Will Tanner is a Researcher at Reform.
The Government has made the creation of public sector mutuals a cornerstone of its public services reform programme. Last month the Cabinet Office announced the creation of eight new Pathfinder Mutual organisations in addition to the existing twelve launched in August. Francis Maude has predicted that by 2015 up to one million current public sector workers, 15 per cent of the existing workforce, will be employee owners and partners in mutuals delivery public services.
Yet this ambitious attempt to open up public service delivery and give public sector employees a stake in the ownership and governance of service providers faces significant barriers to success. A recent Reform roundtable seminar explored the opportunities and challenges presented by these new models for public service delivery. It was Chatham House, so contributions are anonymised. But what came out of this was a complex of worries – about whether these organisations will be truly different to the ones they are replacing and whether the public service reform framework is constructed in the right way to deliver maximum value.
Of course, there is a good deal of evidence about how well employee-owned companies can perform. The employee-owned organisations and service providers represented around the table advocated the significant improvements to productivity, efficiency, and both user and employee satisfaction made possible through employee ownership. A significant body of academic evidence supports this view, with some studies suggesting that giving staff a stake can boost productivity and lower staff turnover.