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John Lewis model for government

Mark Easton | 11:39 UK time, Wednesday, 17 November 2010

There is a long and hallowed tradition in the public sector for staff to complain that they could deliver services so much better if only those awful meddling managers would just let them get on with the job. Well, the government is now saying: "We believe you. Here are the keys. You drive."

Francis Maude


Ministerial zeal in looking to shrink the state and promote the Big Society has led them to consider a significant expansion of what might be called the John Lewis model for government business. Indeed, senior directors from the employee-owned department store have helped shape Whitehall thinking.

In a speech today, the minister in the Cabinet Office Francis Maude says he "plans to set public sector workers free, to let them take control of their organisations" with encouragement to set-up co-operatives or mutuals.

Echoing the right-to-buy model for council homes under Margaret Thatcher, state employees will be offered the "right-to-run" or the "right-to-provide" the services they currently deliver. Mr Maude believes that "employee ownership in public services has the potential to be transformative".

The government is determined to prove the cynics wrong, to demonstrate they are serious when they say they are giving up power and handing it to the people.

In this case, the recipients of people power will be public sector workers and, as a sign of commitment, Mr Maude says that Whitehall will lead by example with a new right "for civil servants directly employed by departments to form mutuals".

As the minister admits, this is "an incredibly complex area" and "the right would not be allowed to compromise the wider efficiency and policy objectives" of government.

It would be a mistake, though, if people shrugged and assumed the shift of control will never happen: Education Secretary Michael Gove is already looking at how staff co-operatives could run youth services in England; there are plans to let Sure Start centres "go mutual"; proposals that probation services and prisons be owned by the people who work in them. "This right will be as far reaching as possible," Mr Maude insists.

Ministers have been persuaded that co-operatives can reduce absenteeism, improve performance management, encourage innovation, and increase productivity.

"John Lewis's staff absence levels are half of the average in the retail sector. Staff turnover is lower when employees feel they can influence the way their organisation works, and productivity can be up to 19% higher in organisations where staff feel they have a stake in success."

All well and good, but there are a host of practical challenges alongside some critics' ideological concerns. The traditional hierarchical structure runs parallel to the conventional system of accountability with the Minister sitting at the top of the pile. When "ownership" of state services has been handed over to hundreds of co-operatives, it becomes less obvious where responsibility for the quality of those services will rest.

Although Mr Maude insists there has been a wave of interest in setting up mutuals, it is hard to imagine millions of public sector workers wanting to take on the extra responsibilities. What is in it for them? There will be the Rooney/Garland thrill of asking "Why don't we do the show right here?" and pride and satisfaction in delivering high quality and efficient services.

However, any co-op-style business plan must save money and the employees are unlikely to see any significant improvement in pay or conditions as a result. In fact, they may find themselves landed with a whole range of legal obligations and facing a maze of bureaucratic obstacles. Mr Maude already recognises that climbing into the driving seat will be a struggle.

"I want to reassure public sector workers that their legitimate desire to run their own services will not be frustrated by those who attempt to stand in their way. I understand that some public sector organisations may have legitimate operational reasons for needing to block or slow requests. But we will not tolerate bureaucratic attitudes and processes intended to demoralise the entrepreneurial employees who wish to pursue this path."

We shall see.

PS I notice that the Institute of Government, advisors to Westminster politicians and Whitehall civil servants, has sounded a note of warning on mutuals. Have a gander at former Downing Street insider Adrian Brown’s blog on the subject.


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