One of my strangest experiences since the election had been to see leading conservative politicians actively promoting the notion of workers’ buyouts of public services.
Perhaps it’s a sign of my age but I always associated this idea with the left rather than the right. However we live in an age where you can publish a book called Red Tory and not get chased out of the Westminster Village by a crowd of torch and pitchfork wielding purist ideologues.
In thinking about what I might do next I have been paying a lot of attention to public service trends and developments. And I’m getting excited about the idea of people coming together to own and operate their own businesses serving their current and new customers. Getting excited by anything in the public policy arena is quite an achievement after 22 years of public service.
But … And there’s always a ‘but’ isn’t there? It seems to me there are a few barriers to clamber over before we enter a workers’ paradise.
The biggest is the current mania for deficit reduction. Readers will know that it’s usually about now when I say this isn’t a political blog. Well it isn’t and I don’t think deficit reduction is an area of substantive political difference just now anyway. Any of the targets for public spending reduction being bandied about from all sides of politics are eye-watering. My point is that trying to be truly radical with public services now is rather like trying to do landscape gardening in a forest fire.
Pursuing mutual forms of ownership solely for cost cutting is going to lead to disappointment. Research evidence available through the Employee Ownership Association suggests that mutually owned businesses can, and often do, outperform conventionally owned enterprises on several measures. Employee satisfaction, customer satisfaction and profitability are just three areas where mutuals can have an edge. But I’ve not seen an example yet where cutting costs was the overwhelmingly driver behind setting up an employee owned business.
From my Cook’s tour around the subject it looks like becoming a successful employee owned business depends on getting three big things right.
- Having a current owner committed enough to the idea to support it financially.
- Having a workforce that is really up for it.
- Designing an ownership model that reflects the values that make your business different.
In the context of the deficit reduction the financial end of things seems trickiest just now. Even if these new mutual businesses were gifted to their employees – not sure how the Treasury might feel about that – they still need working capital. To get that lenders will presumably want some guarantees of the income the new business will have.
Will commissioners of services – like the new super lean Suffolk -be able or will want to give those sorts of guarantees? In a public spending environment that may well encourage panic rather than careful strategic thought. Besides which the Banks – even those we own – seem keener to get back to the good old days than they do on lending for a social purpose. Trebles all round.
Providing the finance for a raft of new public sector employee owned business in the midst of a CSR (where few prisoners are being taken) will require vision and leadership. And all in the middle of a public spending forest fire.
But I’m not downhearted. I think there are ways to make all this work. Not least because I think many public servants are up for this. Getting a greater say in how things work and being able to share in the fruits of success have got to be big plusses compared with our current situations.
But if finance is the big immediate problem getting the right ownership model may be the more intractable problem in the longer term. The sorts of behaviours that employee owned businesses thrive on feel very counter-cultural in my public service experience. Much of my professional life has been driven by top-down diktats. Untrammelled executive power and those who like wielding it are unlikely to enjoy having to be answerable to employees.
But equally folks who enjoy moaning will have to get off their backsides and participate. That’s going to be hard too. As will having to be answerable to your peers for your mistakes. In an employee owned business everyone is an owner. So a colleague’s performance is a legitimate issue not only for you to fret about but for you to pursue action on.
And while we’re pondering those issues let’s think about how good we are at the minute in being truly collaborative in how we work. Do we share knowledge effectively? Do we even have the systems that would enable us to do that and to really reap the benefits of co-production?
But again I am not downhearted here either. I think there are huge numbers of folks who would bloom in this new world who could transform their lives and the lives of the people and communities they serve. If, and it’s a big ‘if’, we respect what employee ownership and public service are really about.
Respect. Enough said.