The news that the Conservative Party intend to facilitate greater employee ownership in public services is one of the boldest policy announcements of David Cameron’s leadership. Labour has already thrown scorn on what appears to be political cross-dressing, and the left-leaning twitterati have pored over the proposal for inconsistency and policy naivete. But what evidence is there out there on the viability of such schemes, and how likely is it that the Tories could deliver this successfully?
I authored a Demos pamphlet on alternative ownership models last year, and while I’m more concerned with ownership pathologies in the private sector, the report looks at the potential and precedents for employee ownership in the public sector too. Here are three sets of questions thrown up by this morning’s announcement:
Growth areas. The first question must be which areas of public services might such a model be appropriate for. The main precedents are in health and care, with Central Surrey Health and Sunderland Home Care the best known examples. Foundation trust hospitals are themselves mutuals, though (like building societies) technically owned by their “users”, which means their local communities. This report makes useful reading on the growth potential in the health sector.
The implication here is that mutualism and/or employee ownership (not all mutuals are employee owned; not all employee ownership is a form of mutualism) work where efficiency and effectiveness depend heavily on “front-line” staff, whose vocation to their work is critical. Care work and professional services are therefore immediate areas to consider, as Charles Leadbeater’s report on this argued. The entire “well-being” agenda is one where an engaged public sector workforce is a precondition.
We’ve already heard pledges for many more co-operative schools, and of course public service broadcasters are already tacitly organised as mutuals. What is less clear, from precedents, is whether the model has much to offer an organisation as vast as the Post Office.
Benefits. George Osborne has been smart by framing this within the Conservative tradition of giving away state assets to working people, council houses being his case in point. This is a better Conservative tradition, certainly, than the one in which state assets are sold to unaccountable private sector monopolists, before being switched into a public-private hybrid. There is some decent economic evidence that employee-owned organisations…