Any is more mutuals?

The Government have announced plans to encourage more spin-offs of public services through mutuals and cooperatives. Surely a greater diversity of providers of public services has to be a good thing. Whether that is the private sector, mutuals and cooperatives, third sector organisations, or partnerships between all of these, more diversity will inevitably bring better quality and more citizen focused services.

So well done to Francis Maude MP in terms of the announcement today. But I had a strange sense of "Déjà vu" as I listened to Francis in the shower this morning. He started talking about Central Surrey nurses. Where have we heard that before? I recall Tony Blair talking about them, and indeed Gordon Brown and Andy Burnham. They are of course wonderful, as everyone who knows what they have done will tell you.

The problem is that it is only Central Surrey. There is no Central Norfolk, Central Kent, Central Cornwall etc. The remarkable thing about this example is that it is so rare.

The Government simply have to understand why it is that if Central Surrey Nurses are such a brilliant example it hasn't happened elsewhere? Unless the Government understand the barriers to the creation of more Central Surreys they will not achieve their ambitions for more mutual spin-offs.

Let us be clear there are substantial barriers. And these barriers have increased for the last six months.

First of all there is a very simple problem that as soon as an organisation spins off from the public sector it incurs a VAT bill, shortly to be at 20%. It all also acquires various other costs that now become more transparent than they were when the particular unit in question was part of the public sector.

And for staff contemplating the establishment of a mutual they need to feel that there will be a continuity of contracts from public authorities. Experience of the last few months is hardly helpful. We have seen a string of public authorities, local Councils and Health Authorities trying to renege on contracts, revising the prices downwards and, in one disgraceful health example asking for the money back.

And as Francis Maude said this morning he would expect that any proposal for a new mutual would be framed as leading to a "substantial reduction in costs".

I think it would be great to see a flowering of more mutuals or social enterprises and it is something we very much support. Something that the Lambeth Cooperative Commission has been looking at. It should be encouraged. As with Francis I agree that there is huge professionalism and commitment amongst public sector workers but given the barriers, given the need to cut costs and the lack of incentives, I am not sure where this one will go.

Clearly ACEVO, and organisations like Allison Ogden-Newton's wonderful Social Enterprise London, will provide support and encouragement. Allison's organisation has provided a very useful Transition guide and I have been talking to her about how we might support the training of leaders in the public sector who want to make the transition to a different culture and different ownership form. The third sector has a lot to offer.

So will there be a rush to mutuals? I wonder?