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Last updated: 16 December 2009
It is the case that there is a real hunger for a different kind of society. That is the tide we can shape and ride.
In the wake of the credit crisis and the expenses scandal, the British public are demanding more control over the issues that matter to them most, and greater ownership of the services on which their communities depend.
Public services are not immune from this mood and, indeed, many of the challenges we face as a society – from climate change to managing long-term health conditions – require a delicate calibration of individual and collective action and an ‘ethic of engagement’ between empowered citizens and staff who deliver services at the frontline.
So the model we must look to in order to increase this sense of ownership and is no longer simply the PLC and centralised public service organisations, but the Co-operative and John Lewis: companies that are owned, respectively, by their customers and staff.
That’s why I will argue tonight that mutualism is not only right for the public mood, it also helps to deliver the accountability, individual empowerment, and community responsibility that public more widely both wants and needs.
The past year has been a period of profound, unexpected and unprecedented change, both for our economy and for our society.
In the wake of the credit crunch, the public have made it very clear that they are unwilling to put their trust in large organisations that they feel are not run in their interests and operate too far outside their control.
And, since the expenses scandal, the public have signalled the need for wide-ranging democratic renewal that will provide them with greater power over the issues that matter to them most – which is why, for example, I have been making the case for open primaries, electoral reform, lowering the voting age, and more directly elected mayors.
The evidence is that public support has shifted towards organisations with values; those in which long-term social returns are put ahead of short-term gains and which are accountable to those with a stake in their success.
So a new public mood has emerged.
Nearly two-thirds of those surveyed this year said they mistrusted the financial services industry, with almost three-quarters saying that they are concerned that these businesses put shareholders’ interests ahead of those of policyholders.
By contrast, 69% said that they were more attracted to companies run by their customers.
In banking, where trust has been severely hit, co-operative banks, mutual institutions and building societies stand out as ethical, values-led businesses, behaving responsibly in an industry where too many have not.
And the fact that John Lewis was named ‘Britain’s favourite retailer’ last year testifies to the way in which the public is willing to get behind a company with a ‘partnership’ model that promotes greater engagement, loyalty and co-operation amongst staff and thereby generates trust in its customers.
So in the post-banking crisis, post-expenses Britain, people want to feel a sense of ownership and control: something which both free market fundamentalism and remote and centralised statism are unable to meet.
And public services are not immune from this mood.
Nearly two-thirds of people say that they would choose a business that reinvests its profits for the benefit of the community to run their local services, instead of public or private organisations.
And there is a strong sense that the public want to deepen their involvement with public service delivery.
Already, more than half of people say they often get involved in public services – a figure that puts the UK at the top of an EU wide ‘index of co-production’.
It is clear that engaging citizens and service users in public services and giving them a greater sense of ownership is the key to maintaining the public’s support and confidence.
This should be seen as the next stage in the journey of modernisation, investment and reform we began 12 years ago.
The investment we have made has already helped to bring about innovative, breakthrough policy developments such as Foundation Hospitals and Co-operative Trust Schools.
And our reforms over recent years have demonstrated that public services can learn a lot by importing lessons from the private sector.
In particular, the focus on citizens as consumers – with the right and the ability to exercise choice over the services provided to them – has played an important role in driving up standards, and making services more flexible and more focused on the people who use them.
The nature of demand for public services has therefore changed, with the loosening of old constraints and the habit of accepting whatever is on offer declining.
But on the supply side, we now need to do far more than hold up the model of the relentlessly managed PLC. We need, therefore, to look at other successful ways of delivering goods and services.
The reason is simple: instead of an approach that implies that service providers alone have the responsibility for services, the challenge of engaging citizens is to achieve the opposite: to build shared responsibility for services and improve them by harnessing the efforts of both professionals and those they serve.
So there are important lessons to be learned from studying models such as the Co-operative and John Lewis – companies owned, respectively, by their customers and their staff.
After all, public services are owned by the public, so the public must have the right to influence how those services are delivered.
Indeed, can we really expect citizens to take on greater responsibility for their own health, learning, and environmental impact if public services fail to give them the right to shape the ways they work?
That is why the Government’s public service reform agenda continues to focus on strengthening relationships between empowered citizens and front-line professionals, building what the Innovation Unit calls ‘an ethic of engagement’.
And I believe that now is the moment to make mutualism an increasingly vital part of the Government’s reform agenda.
Not only are the principles of mutualism right for the public mood – based as they are on trust and reciprocity, common ownership and co-operation, and the premise that ‘everyone has something to contribute’.
They also mean that mutualism is uniquely placed to deliver real practical benefits in three critical areas: accountability, individual empowerment, and community responsibility.
By bringing users, employees, and other stakeholders together as members of the same establishment, mutualism transforms the organisational culture and embeds real democratic accountability.
