Mutual Benefits
Public Service Mutuals have received very little attention in the discussion about the future of public services.
The government has tried to emphasise that their motivation for their overhaul of the public sector is not just about allowing private companies to compete but to improve service delivery.
Staff groups have been encouraged to form their own organisations and then compete for the public service that is currently being delivered in-house.
The government has established a Mutuals Information Service to give support and advice on this process and its website presents a number of case studies.
The current probation review which seeks to split probation trusts into commissioner and provider organisations has revived discussion of mutuals with a number of trusts considering the options of either setting up their own social enterprise to deliver services or encouraging staff to develop a mutual.
In most cases where mutuals are set up – spinning out is the jargon – they are granted the initial contract, typically for 2-3 years, and don’t have to immediately compete for the business that they delivered in-house. Once the initial contract period is over, of course, tenders are put out to contract in the normal way.
Never knowingly undersold
For groups of workers considering this option, I thought it would be useful to look at what could be learnt from Britain’s most famous mutual – The John Lewis Partnership.
As most people know, all of John Lewis’ 81,000 permanent staff are considered “partners” in the business which means:
- They have a say in how the business is run
- They share in the profits
The key to John Lewis’ continued commercial success is this partnership approach which means that every worker has a stake in the company, and wants it to prosper.
Their governance system seeks to combine commercial acumen and corporate social conscience and the John Lewis approach is enshrined in seven principles:
Purpose
The Partnership’s ultimate purpose is the happiness of all its members, through their worthwhile and satisfying employment in a successful business.
Power
Power in the Partnership is shared between three governing authorities: the Partnership Council, the Partnership Board and the Chairman.
Profit
The Partnership aims to make sufficient profit from its trading operations to sustain its commercial vitality, to finance its continued development and to distribute a share of those profits each year to its members, and to enable it to undertake other activities consistent with its ultimate purpose.
Members
The Partnership aims to employ people of ability and integrity who are committed to working together and to supporting its Principles. Relationships are based on mutual respect and courtesy, with as much equality between its members as differences of responsibility permit. The Partnership aims to recognise their individual contributions and reward them fairly.
Customers
The Partnership aims to deal honestly with its customers and secure their loyalty and trust by providing outstanding choice, value and service.
Business relationships
The Partnership aims to conduct all its business relationships with integrity and courtesy and to honour scrupulously every business agreement.
The community
The Partnership aims to obey the spirit as well as the letter of the law and to contribute to the wellbeing of the communities where it operates.
Change “customers” to service users and I think that any group of staff working in the social care field would find the John Lewis principles a great starting point to spin off from.
Readers may be interested in a new guide to financing mutuals from Social Finance (@socfinuk)
