MPs call for 'off-the-shelf' models and guidance to boost mutuals

The Government and local government should provide ‘off-the-shelf’ models and guidance on the development of mutual or co-operative models for service delivery, MPs have said.

In a report the Communities and Local Government Committee acknowledged that no one model would fit the diversity of local circumstances in England.

However, it added that there was scope for initiatives such as off-the-shelf models, which were necessary to reduce confusion and risks that deter councils from considering this approach to public services.

The committee also suggested that procurement rules should be drafted to confer maximum flexibility in tendering for services “so that mutuals and co-operatives can compete fairly with large companies and in-house providers”.

Calling for the removal of “significant barriers” to mutualism, the committee also said:

• Co-ordination between the Government’s Mutuals Support Programme, the Department for Communities and Local Government and the Local Government Association “must be improved to gather and disseminate evidence on the operation of mutuals and co-operatives in delivering local services”;
• The Government must do more to inform and educate financial institutions about lending to mutuals and co-operatives and it must examine tax support for mutuals and co-operatives.

The report urged councils to make sure that all new organisations remained accountable, “usually through a contract”, and were transparent in their operations.

“Through commissioning and oversight processes authorities must prevent services from fragmenting and protect the operation and ownership of local public assets,” the MPs insisted.

The report suggested that the Government and local government had a choice. "If they want more mutuals and co-operatives to develop, they must take action to provide support," it said. "Without additional assistance it seems likely that the potential which is obviously there will not be developed."

A copy of the report, Mutual and cooperative approaches to delivering local services, can be viewed here.

Clive Betts MP, chair of the CLG Committee, said: "The prevailing winds may favour mutual and co-operative approaches to delivering local services, but we found far less change than might be expected across local government.

“This lack of progress was surprising given the benefits claimed for mutuals and co-operative structures which offer employees, and in many cases service users too, a say in how an organisation is run and how services are adapted to suit local needs leading to greater customer satisfaction, innovation, lower production costs, higher productivity, increased resilience and job creation.”

Betts added: “The Cabinet Office programme to promote the use of employee owned mutuals across the public sector remains isolated from work by the Department for Communities and Local Government, through its localism reforms, to stimulate opportunities for co-operatives and mutuals to take over local services.

“Failure to connect these two strands of policy activity betrays an absence of rigour, enthusiasm and understanding that is essential if the mutual model for local service delivery is ever to take off."

Last month a procurement law special report published by Local Government Lawyer in association with law firm Bevan Brittan found that 11% of the more than 100 organisations surveyed were giving active consideration to the setting up of a staff mutual. Just 2% had already set one up, while a further 2% said the process was underway.

To view a copy of the report, which analyses the procurement challenge faced by those wanting to set up mutuals, click here.