Tag Archives: Phil Copestake

Francis Maude launches new guide to setting up public sector mutuals

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Last night we launched a ‘how to guide’ for public sector organisations looking to become employee–led mutuals, written by specialists at OPM, Field Fisher Waterhouse LLP, the Employee Ownership Association and Baxi Partnership.

The guide ‘How to become an employee owned mutual – an action checklist for the public sector’ (available for free download here), provides a road map for public sector organisations. It covers the steps required for organisations considering adopting a mutual ownership model, and shows how employees can give their new enterprise the maximum chance of success.

At the launch at the House of Commons, Cabinet Office Minister Francis Maude spoke enthusiastically about supporting public sector workers to set up new enterprises and his desire to encourage a wide range of new models. Newly appointed chair of the Prime Minister’s Mutuals Taskforce Professor Julian Le Grand also welcomed the guide and stressed his commitment to helping to remove barriers facing new mutuals.

The guide has already been given a strong thumbs up by public service professionals. Speaking for OPM, colleague Phil Copestake stressed that it is designed to give practical insights to people in public services who are embarking on the transition.

Practical is the keyword here. Leaders of transitions have a demanding role and there are difficult choices along the way, but the process shouldn’t be any more complicated than it needs to be. Many of those attending the launch had either been through the journey or are on the road, and there was a lot of swapping of ideas and experience over cups of tea.

At OPM we’re really keen to continue to hear about new triumphs (and challenges faced, too) as part of our commitment to providing a up-to-date evidence base and supporting further development in policy and practice. So do please get in touch if you have insights to add to the body of knowledge.

By Hilary Thompson, OPM chief executive.

Hilary Thompson

What do you do if senior leaders are undecided about local authority mutuals?

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The first in an occasional series of posts from a member of OPM’s roving mutuals team

Presenting a new idea to your manager can be a scary proposition – especially if you don’t know your manager’s views on the subject. But to progress, you sometimes have to take the first step and make the case for change.

I’ve had the pleasure – and it really is a pleasure – of running workshops for a number of local authorities whose staff are thinking about whether mutuals are right for them. Workshop participants have included frontline staff, commissioners and service managers, and heads of service from different departments.

One question that comes up in every single case is: how can we go any further until we know what our senior managers and politicians think? (There are plenty of other questions, but I’ll leave those for future posts.)

It’s not surprising that council leaders usually haven’t made up their mind about mutuals, because as a reform programme it’s still in its infancy, and there are serious questions about the impact on staff, services and outcomes that can’t be avoided and take time to consider. But is nothing possible until decisions have been made?

Three scenarios

When it comes to senior backing I think there are basically three scenarios.

First, is where leaders are driving the agenda themselves. The most high-profile example of this is Lambeth’s Co-operative Council, which has been consistently and visibly championed from the outset by the leader of the council Steve Reed, the chief executive and the senior management team. Many of the Cabinet Office’s ‘mutual pathfinders’ have had strong leadership backing too.

Second, there are authorities where there is deep-rooted scepticism about the idea of mutuals among leaders, possibly born out of fear that shared ownership is no more than privatisation by the backdoor.

Third, are councils where leaders are neither actively hostile towards mutuals, but nor are they giving much support (yet) to developing them. This is usually because they’re still making up their minds, or aren’t quite sure about the implications of mutuals. This is where the majority of authorities seem to be at the moment.

To the staff member or manager who’s fired up by the idea of developing a mutual, the third scenario can be just as frustrating as the second. It can seem like there’s a bit of a vacuum and where ploughing time and effort into something goes nowhere.

We know from OPM’s research and practical experience that backing from senior people is vital to build a successful mutual. But the ‘Right to Provide’ announced by Francis Maude in November – while not on the statute books yet – makes it more likely that if frontline staff think they could deliver their service better as a mutual, their voices will be heard. More important than where a proposition comes from is how compelling it is.

No matter which situation you find yourself in, a number of key ingredients are crucial for developing a strong mutual proposition. You’ll need a thorough options appraisal to test whether a mutual is right for you and, if so, which kind. You’ll have to make sure that your mutual will be a viable business. And you’ll have to raise awareness among all staff and others who might be affected, and bring them on the journey with you.

Success can be as much about ‘making the case to’ as ‘waiting for a steer from’.

By Phil Copestake, OPM principal

Phil Copestake

New ownership models in public services – speech to Lambeth: The Co-operative Council

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The following is a transcript of a speech on new models of ownership in public services given in Lambeth, London on 15 September 2010 by Phil Copestake, OPM’s Head of Analytical Studies. Phil spoke to Lambeth’s Citizens’ Commission, councillors and policy team.

I’d like to thank the team at Lambeth Council for giving OPM the opportunity to contribute to the Commission – I know we’re not alone in being seriously impressed with the depth and scale of your ambition in developing the Co-operative Council.

OPM works with public services at all levels and in all sectors to help improve social outcomes. We do that through research, engagement, evaluation, and organisational and leadership development.

I’m going to outline some of the key findings from research we’ve recently completed into the potential of employee and community ownership models for public services. I’ll also propose questions that arise from these findings.

OPM is itself 100 per cent employee owned, and based on that and our wider research and experience, we think alternative models of ownership can have amazing advantages for public services including higher levels of productivity, greater resilience during difficult times, better levels of engagement and reciprocity between staff and service users, and so on.

But crucially – and this is perhaps the most important finding from our research – you risk significantly diluting those benefits if you aren’t ruthlessly clear about your purpose and motivations for adopting employee, user or community ownership for one or more of your services and then being objective in choosing the model that’s fit for purpose. While they have wide potential, alternative models of ownership are much better suited to some services than to others.

