Coffee House

Mutually assured benefits: Francis Maude’s public sector revolution

2 August 2014

A revolution is underway in Bromley. The average time that it takes for a leg ulcer to be treated and healed has been cut from 21 weeks to 5 weeks. The partnership that has achieved this dramatic improvement is one of 100 new public sector mutuals employing 35,000 people across England. These are employee-controlled businesses that have been spun out of the public sector, and which now account for £1.5bn worth of public services.

Francis Maude, the Cabinet Office minister, is possessed by ‘missionary fervour’ for mutuals.  He told Coffee House that they ‘improve morale and boost productivity.’

Productivity is among Maude’s foremost concerns. Public sector productivity, according to the ONS, flattened between 1997 and 2010 — a result of stultifying management and low morale. The Cabinet Office says that after a mutual is spun out, absenteeism and staff turnover fall by 20 per cent 16 per cent on average, and the improvements in Bromley are an indication of what can be achieved when the state entrusts public services to the people who run them.

Why does mutualising make a difference? ‘Ownership is a very powerful thing,’ says Maude. ‘Responsibility and accountability galvanise people.’ He argues that freedom from bureaucracy, coupled with greater collective responsibility among workers, have encouraged frontline staff to innovate. ‘Free to do things — that’s what [mutualised workers] say [to me],’ he says. ‘Ownership is an emotional and psychological change.’

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Maude illustrates his point by recalling a recent visit to a healthcare partnership: ‘All of them, even though they are committed health professionals, they talk about “when we used to work in the NHS”.’ It’s a subtle but important change of mind-set.

Maude says that mutualisation is a form of privatisation. A contract for mutualisation contains conditions about efficiencies and productivity. Each one is different because mutuals reject the mantra that ‘one size fits all’. Yet the principle is consistent.

But, is the principle popular? Critics ask why there are only 100 mutuals. One former management consultant, speaking on condition of anonymity, told Coffee House about the problems encountered when mutuals were spun-out of local government:

We found they only really worked if the local authority continued to provide financial and capacity support and occasionally assets, which defeats the object. The nature of most public sector workers is a desire for stability, limited risk, and work/life balance; so their desire to do what’s required to make a mutual work is fairly limited, given that it doesn’t really increase your earnings. We found the drive was always from the top, and staff appetite was low, which isn’t really how it should work.’

Maude counters these observations by pointing out that the government, be it local or national, supports the would-be mutual through the ‘spinning-out phase’. This assistance comes in various forms: legal, accounting, business strategy, management and so on, all of which is geared towards the aim of boosting efficiency and productivity in line with the contractual obligations. The Cabinet Office has spent £6m of a £10m fund designed to provide those services. Local authorities and the parent public services also help. Maude emphasises that no public sector mutual has yet failed, although he is quick to concede that ‘eventually one will’. The message, though, is: so far, so good.

The next challenge is to mutualise larger public services. There are encouraging signs. A fire brigade has expressed an interest. The idea is that the fire stations would mutualise to provide the local authority with a service under contract. It is thought that this structure would provide greater operational flexibility, thereby improving the quality of the service while offering greater value for money.

Maude knows that there will be difficulties and disappointments. As he put it at an event last week: ‘We know this is just the beginning of a massive transformation.’ Nevertheless, his conviction is unshakeable.

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Show comments
  • whs1954

    Sorry, Mr Maude, but the British people are weak, and look to their Attleeite consensus welfare state as a permanent structure. They loathe the concept of privatisation – the *very idea* anyone could make money out of these essential services! – and the moment one mutual goes under, and the citizens of local authority X are potentially left without healthcare or nursery care for just one day – watch the shrieking howls go up, particularly from people who are not in fact affected.

    Your only solution is to (a) privatise *everything*, nationwide, in a certain sector (eg child care) in one swoop and (b) ban the Labour Party, so these things cannot be reversed. And as you won’t do that, then, just wait for the next Labour Government, wailing and hollering and sanctimoniously insisting that full state provision is the only ‘fair’ [sic] way that everyone can get their free services.

    You see, we don’t notice if the income tax goes up a penny in the pound, but we do notice if we’re a middle class yummy mummy on a combined household income of £100k pa but free childcare is taken off us. Even if the welfare state was never meant to be for people on six figures to get free stuff – well, we’ll vote against the Tories who strip us of that – falling right into Labour’s trap of getting everyone “to buy into” the welfare state. Apparently the middle class won’t “buy into it” unless they’re trapped by it too – as indeed most of them are.

    Ban the Labour Party, Mr Maude, then strip out the middle class welfare dependency and cut their taxes instead. Your opponents will skin you alive otherwise; you may as well skin them first.

    • Des Demona

      Ahhhhh the British Public are ”weak”? If that’s the case then why not privatise the NHS and ban the Labour Party? Should be easy, no?
      Except of course, they will then show you how ”weak” they are by booting your money grubbing, ”I’m all right, Jack,’ axxx into the long grass.

  • Fraziel

    Francis Maude is a c*nt. A truly vile revolting individial and a classic example of everything utterly appalling about the political classes. The greediest MP in parliament, holding down the wages of those on poverty pay and he looks like a cross between a vampire and a bullfrog.

    • Holly

      ….And with only twenty ‘pilgrims’ in position, I can understand your anger towards him.
      Tee hee.
      Better a cross between a vampire and a bullfrog, than Balls & Miliband who are a cross between a leech and a bull sh*tter.

    • HJ777

      I have to say that you don’t exactly come across as a pleasant or rational individual.

    • David B

      Hallo Tele! I knew this article would give you hart burn

      • telemachus

        .telemachus would never use such language

        • David B

          You shouldn’t have so many alter-ego’s

  • DavidL

    Maude is proving to be the unsung hero of the Coalition – quietly making fundamental changes to the machinery of Government to the benefit of both the taxpayer, and the user of public services. And what’s not to like about mutuals? So much better an investment than PFI.

  • monty61

    Mad Frankie’s latest bit of Muppetry.

  • Roderick

    Isn’t the mutual model of John Lewis often held up as a blueprint for fixing dysfunctional organisations? Given that JL seems to be very popular with trendy middle-class lefties, you’d have thought that a bit of joined-up thinking would have occurred among shoppers when at their Gormenghast-ly public sector jobs. One can but hope.

  • David B

    The statement by the management consultant really sums up our civil servants, they don’t care about service only how little they can do for how much they can get.

    This idea is breaking that cycle giving employees something to be proud of. It is exactly this type of innovation that Burnham reals against with his scream of “privatisation” as he doesn’t want this type of improvement.

    I wonder how long it will take Tele or one of his alter-egos to have a fit over this

  • Span Ows

    Excellent news, I can’t remember who said it (I think the great and late Lady Thatcher) but ‘if nobody owns it, nobody looks after it’ or words to that effect (really stating the reason for shoddy practises, time wasting, strikes, sick leave abuse etc mainly in the public sector because nobody had a stake so nobody cared).

  • High Sheriff

    These mutuals work because the workforce feel valued.
    They are a template for more.
    They also tell us that in other areas of the public sector, if the workforce were valued the benefits would be immense.
    Thus the teachers-we do not actually need Free Schools to achieve this.
    Thus healthcare-we do not actually need financial, clinical targets or more regulation to achieve it either.
    Power to Francis Maude, an unsung hero of the Coalition.

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