Good with local services?
With public services being increasingly marketised, a group of local authorities is looking to the co-op model to ensure the interests of local people are protected. Clare Goff reports
At the inaugural Co-operative Councils conference in mid-September the biggest cheer of the day came when Rochdale Council leader Colin Lambert read out clause IV in response to earlier claims made by the leader of Manchester’s Council, Richard Leese, that co-operatives were not essentially socialist.
‘Co-operatives are the modern equivalent of clause IV,’ Lambert said, citing Sydney Webb’s 1917 statement that the Labour movement be based on the ‘common ownership of the means of production, distribution and exchange’.
Taking place in the People’s History Museum in Manchester, with its backdrop of banners chronicling the long struggles for union recognition and for people’s rights, the conference at times reignited the spirit of struggle and solidarity that runs through the history of the Labour movement.
The 13 councils that make up the Co-operative Councils Network – including Lambeth, Rochdale, Liverpool and Sheffield – are united in their commitment to change the relationship between local authorities and the communities they serve. With Labour councils in the main presiding over larger cuts than their Tory or Lib Dem counterparts, they need a vision for the cuts agenda that offers an alternative to that of outsourcing-under-the-cloak-of-the-Big-Society.
Co-operative councils is that vision: the 13 councils plan to progress the principles of mutualism and co-operation in their local areas. Rather than rolling back the state, their aim is to change the role of the state, helping communities to take back control over their lives and of the services they interact with.
TURNING THE COUNCIL MODEL ON ITS HEAD
The model co-operative council is Lambeth, dubbed the ‘John Lewis’ council in opposition to Tory-led Barnet’s ‘Easyjet’ council.
Steve Reed, leader of Lambeth Council, distances himself from the John Lewis tag but is ambitious in his plans to mutualise all council services starting with youth, adult care and parks. He says the move towards greater co-operation is something the council was heading towards already, with greater involvement from citizens and users in services such as children’s centres and schools.
Local community leaders are keen to play a greater role in the running of services, he says, and early evidence shows that youth services run by or with input from its stakeholders perform better for less money.
Lambeth’s co-operative vision will include a major review of its procurement function, citizen-led commissioning processes and the introduction of a time bank. Its vision is based around seven principles, which Reed says will turn the council on its head.
‘It’s about a new kind of
partnership in which the line
between the state and the
community is blurred.’
– Simon Parker, NLGN ‘We need to shift from being purely service providers to creating an enabling council with services that really meet people’s needs. We need to change the way people experience control in their lives,’ he says. Oldham Council has a slightly different take on the idea of a co-operative council. Its new leader, Jim McMahon, is using the idea of cooperation as ‘a way to frame the town’ and plans over the next five years to devolve services to the neighbourhood level with ward councillors becoming community advocates. He favours a mixed economy for services and says co-operation means the community will need to change as much as the council.
Rochdale Council is transferring its entire social housing stock to a mutual but leader Colin Lambert says the need for a co-operative structure for a service needs to be established. ‘Co-ops are not the answer to all our problems but part of the toolkit.’
So, as different models of what a co-operative council might look like emerge, what is the overall vision for the Co-operative Councils Network?
Anna Turley, co-ordinator of the network, is working towards the development of a quality mark for the network but says that councils will have different priorities and approaches to co-operation.
As the post-war welfare settlement is shaken up by cuts and an increasingly complex society, the timeless values of the co-operative movement offer a vision for the future for public services that are more localised and reponsive.
As Michael Stephenson, general-secretary of the Co-operatives Party, puts it, co-operatives are ‘an idea whose time has come back’.
THE GLUE TO INTEGRATE LOCAL AREAS
As the certainties of the past begin to disintegrate, the co-operative approach offers a means of retaining integration in local areas. Public sector cuts, the localism agenda and the government’s push for greater marketisation of public services are pushing councils into new territory. As one council officer at a recent New Start Think Time debate on the future of public services put it: ‘Before we followed the rule book, now we’re on our own trying to find the way forward.’
The Open Public Services white paper proposed a vision for the future of public services based on greater plurality of provision. But it offered no guidance on how that plurality might be achieved, and how local councils can ensure service outcomes in the face of greater marketisation and fragmentation. One delegate commented: ‘It’s profound marketisation with nothing holding it together at the centre.’
Place stewardship is in danger of fragmenting, with local councils – and their communities – left to ‘sink or swim’. The message to councils is ‘if are not imaginative enough to find the opportunities in the new agendas, that’s localism for you’.
Multiple visions of how local authorities will deal with the changes are emerging. ‘Commercial councils’ and ‘boardroom councils’ see them embracing the marketisation agenda, becoming hollowed-out dealers in contracts with a range of suppliers. Others – from the ‘collective council’ approach of Manchester to the ‘enabling’ or ‘co-ordinating’ approach, want to maintain a hands-on role in place stewardship.
Co-operative councils are emerging as one of the strongest visions for how Labour-run councils can continue to play a key role in the social and economic outcomes of their communities while also outsourcing many of their services. Its offers a different political stance for Labour councils, but will it offer a real alternative to those living and working in Labour-led communities?
