Co-ops for everyone?: Co-operative News


A recent policy statement from the Conservative Party on ‘Broken Britain’ grabbed the headlines. In some of the country’s most deprived areas, half of all teenage girls were pregnant or already mothers.


It was a shocking symbol of a serious problem. Except only in one sense. A Tory researcher had got the decimal point in the wrong place and the figure was actually 5.4%. So in fact not only not really surprising, but actually pretty good. In fact, this is better than the rate in Victorian Britain, when, self-evidently, Victorian values were dominant.


What the gaffe actually illustrated was the extent to which the Conservatives are vulnerable to accusations of amateur policy-making. A junior researcher made a mistake, which should have been picked-up immediately. One of the policy team should have said, ‘that can’t be right’, but no one did. As I say, policy amateurism.


The mistake was not unique – and is troubling, because the Conservatives are in pole position to win the General Election. It is in no one’s interests for a governing party to seek to implement half-baked policies. The question for our movement is whether the Conservative’s proposals on reforming public services through the widespread use of workers’ co-ops to run them is also 30 IQ points short of intelligent.


An interview by shadow Chancellor George Osborne on the Today Programme increased my worries. Faced by the question of what if a public service workers’ co-op decided to sack a respected manager and replace him or her with a less demanding boss, Osborne waffled. It sounded as if it were a question he had never thought about – so exactly how do shadow ministers prepare for key media interviews?


There has been considerable discussion in recent years about the role of co-ops in public service reform, so you would have thought everyone engaged in the debate would be confident and able to anticipate awkward questions. In fact, it is not only the Tores that are on difficult terrain. As the Financial Times said, the Conservative’s proposal ‘wrong footed’ the Labour Party.


The Co-operative Party also did not convince me with its line. General secretary Michael Stephenson responded: “George Osborne ‘s comments show the Tories are completely clueless on co-operatives. Public sector mutuality is about giving communities a say in how services are run.  That is about more than involving workers, it is about people running services as a community asset.  The Tories don’t have co-operative values…… George Osborne’s plan for employee-run public services fails to balance the needs of consumers, the public, with the interests of the public-sector workers themselves.”


The sound-bite ‘completely clueless on co-operatives’ has a pleasing alliteration. But in essence it is misleading name calling. The Co-op Party knows perfectly well that there are different styles of co-operative that deliver control to different groups of people. It is legitimate, of course, to argue that public service co-ops should not be worker-controlled. But the point can be raised more intelligently and in ways that are less dismissive of a key part of the co-operative movement. If workers’ co-operatives are unsuited to running public services, which other parts of the economy are they safe to run – and why are these different, or less important?


It is fair to recognise the issue of ‘producer capture’ – that producer interests can come before those of service users. The practical problems of this are often that members of the local government unions may dominate Labour Party branches and constituencies and can play a self-interested role in determining local party policy. This may subsequently translate into the policy of the Labour group on the local authority.


Yet the experience of Greenwich Leisure – and the many other social enterprises, which deliver about 30% of councils’ leisure services – seems very different. It appears that the reality is the opposite – that clear contract agreements between the council and the worker-led service provider actually improve service standards and employee satisfaction.


It should remembered that it is Labour councillors up and down the country that have been engaged in transferring services to worker-led social enterprises such as Greenwich Leisure. So I think we should understand exactly how the Conservatives’ latest proposals differ in substance from those of the Labour Party nationally and locally.


Labour policies that use co-operatives and social enterprises to improve public service delivery are now strongly ingrained. There is a workers’ right to choose to form a social enterprise across much of the NHS, backed by a social enterprise unit in the Department of Health that provides practical support. In practice, the level of interest by workers is limited.


Foundation trusts are also supposed to be connected to the co-operative movement, through a membership structure that encourages patients and other local citizens to join. While foundation trusts have helped drive-up standards and improve financial management standards, the actual engagement by patients and other citizens has not been great and has probably contributed little to the drive for reform.


