Whitehall slacking over council co-ops, say MPs

6 Dec 12
MPs have found a ‘surprising’ lack of progress in setting up mutuals and co-operatives in local government and called for more Whitehall support.
By Vivienne Russell | 6 December 2012

MPs have found a ‘surprising’ lack of progress in setting up mutuals and co-operatives in local government and called for more Whitehall support.

In a report published today, the Commons communities and local government select committee said the work of the Cabinet Office’s Mutual Support Programme remained ‘isolated’ from the Department for Communities and Local Government’s work on localism.

Committee chair Clive Betts said: ‘Failure to connect these two strands of policy activity betrays an absence of rigour, enthusiasm and understanding that is essential if the mutual model for local service delivery is ever to take off.’

The committee had found ‘far less change than might be expected’, he added. ‘This lack of progress was surprising given the benefits claimed for mutuals and co-operative structures.’ These included giving employees, and in many cases service users, a say in how organisations were run and how services were adapted to suit local needs. The end result was ‘greater customer satisfaction, innovation, lower production costs, higher productivity, increased resilience and job creation’, he said.

The committee recommended that central government and councils develop some ‘off the shelf’ models and guidance to help dispel confusion. There must also be efforts to inform and educate financial institutions about lending to mutuals and co-operatives. Reforms to procurement rules were also needed to allow mutuals to compete fairly for public service contracts against large companies and in-house providers.

Responding to the report, a Cabinet Office spokeswoman said there was ‘real enthusiasm’ for mutuals in local authorities.

‘A great deal is being done to support mutuals. Anyone can get advice from the Mutuals Information Service and we have a £10m fund to support fledgling mutuals with professional services,’ she added.

‘The DCLG and Cabinet Office are working together closely to support the creation of new employee-owned bodies – such as co-ops and mutuals – to run local services… We will look closely at how the committee’s recommendations can help us to take this agenda forward.’


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