Both the Conservatives and Labour have suggested that they will introduce mutual models for delivering public services if they win the general election. Mark Johnson assesses the options.
David Cameron held out the prospect of "unleash[ing] a new culture of public sector enterprise", when he announced Conservative Party plans to give public sector workers the right to form co-operatives to run public services. Staff of services, such as primary school teachers and nurses, would decide how they were run – operating to minimum national standards.
Labour politicians were quick to accuse the Tories of stealing their clothes; earlier this year they said they were looking at ways to transpose the John Lewis partnership model to public services. The Co-op and John Lewis are lauded as good examples of how worker engagement can boost profits, slow staff turnover and build customer loyalty. This skirmish is the latest in the key battleground of public service reform in the run-up to the election.
Under Tory plans, we are told, employee-owned co-operatives would be able to decide on management structures, innovate to cut costs and improve the standard of service, and share any financial surpluses among the staff. “I know that there are millions of public sector workers, that work in our public services and who frankly today feel demoralised, disrespected, feel a lack of recognition,” said Cameron. “We will not only get rid of those targets and that bureaucracy that drives you so mad, we will give you the power in a way that is as radical as the right to buy your council home."
Emerging new models
It is clear that the twin objectives of reducing the public sector deficit and reconnecting with citizens increasingly disillusioned by current power structures are going to spawn some interesting new service models. Already, one of our clients Lambeth Council has announced plans to become a "co-operative" Council – where residents who help run services would get council tax rebates.
Lambeth hopes the scheme, based on the John Lewis Partnership business model, will save it about £30m. Under the proposals, residents could vote to turn services, such as primary schools and housing estates over to citizen-led groups. Lambeth residents would also be allowed to set up small-scale mutuals to use their personalised budgets for social care services.
Steve Reed, Lambeth Council Leader, said: “We are proposing an alternative [to Barnet’s EasyCouncil] where we can give people the tools to do the job or mutualising where we can set up something and then hand it over to the people who will use it, to run it."
However, skeptics fear the plans are really motivated by a desire to cut costs and shift difficult decisions about rationing resources down to community level. Ray Jones, professor of social work at Kingston University, said the co-operative model could provide social workers with a positive space to work autonomously. But he added: "It's sad to see a potentially good idea put at risk at a time when money is going to be reduced. This could be a way of passing on the responsibility for money when budgets are being cut.”
How would it work?
Mutual models could take a variety of legal forms. They could be true co-operatives, established as companies limited by guarantee or industrial and provident societies, where the members derive benefit from the economic success of the venture. Alternatively, they could be wholly non-profit distributing vehicles established in the public interest, such as community interest companies or even charitable companies.
It is understood that civil servants are very attracted to models where citizens would become “co-producers” of services, to reduce costs and improve outcomes. This model eschews the patrician trustee board, in favour of turning beneficiaries into co-producers. For example, a sufferer of a long-term health condition would be encouraged to partner with a community nurse and a group of peers to manage their symptoms, possibly using remote monitoring technology; similarly, harnessing parent power in new school models is said to be a way to raising attainment.
For me there are some real questions about the appetite for service users to become co-producers in this way. How do you equip often vulnerable service users to run their own show? How would you guarantee quality of provision? Do citizens not have the right to expect that public authorities will employ experts to deliver or commission these services rather than hand them an instruction manual on how to do it themselves?
Growing interest in social enterprise
My firm has seen a steady increase in enquiries from public sector managers about the options for setting up not for profits and social enterprises over the past 12 months. Much of the work we have undertaken has been in health and social care, where the right to request introduced by Lord Darzi last year has provided a clear basis for spinning out community services. There is also growing interest now from local government services as well, such as education support services, leisure, cultural services and libraries.
The attraction for many of these managers is that they can have more control over their own destiny and shape the direction of their services. Often these may be seen as “non-core” to the public sector host and by gaining a degree of independence, access to new funding streams and selling their services into a wider market, they are able to achieve a more sustainable future.
However, no one should underestimate the hard slog the innovators endure to launch the new model. It really is a rollercoaster for some – navigating the bureaucracy to gain approval to spin out – when senior managers have a vested interest in keeping the service in-house; persuading the staff to make the jump – in the face of union opposition on pension rights, which is often spun unfavourably. It requires nerves of steel and a strong determination to succeed. These pioneers are a rare breed indeed.
Mark Johnson is the managing director of specialist public services law firm TPP Law. The firm is running a free seminar on ‘Using Social Enterprise for Public Service Delivery’ in April. For more info visit tpplaw.co.uk/training.
Add comment
The use of pseudonyms is permitted. Supplying an email address is optional and will not be published or used for any purpose other than notifying you of new comments on this article (if requested below). All comments will be moderated before publication. We reserve the right not to publish comments that are offensive, defamatory or irrelevant to the topic.
