A Conservative mutual moment?

The Conservatives have announced plans to allow public sector workers to set up cooperatives to run services such as primary schools and jobcentres. Unsurprisingly the response from the Cooperative Party has been sceptical, and my own initial reaction was to wonder whether this might be a way to privatise public services by the back door: set up cooperatives which are then “allowed” to demutualise.

More to the point: George Osborne says that these mutuals “would be contracting services to the local authority or the National Health Service [or] for community nursing or for primary education”. I’m not an expert on public procurement rules, but presumably if mutuals were set up to contract with public authorities at arm’s length then it would be necessary to have a competitive tendering process.

Is the real story here a Tory plan to put primary schools, jobcentres and nursing services out to competitive tender – with the figleaf option of encouraging bids by workers’ mutuals? At the very least, I hope journalists will start probing into how competitive tendering would affect this plan – let’s see if it holds up any better than the last few policy announcements from the Conservatives.

Setting such cynical thoughts to one side, however, supporters of the cooperative movement should take some comfort in the fact that the Conservatives – along with “ownership doesn’t matter!” Blairites and centralising statists in the Labour party – are now expressing support for mutualism and cooperation. As Slavoj Žižek observes, the surest sign that a political ideology has triumphed is when it is appropriated by its former opponents:

The true victory occurs when the enemy talks your language. In this sense, a true victory is a victory in defeat: it occurs when one’s specific message is accepted as a universal ground, even by the enemy.

If the Conservatives are sincere in their support for mutualism, that is a good thing. Even if they are insincere or skin-deep, the very fact they perceive talk of mutualism to be a vote-winner is a sign that this may indeed be “the mutual moment”.

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10 thoughts on “A Conservative mutual moment?”

  1. On balance I don’t think it’s a ploy. I do seriously wonder though how the public procurement rules will apply; and I suspect the commitment to it (and the whole Philip Blond thing) is skin-deep – or at least doesn’t extend far past the Cameroons’ office door.

    As for Labour: it’s pretty clear that mutualism is going to become more important in Labour policy over the next few years (see Tessa Jowell’s recent speech on this topic). Already there are things like cooperative trust schools, and frankly mutualism is the “last man standing” in terms of Labour intellectual/policy traditions. Blairism is dead, old-style nationalising centralism is dead…

  2. But yes: that Philip Blond piece is very interesting. Mutualism as the new centre-ground?

    (Edit: that’s who Philip Blond reminds me of: Anthony Giddens, architect of “the Third Way”. Useful as a provider of intellectual credibility in opposition, abandoned in office.)

  3. I agree that the Tory shift towards mutuals is positive, but I’m not sure the procurement point is quite right. This is for user-facing services, and the idea is that parents and patients will choose where is best for them: the best schools and the best hospitals. So you don’t need contracts or procurement rules as such, because the people who use the services are doing all the procuring. All you need is budgets and some basic ground rules.

    Nevertheless, I think there is a more positive case for the ‘entryism’ you worry about: as you suggest, mutuals are the ‘acceptable face’ of non-state provision of taxpayer-funded services. By fighting where the argument can be won, the Tories will be able to show that you don’t need the State to run everything in order to get good service, and that actually, turfing the State out can improve things.

    Having turfed the State out of provision, what earthly reason is there for the State to start dictating what ownership structure provision ought to take? All sorts of ownership structures can exist, and the State cannot account for them all! (Does this make me a ‘Blairite’? That’s twice you’ve inflicted that calumny on me: I’m counting, Halton. 😉 )

    Will the mutuals then lose out to privately-owned enterprises? Don’t forget that the mutual savings sector is still going strong a hundred and fifty years on, the Co-op just bought Somerfield and I think I only need to say ‘John Lewis/Waitrose/Ocado’. Mutuals are quite able to compete and win business in a free-and-fair marketplace. So sure, it may be a way to win the argument on opening up provision more widely, but that’s not a bad thing. Mutuals are able to compete in a variety of areas already, and the evidence suggests in health particularly, mutuals would be very well placed to compete against privately-owned providers. (The latest studies are firmly on the side of putting medics into management.)

    Some would lose out, of course, but I’m not sure that the mutual sector would be driven out of health or education, and to the extent that they did lose out to other providers, they would be doing so because they couldn’t balance the resources available with the needs of service users. I’m sure you wouldn’t want to be on the side of sustaining an expensive, inefficient school simply because you like the ownership structure!

    My worry is that this is being driven by Blond et al. Partly because it’s Blond and I think we have a rather similar reaction to the oh-so-trendy-theologian-cum-political-wunderkind, and partly because his trendiness will wear out and I don’t want the idea of non-state provision to wear out with him.

  4. Phil: my reference to public procurement came from Osborne’s comment about the cooperatives “contracting with local authorities” etc.

    And don’t worry: I’m not accusing you of being a Blairite ;-). I was almost directly quoting Tessa Jowell, who suggested that one error she and her fellow Blairites had made was to think that ownership wasn’t important – all that mattered was regulating services so that they worked effectively.

    As for mutuals competing against private sector bodies: up to a point, yes. But the question is whether “competitiveness” should be the only issue, and whether mutualism has benefits even where a private sector organisation could provide the same services more cheaply. I think that’s where the fundamental political-philosophical difference lies, and I’ll believe the Tories have moved from one side of the line to the other if and when I see it.

    I’m also fairly lukewarm about employee-only cooperatives, especially in public service provision (which already has a tendency towards favouring “the producer interest”). There seems a big difference in philosophy between John Lewis (owned by its employees) and the Cooperative (owned by its customers). I’d prefer to see public services use cooperative structures that involve both providers and users of services, as mentioned in my post.

  5. Mutualism has benefits even where a private sector organisation could provide the same services more cheaply.

    Illogical, captain. You can’t disentangle the ‘extra benefits’ of ownership structure from the service as a whole.

    Look at it this way. If parents appreciate being involved in a school’s running to a greater extent than they would be with a privately-owned school (and don’t forget, privately-owned schools can easily institute their own PTA or parent-governors), then they will send their children to the co-op school rather than the private company school. On the other hand, some parents might prefer to send their children to a school and let the ‘experts’ get on with it. I’m not going to make that choice for them.

    Thinking about it, this is another of the issues I have with favouring mutuals in this way: the danger of middle-class capture. In my estimation, co-op schools are most likely to succeed in areas where people are willing to be involved in organising and running a school, and probably also in helping with financing through the provision of cheap investment capital. That’s middle class down to a tee, and the working class areas which really need new, innovative schools will miss out.

  6. Phil: the question is whether one regards it as an inherent good that services are run by and for the people who use/work for them, rather than either under state control or as commercial enterprises.

    If you regard a free market in education as the way to deliver the best outcome, then by all means let cooperative schools compete with commercial ones. Fine. But that begs the question of whether the free market is the appropriate means of providing education.

    As for “middle-class capture”: yup, a concern, and I must admit I don’t know enough about existing cooperative provision of public services to know how that plays out in practice.

  7. Turns out I may be more wrong on procurement. Link below muses that locally-procured services could mean a radical disalignment of parent and teacher interests. If the Tories are thinking joined-up-ly on this, they’ll realise that the Swedish schools idea plays in here. The fact they are so at sea on health suggests a complete lack of joined up thinking.

    The take-home is that worker co-ops in a market place align consumer interests with their own. Outside a marketplace, the danger is, as you say, that they simply entrench producer interest.

    http://stumblingandmumbling.typepad.com/stumbling_and_mumbling/2010/02/coops-incentives-the-state.html

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