By Phil Copestake, OPM principal.
The Deputy Prime Minister’s speech yesterday highlighted a paradox at the heart of the employee ownership business model. You can’t have a mutual without actual shared ownership, and yet owning shares does not in and of itself guarantee the benefits of being a mutual. As Mr Clegg said: sharing ownership means sharing power. But to really maximise the potential of mutual models the staff who own the business need guaranteed influence too. Continue reading
By Hilary Thompson, OPM chief executive.
Over the spring and summer there was less media interest in public service mutuals and perhaps less actual new interest on the ground. But as England enjoys an Indian summer, we’re expecting interest to increase again.
At national level, there have been many questions about whether we yet have the right climate for public service mutuals in this country (as illustrated by Co-operatives UK’s report on international comparisons). Continue reading
A guest post by Carole Leslie of the Employee Ownership Association (EOA)
Today sees the publication of an inquiry by the All Party Parliamentary Group on Employee Ownership, which examines employee ownership in the public sector. Effectively, this is the first progress report of how the Government’s mutualisation programme is working.
There are mixed views on the policy; there is some criticism that it is no more than a front for cuts and job losses, yet there has been tremendous enthusiasm in many public service departments to explore the options.
Of course, there are several organisations that had already ‘spun out’ of the public sector and the spectacular successes of enterprises like Greenwich Leisure, Central Surrey Health and City Healthcare Partnership present a strong argument that employee ownership is a good model for public sector delivery.
Many recognise the benefits; there may be differences in opinion regarding detail, but employee ownership is the one topic that unites all major parties in vocal support. So with this weight of support behind it, how is it all working?
Well, the findings were mixed. Most strikingly, there is a real lack of understanding within local and central government as to what ‘mutuals’ are and how the model could work. The inquiry found that employees and organisations didn’t know how to access support and advice and sometimes found that attempts to explore ‘spinning out’ were thwarted by senior management.
There was also concern expressed by union officials that they had been bypassed in the formulation of policy, and were not involved enough in the process. Indeed, when unions had been consulted and included from the outset, the journey to becoming an employee-led mutual was much smoother.
The political environment surrounding the policy was expressed as a major concern. How will employee-led mutuals sit with Government plans to bring more private sector providers (who can often achieve significant economies of scale) into the public sector?
Technical issues were raised. For instance, organisations may find themselves liable for VAT for the first time, which can be significant, especially when seeking cost savings. There was confusion over how commissioning will work and whether smaller organisations will lose out to better resourced larger organisations with professional bid teams. It seems initial concerns over individual terms and conditions appear to be getting addressed, which was a major obstacle in the early days.
For our sector, the most encouraging finding in the report is that once organisations are owned by their employees, the results are transformational. Immediate improvements are found in absence, wastage, productivity and employee engagement. All stakeholders reap the benefits: employees, service users, commissioning authorities and communities.
In summary, employee ownership is achieving outstanding results in public service delivery. But there is a danger the policy will fall due to lack of knowledge and support. The Government has to find ways to help organisations explore new ownership models, and offer affordable advice and guidance to help them achieve the appropriate model. There is an exceptional opportunity here to change how our public sector operates, let’s not lose that opportunity by losing momentum now.
By Carole Leslie, policy director, Employee Ownership Association (EOA)
