. While the exact structure of each is unclear (they are, after all, experimental), they are united in the aspiration to be part employee-owned and/or employee-run.

The UK has traditionally been shy of such models. Their reputation took a bashing in the 1970s when Tony Benn recommended that workers in failing businesses formed co-operatives. Many of these came to messy ends – most notably Meriden, the erstwhile owners of the Triumph motorcycle brand, which spluttered to a halt as a co-op in only a few short years.

Yet that was then. We don’t have to look far for successful, long-lasting mutuals. We have our own John Lewis, of course. And Spain’s seventh largest business, The Mondragon Corporation, is a co-operative wholly owned by its circa 85,000 employees. It is actually one large co-op made up of around 150 smaller co-ops. Within the corporation, workers vote on key business decisions and an elected board is directly answerable to a workers’ committee. Research has found five times as many Mondragon workers feel involved in major decisions compared with equivalent private companies, and are much more engaged as a result.

Adapting such models to the UK’s public sector is, however, arguably very different. While a centralised bureaucratic system is an unruly beast, it is one beast. Would many separate and necessarily single-minded organisations create a whole jungle? We may have had social enterprises working on the periphery of the public sector for a while now, but they can be run with the same hierarchical ruthlessness as any private-sector company. Co-operatives and mutuals, with all the democracy and employee empowerment they entail, cannot. Would this slow the public sector down, or speed it up?

I’ve been working on a feature article looking at how established employee-owned mutuals and co-operatives throughout the UK run their businesses, and manage their HR – I’ll report back on that at a later date. But it has left me with many questions. Top of which is this: if this initial trickle of 12 public service bodies reforming as mutuals turns into a torrent, could it change public service provision as we know it?

Comments

1. At 13:04 on 23 Aug 2010, Ian wrote:

Public Sector mutuals already exist in the shape of NHS Foundation Trusts which are, legally, public benefit organisations. They are owned by their members who include staff, but also, members of the public . The members elect Governors (both staff and public) who have the power to appoint, and if necessary, remove the Chair and other Non-Executive Directors. Stakeholder organisations also appoint Governors.

That model has existed for about 6 years now and has demonstrated, albeit with some exceptions, that the concept of local accountability in the delivery of public services can work extremely well.

A public sector cooperative which is owned solely by its employees is clearly somewhat different, but the issue of accountability, especially as public funds will be involved is obviously one which needs to be addressed, just as it has been addressed through the NHS Foundation Trust model.
Report this post

 
 

About the editors

Claire Churchard

Claire Churchard

News and features writer on People Management

Claire Warren

Claire Warren

The deputy editor at People Management, looking after the features section

James Brockett

James Brockett

News editor at People Management

Jill Evans

Jill Evans

Legal editor on People Management

Rob MacLachlan

Rob MacLachlan

Editor of People Management

Tim Smedley

Tim Smedley

Features writer on People Management.

Apprenticeships that work

New guidance to help you in developing high-quality apprenticeships

Read the new CIPD guide

HRD Conference 2012

Add value to your business with practical L&D solutions from HRD

25-26 April. Find out more
Links open in new window
 
People Management neither recommends, nor is responsible for, the content of external sites listed here.
Your link here: contact the PM sales team.

Language does not simply reflect what is going on in organisational life: it also influences what people think and what they do

Linda Holbeche, director of the Holbeche Partnership and visiting professor of HRM/OD at Cass Business School