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The John Lewis state

Robert Peston | 08:57 UK time, Monday, 15 February 2010

The Tory proposal for core public services to be owned and managed by "employee-owned" co-operatives contains a number of ideas rolled into one.

The two most important are:

1) organisations perform better where staff have a direct financial stake in their success or failure;

2) the role of the state should be limited to providing funds and monitoring outcomes.

This is not an example of Tory conversion to late 19th Century co-op socialism.

Although the public-sector co-ops would be "not-for-profit" in the narrow sense of not being able to bring in outside capital that could receive dividends, staff would be able to get their mits on the "financial surplus" they generate.

Most would say that a "financial surplus" is another name for profit. And outside firms with relevant skills that the co-ops need could be rewarded with a share of revenues.

So the central idea is that primary schools or JobCentre Plus offices or community nursing teams would become much more productive if teachers, or job advisers or nurses knew that they would become richer from achieving more out of less.

There are two ways of seeing all this.

The Conservatives see it as liberation from the stultifying control and bureaucracy of the state.

Their hunch is that many teachers and nurses would rather work for John Lewis - where a good year yields a de facto bonus for all - than for the faceless man in Whitehall.

Others will fear it is another nail in the coffin of a public-service ethos.

On the practicalities, I am slightly unclear about what would happen to one of these new co-ops that turned out to be lousy.

If a John Lewis style primary school were a floperoo, would all the teacher-shareholders be sacked, or only the head?

A resolution procedure for failing co-ops that didn't harm pupils - or patients of community nursing teams - would plainly be essential.

And what about the power structure within each co-op.

Would all co-op members have identical shares and equal votes on strategy and management?

Some headteachers, for example, would find such democracy profoundly uncomfortable.

Or would there be a boss or senior management team, who would have both management control and the potential to pocket the bulk of any financial gains?

The background to all of this - of course - is that revenues for public services will be under pressure for many years, as a result of the shocking state of the public finances.

For the looming general election, there are few more important debates than how public services can deliver more out of less.


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  • Comment number 1.

    So the idea is a co-op or mutual organisation.

    1. Will there be an explicit ban on carpetbaggers?

    2. What about the transfers of undertakings regulations? Will these organisation be permitted to play with the employee pension fund for example?

    3. What about the assets of the organisation that is mutualised - will they be able to flog them off for example? And if so who will get the profit or take the loss?

    Too many questions to analyse the merits of the idea.

  • Comment number 2.

    So - give the headteacher an incentive to sack staff so that the remaining staff can pocket the profit? Brilliant. Is it actually 1 April?

  • Comment number 3.


    Is floperoo the new mullered? I think we should be told.

  • Comment number 4.

    The point of origin for this proposal is a bit odd as the Tories would not appreciate this principle if it was applied in a privately owned business; although it does happen with sensisble proprietors.

    I see absolutely nothing wrong in a group of properly trained professionals running their own cooperative team in the public sector. Indeed it would improve the quality of service provision whilst lessening the cost because the so-called management elements would be within the team rather than in an external interfering and controlling bureaucracy.

    It is this latter element which has not only doomed projects initiated by the present government but also ensured the cost spiralled out of control.

    I cannot however see the argument for any surplus income be shared amongst the team. This will only serve to undermine the professionalism as cheaper sources of untrained employees would then be exploited. This has happened in similar private sector projects. I have a distinct recollection of a leading innovative manager holding his head in his hands and regretting turning his team leaders into exploitative entrepreneurs. He then went on to tweak the reward system so this did not happen in future. Yes, there needs to be an incentive but being able to run your own professional team should be sufficient.

  • Comment number 5.

    Mr Peston wrote:
    'The Tory proposal for core public services to be owned and managed by "employee-owned" co-operatives contains a number of ideas rolled into one'

    My wife's a teacher so this caught my eye.

    In any event I went to the Conservatives website and couldn't find any mention of it.

    Is there anyone out there that can post a link?

  • Comment number 6.

    The success of organisations like John Lewis is that they are free to set their own agendas and performance targets. If government really could relinquish control over such organisations then these proposals may work very well. However you have to recognise that not all organisations managed in the style of John Lewis are equally successful. The John Lewis model is not a guarranted panacea.

    The secret behind successful organisations is usually strong ruthless management, dedicated staff with the right skills and qualifications,a sense of urgency and the desire to continually improve.

    So who would find a home for all the duds currently employed by the government if you installed the John Lewis model?

    Solve one problem, create another.

  • Comment number 7.

    I think these are good questions Robert. I work with social entrepreneurs and am naturally enthusiastic about finding more socially entrepreneurial ways to deliver public services. But I do wonder about the seemingly dogmatic enthusiasm for particular business structures. Social enterprises aren't inherently better at delivering services. But they can be better - if they're good at what they do.

    I'm also not so sure that loads of public sector workers will be rushing to the door to set up as a co-op. Being responsible for your own business is great for many of us - but there are many others who'd rather not have that responsibility.

    Your question about what happens when a social enterprise which is delivering public services goes bust is an important one too. I suggest you have a look into the story of Secure - a social enterprise which delivered healthcare services in a prison. It went out of business - and the State stepped in (as it should do?) to save the jobs and protect the service. Are such bail-outs a good idea?

