Osborne, Co-ops, Free Schools and Privatisation

George Osborne was on the Today programme this morning talking about Tory plans to open up the delivery of public services to social enterprises  - in particular, it seems, to co-operatives.  I assume Steve Hilton has decided that we're not awake enough to understand what a social enterprise is at 7.10am (he's probably not wrong), so he instructed him to just keep saying the word co-operative as often as he could in three minutes.  It is a lovely word after all.

I have written a lot about how public services need to improve.  I am also an enthusiast for socially enterprising approaches to delivering services.  But I'm suspicious of political enthusiasm for social enterprise.  In this case I'm picking on the Tories, because I find them (and Osborne in particular) unconvincing, but I'm pretty sceptical about Labour's motives in this field too.  

There's something of the four legs good, two legs bad dogma about politicians embracing social enterprise. They are so desperate (as they should be) to work out ways to make the UK a better place to live that they can end up believing that transferring services to social enterprises will magically make things better. They can definitely make a big difference if the social enterprise is good at what it does.  But they are not inherently better at doing things than other organisations or businesses.

I also have a question about the likely capacity for social enterprises to deliver services.  I know all the stats about how the sector is expanding, but I'm also aware that not everyone is cut out to be an active member of an employee-owned business, of the kind Osborne is proposing.  I'd be a rich man if I had a pound for every public sector employee who's told me that they're hatching plans to set up in business, to break free from the dead hand of bureacracy.  I'd have about £3 if I had a pound for every one that's done it.  Osborne said this morning that services will only be transferred to co-operatives if that's what staff want.  I think that, sadly perhaps, is a big if.  

So, if I'm right, and the public sector won't be transformed by hordes of public sector workers all desperate to set up co-operatives, how will we find different ways to deliver services?  Enter the private sector - particularly if the Tories get into power.  I suggest that politicians will keep talking about the opportunities for social enterprises, pointing us to that lovely social enterprise which collects bulky waste in Liverpool, whilst plenty of the opportunities will actually be gobbled up by the private sector, who will soon speak the language of social responsibility with more fluency than your average social entrepreneur.  

I do think that will happen more quickly if the Tories get in.  Read for example this account of a recent Politics Show about Michael Gove's Free School plans.  They interviewed Tory MP Tim Yeo, who made it clear that he thought that the Free School plans were flawed - not because schools should not be independent, but because the organisations that will run them won't be allowed to make a profit.  One rogue Tory does not a party make, but I very much doubt that Yeo is alone.  

Gove wouldn't dare allow idea of private-sector-run Free Schools to get in front of voters.  But two years into a Tory government, with restless right-wing backbenchers giving Cameron grief, you can well imagine that things might change.  Co-operatives'  real value to Osborne and his colleagues may be to clear the way for further privatisation of public services.  

Comments

[twitter.com/gentlemandad]

I am a co-op enthusiast as well, but I am really not clear of what they are suggesting the benefits of being a public service co-op would be over being a public service operation. Oh. I guess the benefits are that the public services are releasing their responsibility for public service costs/pensions/national wage negotiations.

OK, but then I can't see much benefit from taking on the responsibilities which come from being a member of said co-operative. I wonder who they're intending will be prepared to take on these roles and how they're planning to make sure they understand what they'll be getting themselves into.

[David Floyd]

Well, the description 'dramatic powershift' to public sector workers is highly disingenuous. Co-operatives that are entirely dependent on state funding will have exactly the same power relationship to government that they had before - but with some added 'issues'.

If their funding comes direct from central government rather than going through local councils, the state will hold its power over them centrally rather than locally - particularly useful if local councils aren't run by the governing party.

If the new co-ops are delivering services on a contracted basis, rather than as part of the public sector, it will be easier for the state to just stop funding entirely when it feels like it.

And it will also be harder for unions to operate across loads of different organisations with no overall pay structure.

[Mike Chitty]

Co-ops and mutuals seem to work well when they are the product of the convergence of a set of values and objectives. They work less well when there is much divergence around values and politics. Or am I out of date?

Expecting groups of people to consistently and successfully transition from public sector service provider to effective coop is surely naive? And as previous commenters have pointed out there is no guarantee of improved service delivery anyway. Many bureaucracies are pretty efficient at turning policy into practice. Most of the problems lie with policy NOT practice.

[unitybridge]

Had the misfortune of listening to DC whilst getting lunch - the idea sounds so much better in our heads than in his hands. If this was a genuine strategy of decentralisation and freeing groups to work together great but within the existing framework of Westminster centric control and funding and dismembered public servants this is window dressing.

A policy that said - we will give a community (say 150,000 people) their cash within federal regional frameworks to do what they hell they want to organise their own education their own welfare and employment support to their own priorities - then maybe we woudl have some interest. This woudl allow somem real change and real empowerment - and maybe mistakes would be made but at leats tthey would our own mistakes! DC has no belief in empowerment or social enterprise beyond the cherry picking that may happen in the SE.

This is nothing more than a ruse to buy off public sector workers votes safe in the knowleldge that no-one will choose to do it. Then as pointed out above full scale privatisation for centrally issued contracts can commence.

Colin Ward uses the example of Keith Panton (essay Work and Surplus - cant find a weblink) - if the workers took over the car factory they would question what they do as well as how they do it. If public sector workers really took over service delivery I am sure they will not be allowed to stop the horrendous rules they impose to avoid paying homeless people benefits, to delay unneccessarily access to services, to place people in prisons just to become hardened criminals.

Putting people in real control of their own services would force change - just not the change DC and the Tories will allow!

[Craig Dearden-Phillips]

Rob, I share your politics-scepticism but there is a real problem in public services and, short of privatising them, something needs to be done. Apolitician like Osborne talking about social enterprise on the Today programme would have been uttely unheard of only a couple of years ago. If we think social business is right, it is the way forward and a Good Think, then political legitimation is surely a process it needs to and ought to go through. If we are to come of age, we have to also become part of political discourse, cringing through it sometimes is.

[Rob Greenland]

It's a good point Craig. Perhaps I do need to listen to Phillip Blond after all when he told me off on Twitter for what he saw as a negative piece.

We do need to engage with them, and, potentially, this announcement from the Tories (and the kick up the arse it should give the Labour and Co-operative movements)could be a real door-opener for social business.

Let's hope we can get beyond some of the nonesense of the biggest shift in power since the sell-off of Council housing. I accept I'm looking on the downside of all of this - but I sincerely believe that both politicians - and the social enterprise movement - need to start being a bit more realistic about what is and isn't possible. We also need to be realistic about the things that will get in the way of more social enterprises delivering services.

And of course, as a true social entrepreneur, I need to point to how things could be improved, and see the opportunities in this for me. If, as I imagine, not that many people will come forward to set up co-ops, what can I and others do to encourage some to do it? And how can we change the context social enterprises will work in - mind-numbing commissioning for example - so that they have a fighting chance of making things work in what is going to be a massively challenging few years for the UK.