COMMONS

Use of 'Mutuals' to deliver local services needs stronger and more coherent support warn MPs

06 December 2012

Effort by the Cabinet Office to promote the development of employee owned cooperatives must be married more effectively to the work of DCLG to deliver localism reforms before mutual models of local service delivery can flourish, says the Communities and Local Government Committee.

Launching a report published today detailing the findings of a recent inquiry into mutual and cooperative approaches to delivery of local services, CLG Committee Chair Clive Betts said,

"The prevailing winds may favour mutual and co-operative approaches to delivering local services, but we found far less change that might be expected across local government.

This lack of progress was surprising given the benefits claimed for mutuals and co-operative structures which offer employees, and in many cases service users too, a say in how an organisation is run and how services are adapted to suit local needs leading to greater customer satisfaction, innovation, lower production costs, higher productivity, increased resilience and job creation.

The Cabinet Office programme to promote the use of employee owned mutuals across the public sector remains isolated from work by the Department for Communities and Local Government, through its localism reforms, to stimulate opportunities for co-operatives and mutuals to take over local services.

Failure to connect these two strands of policy activity betrays an absence of rigour, enthusiasm and understanding that is essential if the mutual model for local service delivery is ever to take off."

In its report, the CLG Committee concludes that if the government wants mutualism to transform the shape, responsiveness and quality of local service delivery then effort is required to remove a number of significant barriers:

  • Advice - Government and local government itself should provide “off-the-shelf”models and guidance to reduce confusion and risks that deter local authorities currently from considering using mutual or co-operative models for service delivery.
  • Leadership - Co-ordination between the Government’s Mutuals Support Programme, the Department for Communities and Local Government and the Local Government Association must be improved to gather and disseminate evidence on the operation of mutuals and co-operatives in delivering local services.
  • Financing - Government must do more to inform and educate financial institutions about lending to mutuals and co-operatives and it must examine tax support for mutuals and co-operatives.
  • Accountability - all new organisations must remain accountable to the local Council (usually through a contract) and be transparent in their operations. Through commissioning and oversight processes authorities must prevent services from fragmenting and protect the operation and ownership of local public assets.
  • Procurement - Rules must be drafted to confer maximum flexibility in tendering for services so that mutuals and co-operatives can compete fairly with large companies and in-house providers.

Further Information

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