Best practice guidelines issued on gaining employee support for mutuals

The TUC and Co-operatives UK have agreed a joint set of best practice guidelines aimed at ensuring that public service mutuals are based on employee support.

The TUC/Co-operatives UK publication is also intended to deliver genuine employee ownership and representation.

The guidelines, which can be viewed here, cover five areas:

• workforce engagement and consultation in the process;
• governance and democracy in the mutual;
• commissioning of services;
• safeguarding of public assets;
• employment standards.

The TUC and Co-operatives UK warned that mutuals should be subject to a ballot of employees and not be "forced through".

They said there had been some examples of good staff engagement among the 70 public service mutuals formed so far.

However, the two umbrella groups warned that not enough mutuals offered employees a genuine voice in the formation or the running of the new business.

They pointed to the formation of the civil service pension scheme manager MyCSP, where there was no ballot for staff on the transfer. “[It] operates without the genuine accountability that would make it a true mutual. Employees hold just 25% of shares in a trust, with 35% being held by the government and 40% owned by private investor Equiniti, led by former employees of outsourcing firms Serco and Capita.”

The TUC and Co-operatives UK also claimed that several spin-outs of mutuals across the NHS have proceeded without full support from staff.

TUC General Secretary Frances O'Grady said: “Increasing numbers of employees are leaving the public sector through the government's mutualisation programme, often against their will. The mutuals that are being formed often don't meet the democratic and open criteria of genuine co-operatives. In fact, many are simply privatised services under the cover of mutuals.

“These new entities will give controlling stakes to investors rather than workers and allow important public institutions to be taken over by large for-profit providers. We hope that this guidance ensures that where public service mutuals are created, they are done so with explicit employee support and genuine ownership and representation in any new organisation.”

Ed Mayo, Secretary General of Co-operatives UK, said: “I am a strong supporter of the mutual option for public services as a way to empower staff and engage service users. But it needs to be done well. You can't be genuinely employee owned if, in terms of culture and governance, there is no sense of employee ownership.

“There are international principles which safeguard the co-operative model, as a form of mutual. This guidance draws on these principles, and pioneering work with co-operative schools, to set out how to protect and promote the interests of employees and others who have a direct stake in the quality of our public services.”