UK ill-equipped to develop co-operatives, study finds

The government's efforts to mutualise public services across the UK will not work without better funding and support, experts have warned.

Government attempts to mutualise public services across the UK will not work without better funding and support, experts have warned.

Research commissioned by Co-operatives UK and published today found the UK was ill-equipped to develop public service mutuals when compared to other European countries.

The report, Time to Get Serious, International Lessons for Developing Public Service Mutuals, showed there was not enough understanding of what was needed to set up employee-owned mutuals to run services such as social care.

“I am impressed with the government’s vision for public service mutuals, however, the UK is not yet equipped to make it happen. Understanding of the business models is limited and support is fragmented,” said Jonathan Bland, author of the report and an expert on co-operatives and social enterprises.

The coalition government has been pushing public service mutualism as part of its Big Society agenda. The Cabinet Office said it hoped the companies would be run by entrepreneurial public sector staff who want to take control of services.

But Bland said more investment was needed to implement the plans on a national scale. His review examined the development of such employment models in Spain, Italy and Sweden.

It found mutuals were flourishing in those countries because they had clearly defined legal structures, favourable taxation and national frameworks of support.

“Key findings show that where public service co-operatives are thriving, there has been long-term commitment and investment by government,” said Bland.

Cabinet Office minister Francis Maude has predicted that as many as one in six public sector employees, equivalent to one million people, could be working in newly-established mutuals by 2015.

But Ed Mayo, secretary general of Co-operatives UK, called the review “a reality check”.

He said: “The government has ambitious targets for the number of public sector workers setting up co-operatives.

“However, with the international review concluding that the UK policy context does not emerge particularly well from comparison with other countries, this must be something of a reality check.”

In February the Cabinet Office appointed Julian Le Grand, professor of social policy at the London School of Economics, as chair of its Mutuals Taskforce. His role is to find ways to expand employee-owned mutuals across public services in the UK.

But a Community Care survey published this week found many social workers believed the transfer of social care services from councils to private providers had been bad for the sector, and government plans to go further in this direction risked wreaking future damage.

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