The ideal of co-operatives, set up to meet mutual needs, is fundamentally a good one. Each co-operative member owns a share of the business, decisions are made democratically and profits shared. Step forward the Tories latest idea that this is a model to engage public sector workers to deliver better services at a better price and provide local ownership and control. But the Tories are seriously flawed in their thinking.
http://www.telegraph.co.uk/news/election-2010/7241494/George-Osborne-Conservatives-would-allow-public-services-to-run-co-operatives.htm
To enable the Tory model of a co-operative let us use the example of a school. The co-operators would be teachers and the parents but the school itself is a public asset. The state is not in a position, not least because of European state-aid rules and competition laws, to simply transfer that school asset to a local co-op.
And successful co-operative models are ones that have a degree of stability in the co-operators and the governing board but like most elements of the public sector the recipients of the school service will be a transient group – children grow up and leave or go on to a new educational establishment. So parents who no longer have children at that school are unlikely to stay involved for the longer term creating in-built instability.
Schools like all businesses and services require complex management and it is certainly not guaranteed that meeting both co-operative aims and business needs can be squared to meet public service needs. Cameron has also trumpeted the idea of profit sharing schemes – so workers benefit from public service efficiencies driving a culture to improve quality and reduce cost.
In reality these sorts of employee share-schemes are difficult to administer and expensive to run. And lest we forget a fledgling co-op is unlikely to be able to match the terms and conditions of staff or gain access to pensions schemes. There are also problems in the application of TUPE – is it TUPE if you opt to be a co-operative shareholder on transfer? And what about economies of scale? The public sector has huge purchasing power but it is only within the last decade that the true value of the public sector purchasing muscle has begun to be realised. If we fragment public service provision we are in serious danger of losing those recently realised economies of scale. Far from generating efficiencies this proposal could in fact become an expensive and unnecessary burden on public services
There is a danger that the trade union movement will be timid in its opposition to co-operatives purely because they are seen to be aligned to socialist principles and therefore de facto not a bad thing. The reality is they are far from the answer to the future of public service provision. Fragmentation of public service ownership and control has the same outcomes whether it is through a traditional privatisation route or through a seemingly softly softly co-operative model. It is still not publically owned or accountable and the workforce will suffer.
But before we are accused of producer interest there is a serious public interest argument. Like lots of social enterprise type arrangements, governance and accountability can be weak and leave the way open for infiltration by those that even most Tories would not want to see running local schools or hospitals. Moreover going back to the issue of a transient user base what happens when the initial enthusiasts move on? Who will then fill the gap or if they remain are those people still representative of local parents long after their own children have moved on from the school?
And finally ............who is delusional enough to think we will have queues of people wanting to be co-operators in local public services? We can’t get most people to a ballot box once in a blue moon so let’s not pretend interest in co-operatives will be anything other than luke warm. As trade unions we should kick the idea into the long grass or at least contain it to those sun-soaked vineyards where the concept actually works.
Anna Rosé