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Public Sector Mutuals

Oral Answers to Questions — Cabinet Office – in the House of Commons at 11:30 am on 24th November 2010.

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Photo of James Morris James Morris Conservative, Halesowen and Rowley Regis 11:30 am, 24th November 2010

What progress he has made on the establishment of public sector mutuals.

Photo of Alun Cairns Alun Cairns Conservative, Vale of Glamorgan

What progress he has made on establishing public sector mutuals.

Photo of Francis Maude Francis Maude The Paymaster General and Minister for the Cabinet Office

I announced last week that every Department will put in place "rights to provide" for public sector workers to take over the running of their services. The first wave of 12 pathfinder projects was launched in August this year. Leading organisations in the sector, including Local Partnerships, the Employee Ownership Association and Co-operatives UK, have come together to launch an information and support service for public sector workers interested in mutualisation. I hope that Members on both sides of the House will encourage and support these worker co-operatives.

Photo of James Morris James Morris Conservative, Halesowen and Rowley Regis

Many public sector organisations and employees in my constituency are interested in this idea. Will my right hon. Friend clarify whether he sees these policies applying more to local community organisations, or whether he envisages organisations on the scale of, say, NHS trusts being able to take on mutual status?

Photo of Francis Maude Francis Maude The Paymaster General and Minister for the Cabinet Office

I do not think that we should be prescriptive about how large or small, or how local or broad, these co-operatives could be. The pathfinders range enormously in size: I think that the smallest has only three potential employees or members, while the largest has 1,100, and it is possible to imagine them being even larger. I hope that groups of public sector workers from right across the sector will consider whether this could be a good route forward for them to take, and we will make it as easy as possible for them to take it.

Photo of Alun Cairns Alun Cairns Conservative, Vale of Glamorgan

What action is the Minister taking to protect the interests of innovative public sector workers who come up with exciting ideas for public sector mutuals, but whose senior management do not support them because it might not be in their personal interest to do so?

Photo of Francis Maude Francis Maude The Paymaster General and Minister for the Cabinet Office

It is possible that such a situation could come about, which is why we have encouraged the organisations that I mentioned to set up the information and support service for groups of public sector workers. We will also establish a challenge group, into which this service can feed thoughts and suggestions. If there are concerns that middle and senior managers are obstructing the right of public sector workers to form these co-operatives, I hope that people will feed them directly to us, through the challenge group, so that we can take the appropriate steps.

Photo of Cathy Jamieson Cathy Jamieson Labour, Kilmarnock and Loudoun

Does the Minister accept that there is a fundamental difference between a worker co-operative and an organisation that is fully mutual? Can he assure me that there will be a democratic process within public sector mutuals and that there will be a membership element to it?

Photo of Francis Maude Francis Maude The Paymaster General and Minister for the Cabinet Office

We do not have a dogmatic view about exactly what form these should take. I hope there will be considerable innovation. Some will want to form joint ventures with outside providers; in other entities, the Government or whatever other state agency is the commissioning body might want to retain a stake in the organisation. There will be strong democratic worker involvement in many of them, but the key element is a degree of ownership by the employees themselves.

Photo of Lindsay Roy Lindsay Roy Labour, Glenrothes

May I probe the Minister further on what specific advice and support the Government are offering to organisations that wish to become mutuals or co-operatives?

Photo of Francis Maude Francis Maude The Paymaster General and Minister for the Cabinet Office

A range of advice is available. The 12 pathfinder projects are supported by organisations that are able to provide support-for example, Co-operatives UK and the John Lewis Partnership, which have enormous experience in this area. The advice and support service that these organisations are putting together will be able directly to channel support and advice from organisations such as the Employee Ownership Association. That should help organisations to find the right advice for the particular circumstances of a particular group of workers.