MPs have published a report saying that the government's programme to create public service mutuals needs still stronger support and communication from central government if it is to build on its initial success. It also noted the government's hope that new public service mutuals will be created jointly with private sector partners.
The government is keen for these kinds of partnerships to develop because they bring in private capital to help set up, run and grow new public service business. Each of the "right to requests" from the NHS has cost the government tens of thousands of pounds to set up, so a strong private credit line is a tempting alternative to using public money.
Second, a private partner would bring commercial and practical help. Public sector spinouts tend to be led by passionate managers who can lack the experience to run a large enterprise, and who are expected on top of the day job to set up a new organisation from scratch. A private partner can provide all sorts of business start-up and growth knowhow.
And partnerships of this type would, potentially, expand the number and size of public service ventures. For all the hype, there are still only a small number of spun-out public sector businesses, and many employ fewer than 100 people. But the government wants to see a million public sector workers in mutuals by 2015, which means large organisations are going to have to be created at lightning speed. It is hoped the private sector can help achieve this.
But will the marriage between public manager and the private sector work?
One concern is the compatibility of each side's goals. So far, public sector mutuals tend to be more focused on social rather than commercial aims. Few appear to have share capital financially worth much to staff. They tend to be defined by a passion for people, place or profession, and they often aspire to stay local and be more personal. Every person I have met who leads a spun-out organisation is motivated by social purpose. They identify strongly with public sector values – albeit ones that see a mutual or social enterprise as the appropriate vehicle for this.
A private company, however, will, quite rightly, be mostly concerned with its shareholders' or directors' interests, and that will include a strong focus on growth, either by merger or acquisition and on cutting costs quickly.
These are legitimate goals, and, arguably, the only way to create large organisations. But you can see a potential tug-of-war here, with one side driven by a growth agenda and the other living in fear of becoming remote from its community – and of losing control to a private partner.
Can both sides meet at least somewhere in the middle, with private investors accepting the potential constraints on return introduced by being partly employee-owned and former public managers bowing to some of the commercial imperatives of investors?
As someone working every day alongside public managers, I hope we can find ways to bring necessary investment and expertise to the table. Unlike in continental Europe, this is unlikely to come from the state. So we need to examine closely how to do this while ensuring the values we hold close are upheld.