Real mutuals are bringing positive change to services

Government moves to “mutualise” public services have alarmed some observers, who fear this is a cover for privatisation. Cliff Mills, principal associate at think-tank Mutuo, says this is...

Government moves to “mutualise” public services have alarmed some observers, who fear this is a cover for privatisation. Cliff Mills, principal associate at think-tank Mutuo, says this is a genuine concern – but says there are genuine mutuals who are doing valuable work  …

In his recent article, “When ‘mutualisation’ of public services is actually privatisation”, Paul Gosling rightly draws attention to a common misuse of the word “mutual” in the context of reforming public services.

It is a matter of serious concern to all of us in the sector when an organisation is described as mutual to mask the reality of privatisation.

The real worry is that when something is described as a mutual when it is not, people are seriously misled. Staff and service users who thought they would have a voice in a new organisation, which would be informed by mutual values, find instead that this is just another case of public sector values being replaced by profit maximisation.

This is a particular worry for those involved in delivering any kind of personal or care services, who know only too well the impact that privatisation is likely to have on their ability to do their job.

The misuse of language also has a sad effect on pioneering new organisations which really are mutual in form, values and approach. They become less visible, their innovation passes unnoticed and we fail to celebrate some of the radical mutual work going on within the reform of public services.

In fact, there are some very good news stories, and I want to mention three good examples of public service mutuals here.

Knowsley Youth Mutual

Knowsley Youth Mutual gives membership to young people and embraces them in its governance. It was developed by the leadership, staff and young people from Knowsley Youth service, working with Knowsley Borough Council.

They decided to spin-out the service because it was the method most likely to sustain and develop services for young people. This led to a new social enterprise, co-owned and run by staff and young people, which has greater freedom to innovate and accommodated a reduction in council funding.

The members of the new organisation form two groups, employees and young people, who elect eight representatives each to sit on a representative body. This body also has four representatives from other community organisations.

The board comprises six non-executive directors appointed by the representative body, two employees and two young people elected by the membership, and appointed executive directors.

Hard work was carried out to bring staff, young people and other stakeholders together to build their sense of ownership of the new entity. A 94% majority of staff voted for the proposal, and the majority of young people agreed with plans to establish a youth mutual. Many of them expressed their excitement at the prospect of being part of an organisation that will ‘feel like ours’.

Care Plus Group

Care Plus Group was established in 2011 as one of the first fully staff-owned public service mutuals. It is an integrated provider of health and social care, employing more than 800 staff, with a turnover of £23m.

In common with a number of other community healthcare providers, Care Plus Group wanted to continue to be bound by NHS values, but with greater flexibility and freedom to innovate. It wanted to give staff a say in running the organisation, giving them influence over its future.

To achieve this, and in particular to deliver modern, high-quality services, it felt that moving out of direct state control was the best – if far from easiest – option.

All the employees are members unless they choose not to be.  Members elect eight representatives to a council of governors. There are seven other governors, including community members and local authority representation. The governors are a link between the members/community and the board of directors. As well as appointing the chair and non-executive directors, they help to shape the mission, strategy and forward plans.

The board of directors includes a minimum of four non-executive directors – who must comprise at least 50% of the board – and executive directors.

A recent review led by Chris Ham, commissioned by Francis Maude and Norman Lamb (referred to in Paul Gosling’s article) reported that “The leaders of these mutuals [including Care Plus Group] argued that these ownership and governance arrangements had fundamentally altered their relationships with staff and other stakeholders.

“The governance system helped to ensure a continued dialogue with staff on strategic direction and to underpin more inclusive ways of working throughout the organisation. The testimony we heard suggested that it felt quite different to working within an NHS organisation, where hierarchical controls and upwards accountability were strong.”

Rochdale Boroughwide Housing

Caldershaw Rochdale Boroughwide
A volunteer helps a project by Rochdale Boroughwide Housing
to turn the town’s Calderwood Green into a wildlife habitat and leisure space for local people

This is the first social housing provider to be established as a tenant- and employee-owned mutual. This took place in the context of the transfer of Rochdale Council’s housing stock (13,700 homes) in 2012 to an organisation which became fully operational on a mutual basis in 2013.

Membership is open to all tenants – including all adults in the household – and employees, whether full or part-time. It is being promoted to secure tenant and employee participation in a vision which sees staff working in close collaboration with customers, a process which will be central to the future provision of services.

RBH is working hard to develop a culture of collaboration and partnership at all levels. At the heart of this is a representative body comprising 15 elected tenants, three representatives of local estate management organisations, eight elected employees and up to four representatives of the local council.

There is scope to appoint three representatives of other external organisations if appropriate. The key roles of the representative body are to monitor the delivery of services and hold the board of directors to account, and help to shape the future of the organisation and its services. The board of directors comprises two executive directors, and eight (soon to be reduced to six) non-executive directors.

By giving ownership to young people, tenants, and staff, these three organisations are creating radically new public service organisations which are changing the dynamics of service delivery, as has already been recognised by the Chris Ham report in the case of Care Plus Group.

Rochdale Boroughwide Housing’s new structure was regarded as robust enough to enable them to secure borrowings of £120m from lenders. And Knowsley Youth Mutual has secured the immediate future of services which are being drastically – in some cases, totally – cut by other councils. These are all remarkable achievements.

These are all pioneering organisations which were the first of their kind. Through their legal structures (community benefit societies), each of the three is committed to carrying on business for public or community benefit, reinvesting their surpluses in the business rather than distributing them to shareholders.

And through their democratic structures, these organisations all strive to pursue their objectives informed by the voices of those most involved in the services they deliver.  In effect, these are all examples of a new form of public ownership in which we no longer need the state or local government to play the owner’s role, because the people directly connected with the service, who are the best informed to know its needs, can play that role themselves.

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