The Government Procurement Service’s proposed legal services framework agreement must surely be the largest of its kind, at an estimated contract value of £200-250m over four years.
National Policy Statements (NPSs) are the cornerstone of the Planning Act regime: they set out the need for nationally significant infrastructure projects (NSIPs), the impacts that promoters should address when preparing applications, and…
Greenpeace launched a judicial review of the Nuclear Power National Policy Statement (NPS), the only challenge made to any of the six energy NPSs after they were designated (brought into force) on 19…
Latest Stories
'City deals' to be extended to smaller cities 25/01/12: More cities in England will be offered the chance to agree a bespoke deal with Government to unlock their potential to drive economic growth, the Cities Minister Greg Clark has announced.
Enable electors to vote beyond 10pm: Lords Committee 25/01/12: The House of Lords Constitution Committee has urged the government to make changes to electoral law before the next general election to prevent the disenfranchisement of voters still queueing when polling stations close at 10pm.
Nottinghamshire plots return to "most democratic" committee system 23/01/11: Nottinghamshire CC is to consider plans to scrap its leader and cabinet model of governance and return to a committee system. The move comes just days after the relevant provisions in the Localism Act 2011 came into force last week.
Blow for councils over recruitment of 'independent persons' required by Localism Act 19/01/12: The ability of councils to find 'independent persons' for the new standards regime under the Localism Act has been dealt a blow, after a QC said former independent members of standards committees under the current regime cannot take up the post.
Ministers confirm plans to give bespoke powers to elected city mayors 17/01/12: Ministers are to press ahead with plans to give elected city mayors their own bespoke powers, it has been confirmed. The move was contained in the government’s response to the What can a mayor do for your city? consultation.
NHS trust faces record ICO monetary penalty after hard drives sold on eBay 11/01/12: Brighton and Sussex University Hospitals looks set to become the first NHS trust to be hit with a monetary penalty for breaching data protection laws, after it revealed that the ICO was proposing a £375,000 fine.
Watch the deputy information commissioner Graham Smith outline the future for Freedom of Information and Data Protection law to delegates at the North West Legal Consortium.Need CPD? This courseis free on www.localgovernmentlaw.tv and provides one hour's CPD credit.
Reporting for duty How can local authorities and other bodies meet the requirements of the public sector equality duty? Sam Madge-Wyld looks at the lessons to be learned from the key cases.
Meeting expectations The first ever judicial review challenge by one NHS body of a decision by another offers useful guidance on the applicability of the legitimate expectation principle to public consultation, writes Ellen Wiles.
RIP(A) it up and start again The Protection of Freedoms Bill, which curtails councils’ powers to conduct surveillance under RIPA, is making its way through Parliament. But, asks Ibrahim Hasan, has the government picked a soft target?
Better to be late than never? At what stage can public authorities rely on exemptions under FOIA or the EIRs? Rachel Kamm examines the issue of late reliance.
No longer the Cinderella of rights A recent Tribunal decision will be of considerable interest and encouragement to bodies whose task is to scrutinise public decision making, writes Rosalind English.
ICO sets out stall for compulsory audits in local government and NHS There are significant and widespread data protection compliance concerns in local government and the NHS and these justify using compulsory audit powers, the ICO has said in a business case submitted to ministers.
It's only a name... How should public authorities respond to freedom of information requests made under a fictitious name or pseudonym? Ibrahim Hasan assesses the options.
A secure future Is securitisation as a means of raising finance now a possibility for local government? Alan Aisbett analyses the legal background and recent announcements by ministers.
LCJ warns judges not to administer responsiblities of councils and others Judges must remember that they cannot administer the responsibilities that others – such as local authorities – have, the Lord Chief Justice has warned. Lord Justice Judge said judges should stay within their proper function.
Deputy PM hails "genuine transfer of power" to cities England’s eight largest cities could be handed a range of new powers under so-called bespoke “City Deals”, the Deputy Prime Minister has said. The process could also be rolled out to other cities in due course.
ICO hits Welsh council with record fine for data breaches The Information Commissioner’s Office has handed a Welsh council its highest monetary penalty to date for breaching the Data Protection Act. Powys County Council will have to pay £130,000.
Behind the mask A council recently sought disclosure from Twitter of the true identity of the person behind 'tweets' claimed to be defamatory to its employees. Tom Collins and Graeme Creer examine the case.
The Autumn Statement: the key measures by practice area The Chancellor of the Exchequer's Autumn Statement is set to have a significant impact across a range of practice areas. Local Government Lawyersummarises the key measures by practice area.
Top lawyer attacks code of conduct provisions in Localism Act A top local government lawyer has criticised ministers for introducing the new standards regime for councils "on the hoof" and without proper consideration. Peter Keith-Lucas said it created as many difficulties as it resolved.
