Tomorrow’s Budget will be an opportunity to judge the government’s understanding of the gap between ambition and reality when it comes to outsourcing social work and other services to employee-led mutuals, writes Dan Gregory on ResPublica.
Gregory argues that social enterprises and other forms of mutuals are “simply not on the menu” for public sector leaders at the moment – but they could be, if policy makers understand what is really going on at the front line. Read the full blog post
Photo by Rex Features
Dan Gregory has chosen a difficult example to support his call for more employee-owned mutuals.
Owning shares in a Local Authority social work department would be a different proposition from owning shares in John Lewis.
The social work mutual is a business with only one customer, and it has no prospect of developing new consumer markets.
It is financed by its only customer, and is asset-locked.
It is a small business, serving a customer that may be over 100 times its size.
It relies on its customer for mission critical business processes.
Its revenue stream is decided in advance by its customer. And the customer has never had any great need to produce reliable budgets, because it was always able, in theory at least, to over-spend.
Its customer buys social work as a luxury good, since it can decide how many people are eligible for it.
It has a limited ability to control its production costs, and these costs can vary by a factor of ten.
It must compete every 3-5 years for the opportunity of continuing to supply.
From a capitalist perspective, this doesn’t seem like an asset that people will be queuing up for.
The individual drawbacks are presented crudely and they can all be softened to some extent, but being lumbered with commercial risk shouldn’t become the price social workers have to pay for greater decision-making powers and more time for direct work.
If Dan Gregory’s prediction comes true, I hope the social workers think twice before knocking.