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£10 million to help threatened public services go ‘cooperative’

The government has stumped up £10 million to help public sector workers turn their departments into co-operatives, providing a possible lifeline for services worst hit by public sector cuts such as CABE

The ‘John Lewis model’, where staff run their own services as mutuals, could revolutionise the public sector, Cabinet Office minister Francis Maude claimed. The £10 million boon will help co-ops to ‘reach investment readiness’, he said.

In a speech given in the London Borough of Kensington and Chelsea, he said he wanted to ‘unleash the pent-up ideas and innovation’ people working in the public sector had developed. Kensington and Chelsea already plans to ‘mutualise’ youth services.

He said there would be a right in every Government department for staff to take over their services as long as they can give certain guarantees.

Areas such as defence and security may be exempt, Maude said, but hospitals, prisons, Sure Start children’s centres and the civil service could all qualify.

Employees at development agencies and other bodies facing a slow ‘wind down’ could see a future in taking ownership of their services.

Staff who want the mutual status will have to show their plans will deliver savings to the taxpayer but uphold or improve the quality of the service.

Maude said the idea gives power to people on the frontline and is part of the Government’s ‘Big Society approach’ to public service reform.

‘The right to provide will challenge traditional public service structures and unleash the pent-up ideas and innovation that has been stifled by bureaucracy,’ he said.

‘It will also put power at a local level so public services will be answerable to the people that use them. When staff are given a stake in shaping services productivity and efficiency has been shown to improve dramatically.

‘We must not be afraid to take bold decisions that will help create better public services at a time when there is less money to go round.’

Michael Stephenson, general secretary of the Co-operative Party, which has 28 MPs including three Labour frontbenchers, said the Government’s plan does not ensure accountability to people who use the service.

‘The new fund to promote public service mutuals is welcome but sits oddly beside the coalition’s decision to axe the fund supporting mutual buyouts of local pubs, to axe the fund supporting the creation of co-op schools, and to reverse Labour’s commitment to remutualise Northern Rock,’ he said.

‘Maude’s plan fails to ensure that public service mutuals - where they are monopoly providers - would have consumer accountability. Local libraries and swimming pools should be controlled by local people, and run in their interest, not just by the service managers.’

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