Transforming Public Services: Public service mutuals as alternative delivery vehicles for health & social care

There have been a number of developments in approaches to public service delivery in the UK, partly as a response to austerity measures as well as a shift to new models of public, private and third sector provision. This... [ view full abstract ]

There have been a number of developments in approaches to public service delivery in the UK, partly as a response to austerity measures as well as a shift to new models of public, private and third sector provision. This article considers the development of public service mutuals (PSMs) – those organisations that have spun out of the public sector, and where employees of the new providers play a key role in shaping and delivering public services at local and national levels. This includes both the establishment of mutual organizations to deliver services and the application of mutual values and principles to the governance and management of new and existing non-mutual organizations.
While much of this transformation is due to top-down push from both New Labour and Coalition governments, there has been increased experimentation in mutual forms and some indication that PSMs may have the scope to span both private and public benefit. Furthermore, employee ownership and increased employee participation may, from initial anecdotal evidence, support high performance and high levels of employee engagement and organisational commitment. Some have seen this shift as diluting traditional public sector provision, yet it may also be seen as circumventing a general weakening of public sector values by the pursuit of more aggressive forms of privatisation. This transitional environment requires further scrutiny and this paper proposes avenues for evaluation of current service provision in the light of requirements to evidence social value and impact. Moreover, it points to the need for a re-evaluation of public service motivation (public service ethos) in the light of the development of values-led, co-operative and employee-owned/managed enterprises.
The paper starts with a review of legislation and regulatory frameworks that have supported the transfer of services out of the public sector and the development of employee mutuals in health and social care. This is followed by a focus on over 100 PSMs listed by the UK Cabinet Office that have received or are in process of receiving support from the Cabinet Office Mutual Support Programme. The paper points to some initial characteristics and trends across new PSMs while identifying some key differences between early spin-outs from public sector and current incarnations of PSM. Critical differences may point to a greater inclination to culture and values akin to public service than previous attempts at outsourcing. This in turn has an associated impact on the implementation of co-operative values and co-operative forms of ownership and control. For example, the UK Cabinet Office definition of a PSM places emphasis on independence of a mutual from the original public sector body, and on the role played by employees in the mutual. The definition also allows for flexibility in terms of the range of options regarding the particular form and legal structure a mutual is able to adopt (for example company limited by shares or guarantee; community benefit societies; charitable and community interest companies). This differs in degrees from definitions of established co-operative and mutual participants where emphasis is on members. This may, of course, include employees but more often focuses on customers, service users, suppliers, or a combination and, as such, mutuals have traditionally been seen as member-led organisations. What this points to is an emerging landscape of organisations, which identify as ‘mutual’ but are working beyond traditional boundaries of definitions.
To date, much of the research into benefits associated with employee owned mutuals has concentrated on those engaging in private sector commercial activity rather than in the delivery of public services. The mapping of PSMs – types and scope of provisions – is needed in order to develop a fuller picture of the range and variety of services and sectors. In addition, further research and examination is required to consider whether, in the longer-term, the benefits of PSMs (public and social value) can be fully realised.