By Richard Johnstone | 2 September 2013
Ministers have been urged to adopt a new code of conduct governing public service mutuals to stop poor practice ‘tainting’ other firms in the sector.
Cooperatives UK, which represents mutual companies, said they were concerned that not enough of the government’s flagship staff-owned public sector mutuals offered employees a ‘genuine voice’ in running the new businesses.
Around 70 mutuals have been formed through the government’s Mutual Support Programme, Cooperatives UK said.
However, secretary general Ed Mayo warned the scheme could undermine the rest of the sector unless changes were made.
Although there have been examples of good practice when mutuals have been formed, Mayo highlighted issues such as the lack of a controlling stake for staff in some organisations as a concern.
Cooperatives UK has published a best practice guide with the Trades Union Congress after fears were raised that some mutualisations were ‘forced through’ against employees’ wishes.
Among the recommendations, staff should always have a majority stake in the new firms, Mayo told Public Finance.
In cases such as the mutualisation of pensions administrator MyCSP, the biggest single stake in the new outfi t was given to a private sector fi rm, while the employees accounted for only 25%.
Mayo said that, without giving a controlling stake to the benefi ciaries of the cooperative, the government was ‘out on a limb in terms of what it includes as mutual businesses’.
He added: ‘Cooperatives and mutuals are well recognised in society, and it’s our brand and our name being used by this government. We don’t want to be tainted with government getting this wrong, and we’re genuinely trying to contribute to getting this right.’Ministers have been urged to adopt a new code of conduct governing public service mutuals to stop poor practice ‘tainting’ other firms in the sector.