Given this policy backdrop, it is difficult to regard the criticism from the Labour and Co-operative parties entirely seriously. To be fair, the Labour and Co-op MP and minister Ed Balls at least demonstrated that he has a grasp on the fundamentals. The Conservative’s proposal “is a really good one” he said, but one which they copied from the Government. He gave as an example the success of co-operatives providing out-of-hours cover to GPs.


Balls added: “I went… to see a children’s place where they were providing out-of-hours childcare for children before and then through primary school, it was run by the workers in that children’s centre, but the Conservatives are saying that they are going to cut the funding to those children’s centres and for that kind of out-of-hours care.”


Criticising the concept of co-operative public services as a means of cost-cutting – or a strategy likely to be undermined by other Conservative policies – is far more sensible than trying to claim an underlying policy difference that does not exist. Balls, however, will have studied the issue in more depth than some other commentators.


One of Cameron’s previous policy commitments was to create in government a new generation of ‘co-operative schools’, set-up and run by parents. In this they seem to be close to the concept of public service co-operatives that Michael Stephenson has in mind. But, as Balls pointed out, Cameron seems to have moved onto other ideas.


Policy analysis just published by the London School of Economics helps to explain why. It suggests that the attempt to copy the Swedish school system is probably mistaken. Importing the Swedish model may not make very much difference to the UK’s educational status quo,” suggest the researchers. Moreover, it could be financially difficult at a time of precious little public funds. “Creating new schools will be expensive if large capital outlays are required and ‘bad’ existing schools remain open,” they say.


None of this means that the Conservatives are actually wrong in what they say – merely that there must be a strong suspicion that the opposition’s shadow ministers and their researchers have not fully thought through their policies. They are also guilty of some very grand rhetoric. “This is the biggest shift of power from government to people since the right to buy your council house in the 1980s,” claimed George Osborne.


Of course, for many people in the co-operative and trade union movement, merely being on the same side as the Conservatives is deeply uncomfortable. This is nothing new. Norman Tebbitt once praised workers’ co-ops as an excellent idea as they would force workers to moderate pay claims. That did nothing to help trade unions accept and support workers’ co-ops.


Today the unions have reacted unhappily to the proposals for public service co-ops – but unions are often uncomfortable with any device that makes employer-employee negotiations more complex and nuanced.


Dave Prentis, general secretary of the main public sector Unison, argues the ideas are “a recipe for confusion”. “This is just another Tory Party plan to break up public services, plunge them into confusion and then let the private sector ‘pick over their bones’,” he says. “How are we to ensure that our schools and hospitals maintain high standards if there is no one to monitor or take responsibility when things go wrong. There would be enormous problems for staff too, with the breakdown of national pay bargaining and confusion over pensions.”


In fact, the point over pensions may be highly significant. There are widespread anxieties in the public sector that an incoming Conservative government might severely curtail staff entitlement to public sector pensions. Conservatives may consider that putting forward positive policies for public sector workers could sideline negative speculation on pensions.


But the strongest and most angry criticism of the Conservatives’ co-operative proposals comes from the Unite union. It is already engaged in a dispute with the NHS in Tower Hamlets over a proposal to convert some health services to the employees in the form of a social enterprise. Unite describes the Tower Hamlets’ move as “semi-privatising the most deprived” and a breach of a government commitment to keep the service within the NHS. The union warns that after the social enterprise is set-up, the service could be re-tendered and the contract won by “a North American private healthcare company in five years time, jobs could be lost and services to the public could become fragmented”.


Unite takes a similar view on the Conservatives’ proposals. “David Cameron is using the language of socialism to mask a break-up of public services,” says Gail Cartmail, Unite’s assistant general secretary for the public sector. “He is mangling the English language to advance his anti-state ideology.” She adds that the union fears for what the proposals might mean for employment conditions in the public sector.


It is a reasonable anxiety, even if also wrapped-up in rhetoric. But what we need now is a bit more reason – and rather less rhetoric.

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