The voluntary sector ‘franchise’: Co-operative News

For all the publicity and furore over the Conservative’s plans to reform public services using a workers’ co-operative model, a related and potentially equally significant commitment passed by almost unnoticed.  The Conservatives also plan to introduce ‘franchises’ for community and social enterprises to run services in inner cities and other deprived communities.


Baroness Sayeeda Warsi – a member of the shadow cabinet and shadow communities secretary – told the Independent on Sunday in an interview that there would be a change of direction in terms of support for deprived communities from an incoming Conservative government.  Spending on inner city areas under Labour had not been effective and a different approach is needed, she suggested.


This would involve what she termed a “retrenchment of the state” and, presumably, less funding.  “Clearly, if the solution to all their problems was money, we would have solved it, wouldn’t we?,” she said. “That should send out a strong signal to say: actually, money is not always the answer.”


By processing support through community groups, the finance that will be spent should be more effective, the Baroness implied.  Voluntary groups, social entrepreneurs and community activists (and potentially co-ops, one would guess) will be engaged to set-up and run community projects, using what Baroness Warsi termed a “franchise model”.  Projects would not necessarily be core undertakings, such as welfare to work schemes, but activities designed to help reconnect fractured communities and get people working together – such as through community gardens.


I must declare a level of scepticism about this.  Firstly, this seems to overlook the extent of community engagement within both large and small local projects, including in major regeneration schemes in which mutual organizations – represented by the Development Trust Association – take the lead.    I fear that widespread cuts for inner city support will be camouflaged by smaller schemes that have some community engagement.  It sounds as if the value of community activities may decline in the process, as well.


I worry that much of the community sector could be wiped out in the process.  While there are genuine reservations about the extent of democratic participation in some community groups, individuals who style themselves ‘social entrepreneurs’ are likely to have even less accountability and legitimacy as community representatives.


Despite this, Baroness Warsi’s proposals for action are interesting and seem to suggest an ideological coherence that is at one with David Cameron’s ideas for greater use of co-operatives.  This suggests that attacks on the Conservatives for simply trying to steal Labour’s clothes on co-operation may be missing the point.


Perhaps we should take Cameron more seriously when he says that he rejects the old Thatcher nostrum that ‘there is no such thing as society’ and take equally seriously his additional phrase that while there is, ‘it’s just that it is not the same thing as the state’.


Many readers will have some sympathy with the idea that while it was wonderful that the Welfare State was founded in the 1940s, it was wrong that in doing so the Government destroyed much of the mutual sector that had enabled many working (and middle) class people to make their own choices when it came to protecting their health and income.


I am also not alone when I describe myself as being on ‘the left’, but not believing that the state should provide all welfare services, nor determine the extent to which I should receive health and social care.


It may be difficult, though, to reconcile those beliefs with support for public sector workers who face the loss of their jobs and their replacement by people within the community who are volunteers, or employed on worse employment conditions.  We may given the choice that it is one thing or the other – community-based social provision, or nothing.


Putting forward an alternative approach will not be easy – and simply opposing cuts is unlikely to get anywhere, given the scale of the public finance deficit.    The reality is that the public services we are used to are becoming genuinely unaffordable.  Similarly, cuts in pay and conditions in the private sector mean that public sector pay and terms of pensions are now better than those of many people in the commercial sector.  (That comment is based on research, by the way, not prejudice.)


What is really galling is that the finance sector, which made this mess, seems unwilling to reform, while the public sector (which is pretty well blameless) takes a hit that will adversely affect all of us.  The scale of pain in the UK will not match that in Iceland, Greece, Spain, or Ireland, but it will be serious.


Meanwhile, a group of top economists has just warned that banks face another severe crisis.  Much of the failure in the past, they explain, is that banks paid out high levels of dividends and staff bonuses using borrowed money.  (The underlying issue is that banks recorded profits that were based on nominal asset values – but those paper profits were never realized.  It takes a small business to realize that a profit only exists when you have actually been paid!)


Now the banks are doing it all over again, say the economists, by borrowing to pay dividends and bonuses. 


It’s enough to make your blood boil, but that doesn’t solve the public finance deficit. 

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