Public service reform is top of the political agenda. Without fresh ideas, the
obituary for the Welfare State will read, "Fondly remembered - Failed to
deliver". There will be nowhere for the public sector to go except the corrosive
route of break-up, privatisation, confusion and citizens' distrust.
There is, however a new vision for government, based not on serving citizens but
on co-operating with them. The idea is simple. Citizens, on their own or coming
together at a neighbourhood or some other level, play a key role in the design
and delivery of public services.
We call this the Mutual State. It draws on a long history of mutual approaches
that enlist people as partners rather than users. But it recreates a new form of
mutuality focused on participation and social entrepreneurship rather than
conventional ownership.
The last two decades have seen a battle for the control of public services.
On the one hand was the post-war tradition of state-owned, state-run services.
On the other was privatisation, the idea that monopoly public services should be
subject to market forces. The battle has yet to be resolved but it is clear that
without fresh inspiration or ideas, the welfare state could face death by a
thousand cuts.
Mutuality can re-energise public services. It is an ancient way of getting
things done, predating the modern public, private and charitable sectors in
Britain by almost a thousand years. It involves running organisations with the
close co-operation or control of key stakeholders. Involving users in the
delivery of public services makes them more efficient and responsive. It also
offers, at a time of political disengagement, the prospect of a wide-ranging and
participatory civic renewal.
There are now many examples of successful mutuality, in health, housing,
education, leisure, transport, social services and environmental work. The last
two decades have seen a remarkable upsurge in social businesses, from credit
unions and housing co-operatives to farmers' markets, community shops, and time
banks. Over the last year such businesses have grown at 9 percent, even though
they focus on the most disadvantaged areas of the country. Social enterprises
succeed because they build a long-term business with a clear focus on the good
of their community. Their mutuality is about participation rather than the
narrow model of co-operative ownership. They save money for the public-sector
because they are able to generate increased income and raise private finance,
including grants and social investment.
Five key elements should form part of the mutualisation of public services:
This would look at the lessons from community involvement and draw up guidelines
for the future. New initiatives could include elections to hospital trusts,
children's participation on school boards, user panels for local authority
services and designating individual, named, policemen as contacts for streets or
neighbourhoods. The audit would be managed by a community participation unit set
up as part of the Office for Public Service Reform in the Cabinet Office. The
unit's role would be to improve the quality of relationships with users in the
public services.
Local authorities should be recast as smaller, strategic units, overseeing the
co-ordination and accountability of local services. They would use their powers
to build capacity for public workers and citizens, enabling them to run services
mutually. Public institutions such as schools and prisons should be given
greater autonomy - more direct funding, greater freedom of financial management
- within a framework which sets down standards on quality.
This would mean creating a clearer and stronger legal framework for social
enterprises, including limits on demutualisation and new powers to raise finance
such as local bonds, and a quality mark, which sets out ways of involving
stakeholders and ensuring accountability. In Italy, social enterprises of this
form have grown in number by 40 percent since a new status was launched.
Selected state services should migrate to the new mutual status through a
recognised and approval process. One important ingredient of this process should
be an employee ballot.
The state would act as guarantor, funding and regulating the mutual service
providers. The National Audit Office role would shift from straightforward
inspection to enabling - equipping stakeholders with the skills to self-audit.
Tax funding for the new mutuals would be supplemented by social investment from
citizens.
A practical programme of mutualisation could start with public services or
institutions that have clearly failed. It would focus on smaller-scale
organisations such as schools or hospitals, with populations of 400 to 600
people. The National Health Service (NHS) could be de-merged into a Mutual
Health Service (MHS) built on smaller, manageable units run as self-governing
mutuals. The exceptional record of tenant-owned and managed housing should be
recognised. Local education authorities should be reformed as secondary mutuals.
The priorities for mutualisation are: health, primary and secondary education,
care for the elderly, childcare, employment advice, parks and libraries,
leisure, recycling, housing, youth justice and regeneration partnerships.
This summary chapter comes from the New Economics Foundation publication: The
Mutual State - How local communities can run public services, NEF Pocketbook
No5, London 2001, (ISBN1 899 407 405).
The authors are Ed Mayo, Executive Director of the New Economics Foundation and
Henrietta Moore, Professor of Social Anthropology at the London School of
Economics.
To obtain a copy of the publication write to: New Economics Foundation, Cinnamon
House, 6-8 Cole Street, London SE1 4YH, England, UK
E-mail: info@neweconomics.org.uk
For further information on the Mutual State, Communitate Mutuality and the New
Economics Foundation visit the following websites:
www.themutualstate.org
www.mutuo.co.uk
www.neweconomics.org.uk
