March 8, 2021

The Editor Speak: Is mutualization a better solution to selling off government assets?

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Colin WilsonwebI must admit I know absolutely nothing about mutual and when this document “Our Mutual Friends – Making the Case for Public Service Mutuals” came across my desk I looked at it with suspicion. I noticed quickly that there were over 20 pages of reading matter to plough through and I wasn’t looking forward to it.

Thankfully the local businessman behind this project, Steve McIntosh, has provided us with a document that was produced by The Mutuals Taskforce, a UK group appointed by Minister for the Cabinet Office, with the backing of the Prime Minister and Deputy Prime Minister just over three years ago. Please see iNews Cayman story today “Making a strong case for Public Mutuals”. It was surprisingly easy to read and I now know what it is all about.

According to the document “A public service mutual is an organisation which has left the public sector ‘parent body’ (also known as “spinning out‟) but continues to deliver public services. Mutuals are organisations in which employee control plays a significant role in their operation.”

In other words you set up a government entity or department as a private company, and the existing staff become shareholders. The company is then contracted out to deliver its service.

In the CNS story published on Wednesday (28) “Public mutuals ‘best solution’” that article explains how the mutilization of various Cayman government departments would work.

McIntosh makes a great statement on the article – ““Government generally tries to solve problems by taking more control and what’s needed is for it to have less control.”

He also says, “Everyone agrees that government is somewhat inefficient in what it does but the solution to that is not to make arbitrary cuts. People like idea of smaller government in the abstract but when it impacts services, they’ likely to feel differently about it.”

In an article in The Guardian UK from November 2013 “’Bigger is better’ for public service mutual” it says:

“In 2011 cabinet office minister Francis Maude set out some high hopes for the future of public service delivery – by 2015 he wanted as many as one million public sector workers to be co-owners of their organisations. No longer will public leaders have to choose between state management and outsourcing, said Maude – there is a third way that combines public sector ethics with commercial and business acumen.

“Since 2010 the number of public sector mutuals has increased from nine to about 70 – a notable achievement but not the resounding “mutual revolution” Maude was aiming for. The recent woes of the Co-operative group, which announced it will have to cut 50 of its 324 bank branches after discovering a £1.5bn hole in its balance sheet, also place a question mark over the future of the mutual model.

“But Raza Khan, chief executive of Buckinghamshire Learning Trust (BLT), one of the biggest mutuals in local government, says: “Francis Maude is on the . It is one of the most compelling ideas the public sector has seen for quite some time.”

However, he is not convinced staff mutual as enthused by Steve McIntosh is the way to go. The article says:

“But Khan is unconvinced about the effectiveness of staff mutuals. “We’ve got a model that most closely resembles the approach one might take in the private sector,” he says. “I chose non-executives because of their specialist skills or expertise, who represent the markets we are working in. The problem with a staff mutual is you’re limiting the expertise at the level of governance to people who are already staff within the company, so there’s nothing new coming in. And you can’t always assume that the priorities held by staff of representative bodies are the same as the priorities held by the customer.”

To read the whole article go to: http://www.theguardian.com/public-leaders-network/2013/nov/05/public-service-mutuals-slow-trend

I welcome government comments and I applaud McIntosh for suggesting government re-think its strategy to sell off its assets.

I am not qualified to make the conclusion mutualization would be a better choice but I hope government at least take a look at it.

Please see iNews Cayman story published today “Making a strong case for Public Mutuals”

 

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