Housing, planning and cultural services bear brunt of cutbacks: AC Almost half of the savings made by single tier and county councils have come from planning, housing and cultural services, the Audit Commission has revealed. Four in 10 councils are to change adult care eligibility criteria.
On best behaviour Ministers have issued statutory guidance on Best Value. Melanie Carter explains why it strengthens the hand of those organisations looking to bring judicial review proceedings over funding cuts.
Government appoints peer to lead review of charities law The government has appointed the President of the National Council for Voluntary Organisations to lead a review of charities law in England and Wales. The review marks five years after the passing of the Charities Act 2006.
Council "cannot use own irrationality" to avoid paying staff enhanced notice A council could not rely on its own alleged irrationality to avoid paying enhanced contractual notice to its employees, a Tribunal has ruled. It also held that the actions were a violation of the employees’ ECHR right to property.
Fundamental overhaul needed to "badly out of date" RIPA, says JUSTICE The government’s proposed amendments to the Regulation of Investigatory Proceedings Act 2000 are “nowhere near enough to bring Britain’s surveillance laws in line with human rights standards”, JUSTICE has claimed.
Ministers call for proposals on powers of directly-elected mayors The government has launched a consultation asking residents of 12 English cities on the powers that would be appropriate for directly-elected mayors to hold. Their views are also sought on the right level of scrutiny.
Liberty hails Westminster change of heart on soup run byelaw Campaign group Liberty has hailed Westminster City Council’s decision to drop plans for a byelaw banning charitable soup runs around Westminster Cathedral Piazza as “a victory for common sense”.
MoJ extends freedom of information regime to more bodies The Ministry of Justice has formally extended the Freedom of Information Act 2000 to cover three more organisations on the basis that they perform functions of a public nature.
Naked photos and nuclear enrichment The First-tier Tribunal has issued a slew of new decisions, covering issues such as information obtained in confidence, and legal professional privilege. Robin Hopkins reviews the rulings.
Pickles unveils 'whole place' and neighbourhood level Community Budgets Communities Secretary Eric Pickles has unveiled plans to pilot two “localist” approaches to integrating services. One pilot will be at the neighbourhood level, while the other will be of a 'whole place' approach.
Healthcare sector must do more to protect patient data, says ICO The health sector must do more to protect patient data and ensure workers implement key safeguards, a senior ICO official will warn today. The comments came as two more NHS trusts breached data protection laws.
Ministers "minded" to make transparency code legally binding The government has published the final Code of Recommended Practice for council transparency, with ministers saying they were “minded” to make it legally binding despite the misgivings of the Local Government Group.
To have and to hold The question of when a public authority holds information for the purposes of the Freedom of Information Act is a complex one. Ibrahim Hasan reviews recent developments.
One-in, One-out rule on new regulation is working, ministers insist The One-in, One-out rule – under which no new regulation can be brought in without other regulation being cut by a greater amount – has reduced the net cost to business and civil society organisations, ministers have claimed.
Hide and seek The use of private email by the Education Secretary and his advisers raises some important questions. Jonathan Baines looks at the background to the case.
LGA hails government climbdown over proposals to pass on EU fines The government has climbed down over proposals in the Localism Bill to give ministers sole power to force councils to pay fines levied by the European Union against the UK for missing targets on issues such as air quality.
Keys to consulting Proper consultation is essential if local authorities are to avoid legal challenges to their restructuring of services, writes Peter Keith-Lucas, who reviews recent developments in this area.
EIR Confidential The Information Commissioner recently endorsed the Environment Agency's decision to keep information about the financial provision for a landfill site confidential under the EIRs. Stephen Shergold and Sam Boileau analyse the case.
Privacy matters Alison Deighton reviews the monetary penalties that the Information Commissioner has levied so far on public authorities for data breaches, and explains how they can be avoided.
Make custodial sentences available to courts for blagging offences: ICO In an appearance before MPs on the Justice Select Committee today, the Information Commissioner is to call for custodial sentences to be made available to the courts to stop the unlawful use of personal information.
Tribunal orders council to disclose list of empty homes after FOI request The First-tier Tribunal has ordered Camden Council to publish a list of empty properties in the borough after a freedom of information request by an advisor to squatters. The Housing Minister called the ruling "bizarre".
The Government Procurement Service’s proposed legal services framework agreement must surely be the largest of its kind, at an 
National Policy Statements (NPSs) are the cornerstone of the Planning Act regime: they set out the need for nationally significant infrastructure projects (NSIPs), the impacts that promoters should address when preparing applications, and…
Latest Blog Posts
All comments will be moderated before publication. We reserve the right not to publish comments that are offensive, defamatory or irrelevant to the topic.