Simon Parker, director of the New Local Government Network, is excited by its potential. ‘It’s about a new kind of partnership in which the line between the state and the community is blurred.’ While the Easyjet approach creates a distance between the community and the council, co-operative councils aim to bring the state and citizens closer together.
As councils divest themselves of their delivery role and the localist agenda rolls out, rather than taking a back seat, co-op councils could be at the forefront of a revival in local democracy, with distinctive local leaders playing a more active role in their communities.
Parker cites the mayor of Bogota who walks around his neighbourhoods in a Superman costume handing out red cards to those involved in gang-related or antisocial behaviour.
‘Leadership is not about services or spending money but about helping communities to do things differently. In the future leadership of place will become more important,’ he says.
While he says that it’s too early to say whether the co-operative council approach will become a distinctive model for local government, it is one of four broad types of authority he expects to see emerge by 2015 as set out in his recent report Future Councils, alongside commissioning, neo-traditional and pragmatic councils.
But while the mutualisation agenda has huge potential, Parker says it also presents serious challenges and is not an approach recommended for weaker services.
‘Once preferential treatment expires they might not be business-like enough to survive amid intense competition. Some will thrive – especially those that are bigger or form federations – but some will get bought out by private providers.’
John Goodman, head of policy at Co-ops UK, agrees. While excited about the co-operative approach planned by councils, he is keen to protect the co-operative brand and ensure that the word is not used to sugar the pill of cuts and job losses.
‘There are lots of fears around that changes in working terms and conditions and cuts to services will be done under the co-op label. We’re not the brand police but there is a historic value around the term co-op and anything that erodes that is not welcome.’
PROOF OF DELIVERY?
While the co-op councils inaugural conference was dominated by talk of the process of rethinking a council along co-operative lines, there was less talk about those at the receiving end of a co-operative approach. Councillors talk up the virtues of co-ops, but it won’t be them running them – that falls to employees and other local stakeholders. There has also been some criticism of co-operative councils imposing mutuals onto communities, and a top-down approach to co-operation appears to go against the bottom-up localist agenda.
Council leaders were keen to stress the process towards mutualisation is not an easy one – with the launch of a Mutual Business Detector from not for profit society Mutuo to help ease the way – and that not all services were right for mutualisation, but there was little questioning of the intrinsic value of a mutual approach to services.
The evidence for this however is scant. Proof of delivery, a report from the Association for Public Service Excellence (Apse), provides a systematic review of all of the available evidence of the benefits that mutuals and co-ops can bring to public service delivery.
Its conclusion is that the case for co-ops and mutuals is unproven. For while the orthodox view of co-ops and mutuals is that they are good, only half of those co-ops and mutuals it studied demonstrated a positive impact on staff and/or the local community, and only half showed a positive impact on accountability. Indeed, there is evidence of some downward impact on services and staff following mutualisation. Apse’s study found that the benefits of mutuals or co-ops on public service delivery came primarily through the process of forming such an organisation rather than through the outcomes themselves.
Those mutualised public services that have been successful have been so through getting precisely the right combination of conditions in place, the report says. The key three conditions for success were firstly, ensuring contracts awarded to co-ops and mutuals are for five years or longer. Secondly, there needs to be buy-in from staff and citizens for the mutualised approach and thirdly, support, advocacy and advice need to be available, particularly in the early years.
The evidence from countries like Italy and Spain, where public service co-ops are more mainstream, is that groups or federations of co-ops are more resilient than smaller ones, according to a recent Co-ops UK report, Time to get serious: international lessons for developing public service mutuals.
The conclusion of the Apse report is that while co-ops and mutuals have the potential to add value to public service delivery they are not appropriate to all forms of local public service provision. ‘This study no way endorses the myth of the “organisational fix” that the institutional design of mutuals and coops somehow leads automatically to improved outcomes. Local authorities may well be walking into a major reform without any evidence to support its effectiveness,’ it says.
John Goodman of Co-ops UK would add diversity of income to Apse’s priority list for successful co-ops. ‘Co-ops need a range of income sources, not just one public authority customer. Changes in policy and regulation and political control can lead to change and you need a business that can withstand shocks. All mutuals need to be assessed on a case by case basis using rigorous analysis rather than getting carried away with rhetoric.’
For at the end of the day, co-operatives are businesses and not all council activity can be successfully translated into a business model. Council officers and third sector representatives at New Start’s Think Time event raised concern about the loss of grants for civil society activity that cannot fit into the new outsourcing vision being put forward.
But while critics will argue over aspects of the co-operative council vision, there is little doubt that vision is needed. Those working at a local level are finding that the skills, expectations and leadership of the past no longer apply as they attempt to negotiate unprecedented change.
Transition won’t be easy – particularly at the speed at which it needs to occur – but with small steps and a unifying goal, local areas could turn the current challenges into an opportunity to transform their communities. Co-operative councils offer one vision for how cuts can be counter-balanced with a new type of local democracy. Now the hard work of turning that vision into reality begins.
