Public service mutuals are the future, but should not be run by staff as worker co-operatives, according to Lord Myners.
“From a public policy perspective, the coalition has made a strong and welcome commitment to mutuality,” said Lord Myners, addressing delegates at the Is mutuality the answer to the ownerless corporation? in London. He acknowledged the government has taken steps to mutualise departments of government, “releasing them from bureaucracy”.
“So far asset transfers have been modest, but it is a new concept we have to be comfortable with,” he commented. But he said the governance of these organisations had to be monitored carefully by being more accountable to its service users. “We need to make sure they are governed properly and make sure they are not worker co-operatives.”
At the event, business secretary Vince Cable praised the mutual sector and highlighted benefits such as the “cohesion of labour force”, which is reflected in the performance of organisations such as John Lewis Partnership.
Mr Cable, who is also the MP for Twickenham, said one of the biggest disasters in corporate history was the demutualisation of building societies in the 1980/90s, but noted that the government welcomes a “diverse economy in terms of ownership” across the UK.
He added that one of the biggest public service mutuals will be the Post Office. “It’s quite a unique structure,” he said, “with 12,000 self-employed people. How do you best do it? There are only two ways, to either keep it under state ownership with a nationalised Post Office, or the alternative is to turn the Post Office network into a big mutual.
“We have already created the legal framework to do that, but for it to be successful it has be sustainable. Modernisation is already taking place and the government subsidy is decreasing. We haven’t had the confidence to do this in the past, but all elements are in place for a mutual post office.”
Read more from the conference:
How can co-operatives get governance right?
Lack of capital is the reason why the mutual sector is ‘contracting’