As well as promoting greater levels of trust, it is a model for co-ownership that allows communities to effect genuine change in an organisation.
Whether it’s the 390 members of the Reddish Vale Co-operative Trust taking ownership of their school; or the staff at Leicester City PCT who have taken over general medical and substance misuse services for homeless people, or 1.3 million members of 122 NHS Foundation Trusts across England. 1.3 million is more than the membership of all political parties.
Because this combination of ownership and participatory involvement can ensure that public service staff feel themselves to be leading the reform process, rather than having it imposed upon them.
And it is also the key to unlocking enhanced performance – with employee ownership turning public service workers into champions of improvement and reform.
Take the example of Sunderland Homecare Associates, where staff turnover is 5% per year, compared to an average of 20% in the private sector and Margaret Elliott can point to higher customer satisfaction.
Indeed, more widely, the first half of 2009 saw employee owned companies once more outperform FTSE All-Share companies, a trend that has been in evidence for the past 17 years.
Above all, it is a model that offers a new sense of common ownership: one that marries collective action and individual aspiration.
By tradition, and by its very nature, mutualism is driven by and relies upon the commitment and active participation of the people involved. It is not something government can, or should, impose.
Governments can, however, create the conditions in which new social movements can thrive.
And, today, the opportunity exists to create a new social movement that can ensure people and communities can choose mutualism as and when they see fit.
We’ve already made progress in health with foundation trusts and in education with co-op trust schools. And I believe there are three other areas – Sure Start, social care and housing - where mutualism has a particular contribution to make and where I know the Co-operative party has been setting out a new agenda.
There is already one Sure Start Mutual in existence at Millmead in Kent. Through involving local residents in its membership structures, the centre has been able to design services around the needs of its users, as well as developing increased satisfaction, support and loyalty.
Community ownership has helped remove barriers and develop trust, so that the organisation is accessible to many people who would otherwise be less likely to use the services.
The potential for holders of social care personal budgets and citizens in receipt of direct payments to come together collectively, to improve the quantity and quality of the services they commission and receive should not be underestimated.
Indeed, five pilot projects have examined precisely the feasibility of co-operative models enabling people to collaboratively manage their care using direct payments.
These pilots have brought together service users, informal carers and personal care assistants to ensure that both users and employees can benefit from a more formalised system of care and economies of scale.
This means that recipients are able to remain in control of the day to day provision of how their care is provided, while personal care assistants can ensure they receive appropriate employment conditions.
Finally, I have been closely watching the development of the Brixton Green Community Land Trust development in my own constituency.
And I have been impressed by the ability of models such as this to ensure that homes remain permanently affordable, through separating the cost of the land from the purchase price, taking it out of the marketplace through a community land trust. This means that the homes will remain in the permanent ownership of the community.
In the new year, therefore, I will be meeting with Ed Balls, Andy Burnham, and John Healey to discuss how, together, we might encourage further the development of mutualism in Sure Start, social care, and housing where that is the wish of local communities.
So if we are to achieve what we want to achieve for reforming public services and redistributing power, then ownership matters.
That is why I am delighted this evening to be able to announce the creation of a new, independent Commission on Ownership.
Supported by Co-operative Financial Services, and chaired by Will Hutton, it will work to enhance our understanding of the influence that ownership has on the governance of our country. And I'm very pleased that Peter Marks, Chief Executive of the Co-operative, has agreed to be one of the first commissioners.
The Commission will seek to answer the big questions: how much does ownership matter? What is the link between fairness and ownership and how does that affect the distribution of power in our country? And what can, and should, government do about ownership?
It will look at how ownership affects accountability and community and staff participation in the public sector, as well as customer service, staff engagement, and entrepreneurialism in the corporate sector.
The Innovation Unit report – published today – explores some of these issues and considers some of the practical steps that we can take.
And I would like to close this evening by putting three propositions on the Commission’s agenda.
First, can we extend the principles behind the right-to-request to services beyond health, and enhance it by giving local communities a greater voice in changes which affect their local service?
Second, should we develop what I would term ‘a community right to ownership’ which would enable groups of staff and service users to request a system of governance that gives them greater influence over local services?
Finally, how can we create a level playing field for mutuals and co-ops, allowing them to thrive in an environment in which all providers are encouraged to listen to and support their staff and users?
Let me clear: the argument I am making today is not that mutual or cooperative governance is a panacea – a one-size-fits-all – for public services, but that for too long we have relied on a single, corporate view of what good governance looks like.
Instead, I am arguing that mutualism should be seen as a model that can play a powerful role in embedding the ethic of engagement at the heart of public services, rather than continuing to see excellent examples of this kind of engagement at its margins.
Let me finish with one final point. When we talk about reform of public services, we talk about structural reform from the eyes of leaders and managers. What we forget is the vision of the users, which can unlock the characteristics of humanity in public services.