I’m aware that in your White Paper you are keen to develop principles of co-operation as much as actual ‘co-operative’ models of ownership, but I do think that in Lambeth as elsewhere, it’s worth seriously considering moving some of the services that are currently provided by statutory services to employee, user or community ownership; I’m going to talk about some of the factors that we found to be helpful in guiding that process.

The terminology surrounding different models of ownership is horrendously confusing. You hear people talk about mutuals, co-operatives, social enterprises, co-owned and employee-owned organisations – frequently interchangeably.

In our report – New models of public service ownership – A guide to commissioning, policy and practice – we do have a detailed taxonomy, but when it comes down to it we think that public organisations looking to transition services to a different ownership structure have four options; the right option will depend on your motivation for change:

  • If your primary motivation for transferring ownership is to reap the benefits of increased productivity and cost effectiveness, then evidence suggests this is most effectively delivered through an employee-owned organisation – one in which at least 50 per cent of the value of the service is controlled by employees
  • Where the main motivation is to create or preserve a sense of ownership and responsibility within a distinct and recognisable community it is often best to set up a community trust where the social purpose is strongly locked in and where the governance model means that trustees are accountable to local people
  • Where a sense of ownership is needed for the specific reason of raising financial contributions from service users because without those the service cannot continue to operate, a subscription-based traditional mutual may be best
  • Finally, if the desire is to have greater engagement and reciprocity between staff and users or citizens – because you think that will lead to innovation, higher satisfaction and better outcomes – then go for a multi-stakeholder ownership model

But how to decide which of the many public services are best suited to this change? It seems that alternative models of ownership work best when you:

  • Have a clear community or constituency of users with a strong shared interest or common identity
  • Have the ability to build long-term relationships with owners (so it’s more difficult where there’s much higher turnover of the people who would be the likely owners)
  • Don’t have a pressure to grow the size of the new organisation very quickly – any growth needs to be steady, to allow ownership and owners to adapt

Once you’ve decided which service areas are best suited, evidence suggests that for a smooth transition and longer-term success, you need to:

  • Go on making the case to staff, users, the wider community and other key stakeholders
  • Ensure that local commissioners have good levels of awareness and give the new organisation space and time to get on its feet
  • Support the new organisation in securing access to finance
  • Build the business and entrepreneurial skills of the new owners
  • Put in place a governance model that accurately reflects the balance of interests in the organisation

I’ll close by saying that OPM is going to be conducting further research with a number of organisations to try and divine the secrets of success, and we’ve also been appointed by the Cabinet Office as one of the mentors for the government’s ‘mutual pathfinders’ so we’ll be learning from that process too. It goes without saying that we’re really keen to share what we learn with Lambeth and with the Commission. Thank you.

Phil Copestake



What does the Big Society mean for mutual forms of ownership?

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Mutual forms of ownership are directly relevant to many of the ideals of the Big Society agenda.

At their best co-operatives and mutuals can represent some of the most successful practical examples of local participation, joint local responsibility and community working.

Shifting public services to mutual forms of ownership is seen as a way to foster the innovation that’s needed to enable public services to deliver targeted, personalised services in a context of budget cuts.

Supporting new models

OPM is currently in the midst of exciting research and capacity building to help public services make the most of employee owned models.

Although traditionally associated with Labour ideals, cooperative and other employee owned models of public services featured in the manifestos of all the major political parties. As a result, the Coalition’s programme for government includes the commitment to:

‘Support the creation and expansion of mutuals, co-operatives, charities and social enterprises, and enable these groups to have much greater involvement in the running of public services.’

Lambeth taking the lead

There is a sense that now is the time to explore new structures of ownership and governance. An example of a public organisation willing to take the plunge on a potentially grand scale is Lambeth Council, which is developing the UK’s first co-operative council. Lambeth has created a Citizens’ Commission to gather views from other councils, community organisations, academics and think tanks to establish how far the principles of co-operation and co-production can be translated into co-ownership of local authority services.

Report on new ownership models

OPM – a fully employee owned organisation itself – has recently published the latest in its series of Public Interest Research reports: New models of public service ownership – A guide to commissioning, policy and practice.

The report focuses on the practical steps that public services will need to consider to realise the potential of shared ownership models. The report details which of the many different models of ownership might be best suited to various settings and services. It outlines some of the issues for policy makers, commissioners and providers to consider in transitioning to employee ownership. It also makes an attempt to cut through some of the confusing terminology and concepts used to refer to shared ownership models to make the choices much clearer.

Choosing the right model

Employee or user owned models are not the answer to every challenge facing public services. Our research suggests that from a Big Society point of view, shared ownership models work best where there’s a clear community of interest (i.e. a group of service users with similar needs), and struggle when there’s high staff and/or user turnover, which precludes building the longer-term relationships that are needed for co-ownership to work most effectively.

One of the biggest challenges in moving to a shared ownership model is in implementing the new governance structures that will reflect the purpose of the organisation. If your principal purpose is to increase productivity, then you’ll be looking at a different arrangement than if you want to build a stronger reciprocal relationship between service users and staff.

Further learning

At OPM we have a fantastic opportunity to learn from the experiences of some of the employee owned pioneers, both from the second stage of our own research, which will involve in-depth case studies of organisations that have transitioned to a new ownership model, and from being one of the Cabinet Office’s approved mentors for its public service mutual pathfinders. All of the findings will be shared on this blog and through a series of publications, so watch this space.

Read the report: New models of public service ownership – A guide to commissioning, policy and practice

If you would like to discuss mutual forms of ownership contact Phil Copestake on pcopestake@opm.co.uk or 020 7239 0879.

By Phil Copestake, OPM principal, and Jo Sloman, OPM senior researcher

Phil CopestakeJo Sloman