The policy rumblings before the British general election include an emphasis on the “mutualization” of public services.

James Macintyre in the New Statesman on Labour’s ideas for changing how public services get provided:

bq. … strategists have settled on a big idea that might just help answer all three of those challenges – the idea of mutualism. Labour is focusing on the best-known modern example: the John Lewis model, in which every employee is a “partner” with a stake in the company. Applying this, Labour now believes public bodies can be part-owned by their staff and, where appropriate, their users.

Robert Peston, 15th of February on the BBC website under the headline “The John Lewis State”:http://www.bbc.co.uk/blogs/thereporters/robertpeston/2010/02/the_john_lewis_state.html :

bq. The Tory proposal for core public services to be owned and managed by “employee-owned” co-operatives contains a number of ideas rolled into one. The two most important are: 1) organisations perform better where staff have a direct financial stake in their success or failure; 2) the role of the state should be limited to providing funds and monitoring outcomes. This is not an example of Tory conversion to late 19th Century co-op socialism. Although the public-sector co-ops would be “not-for-profit” in the narrow sense of not being able to bring in outside capital that could receive dividends, staff would be able to get their mits on the “financial surplus” they generate. So the central idea is that primary schools or JobCentre Plus offices or community nursing teams would become much more productive if teachers, or job advisers or nurses knew that they would become richer from achieving more out of less.

Now I’m all in favour of mutuals, cooperatives, and so on (I wouldn’t have admired the late Colin Ward if I wasn’t), but this doesn’t sound like that. There seem to be two possibilities: either the mutuals have independent sources of funding or they don’t. If they don’t then the year that some happy band of teachers makes a profit by realizing “efficiency gains” is the year before the state cuts back its stipend, leaving them running around trying to repeat the trick with less the following year (and so on). If they do or can have independent sources of finance, then we also get progressive cutting back of state support whilst public sector employees run around chasing “opportunities”, devising ways of charging people for “premium” versions of the basic service, etc. And we can add into the mix the temptation that civil servants will have to write contracts for the mutuals that exercise massive control over the detail of what they do whilst leaving all the responsibility for failure with the co-op members. In fact, all of thus sound a lot less like a “John Lewis” state than a state modelled on the British university system. Good to know we’ll have a choice at the next election.