    And my final question is about whether the real agenda here is privatisation. Social enterprises are the (fairly) politically acceptable face of outsourcing of public services. But do they just prepare the ground for greater private sector involvement?

  • Comment number 8.

    A brilliant Tory plan to transfer the blame for cuts and job losses from the Government to the Worker's organisations. How easy for Central Government to cut spending if somebody else gets the blame. It seems odd that the Tories want to get elected to give power away.

  • Comment number 9.

    Re: Point 1 ("1) organisations perform better where staff have a direct financial stake in their success or failure;") = BIG BONUSES. And we have seen how big they can get. So Conservatives now show themselves as the party supporting big bonuses. Yet how can this be given how they keep accusing the government of mis-managing the bonuses in the banking sector. Or what do they actually mean 'cos it is getting really difficult to establish what they really think, what they see they can "score points with" and what are the rantings of a leader who holds his moral code and way of life as the model for the country (and to be pushed onto everybody).

    The "sound bite every day" policy is driving the voters away and sentencing us to another 5 years of Brown. That Cameron is so out of touch with public sentiment and is showing how little experience of business he (and "his team") have can only make one quite scared should they form the next government. And it is made worse that he keeps thrusting his failings down our throats.

  • Comment number 10.

    To answer one of the questions posed by Robert - in a genuine co-operative, which conforms to the principles of the International Co-operative Alliance, members of the co-operative generally have one vote irrespective of the size of their shareholding - ie one member one vote. An interesting feature of worker co-operatives is that whilst all members are workers, not all workers have to be members as membership must be voluntary.

  • Comment number 11.

    > On the practicalities...

    Mrs T never worried about "practicalities" when she sold the family silver. If things must be sold off, then we owners should make sure we get a very good price for our stuff, unlike the last round of fire-sale privatisations.

    After all, public sector workers already enjoy nice pension arrangements, and we don't want to further enrich them at our expense.

  • Comment number 12.

    You appeal to the success of John Lewis as a model but then raise questions about responsibility and power structure in a co-op school. Why would a 'John Lewis-style primary school' not benefit from a similar approach to these questions as that used by John Lewis? If there are reasons this success is not transferable to a school, you do not identify them.

  • Comment number 13.

    The aim of a private sector company is to benefit shareholders in the round.

    The aim of public sector organisations is to benefit, essentially, us - the customers.

    If a private sector company knows it can raise prices without adverse effect, (eg its customers can't/won't go elsewhere), it will do so. Indeed staff incentives, whilst working to encourage staff to be more efficient, do also encourage them to seek such opportunities to increase revenue - ie to take more money from the customers.

    Imagine that mentality in the public sector...........

  • Comment number 14.

    Only 2 months after the Government said this - someone's been copying their homework

  • Comment number 15.

    This looks like a good idea at first glance. However, as with so many things of this nature, it is all in the implementation. And do I trust Cameron to implement this with the required deftness and lightness of touch? I do not!!!

  • Comment number 16.

    One other critical practicality is, what will happen to pensions? Public sector workers are currently members of a state-funded final salary pension scheme. That scheme has the unique benefit of guaranteeing inflation-level increases.

    In addition the Transfer of Undertakings Regulations (TUPE) require transferred employees to carry their existing terms and conditions of employment to the new employer, how will that work?

    Four questions then arise:

    1. Will the state continue to provide access to a 'public sector' salary scheme for these newly-privatised workers?
    2. If employees transfer to these new private enterprises will they be considered as 'leavers' of their existing final salary scheme?
    3. Will the state provide any further pensions guarantees or insist upon the new employers providing equivalent public-sector pensions benefits?
    4. Will the TUPE transfer of benefits also include pensions?

    I am afraid these just sound like poorly-thought-through 'new ideas'.

  • Comment number 17.

    does anyone (in the tory party) talk to Nurses or Teachers. They do not enter the profession to maximise their monetary return, their satification comes from the joy educating children correctly and giving care to others. Yes they would want to, and deserve to earn more as a better reflection of what they do, but having more administrators looking for areas where not to spend money so that it can be sliced up amongst themselves is actually going to take away any remaining motivation these people, who are already run ragged, have left

  • Comment number 18.

    Great post Robert. Another great political idea that sounds wonderful in principle, but when you start to look at the detail you realise that it's never going to work in real life.

  • Comment number 19.

    The co-ops should be set up as companies limited by guarantee. This would entail the appointment of directors (thereby providing a management structure) and would bring the organisation within the scope of the Companies Act (requiring the publication of annual accounts in the prescribed format) and of the Insolvency Act (providing a legal mechanism for dealing with the situation if the organisation fails).

  • Comment number 20.

    Well I think you make of this what you want to. Does the service user come in and pay the practitioner out of his own pocket? A bit like primary health care before the NHS? Or does one want to imagine some sort of Nirvana where whole tiers of management disappear leaving practitioners to order their own affairs like real professionals?

    Pick your own scenario. I cannot help thinking that somewhere in this Tory vision lurk casualisation, outsourcing and all the other non-worker-friendly devices that can surely never be too far from their minds.

  • Comment number 21.

    Everyone who works in the public services is suffering from terminal change fatigue.
    The LHCCs (local health care co-ops) worked well before being replaced by the community healthcare partnerships which rapidly morphed into social work department-driven coercionships with a new managing tier imposed "to supervise and co-ordinate the partnership" .
    The co-op model works well if the savings generated are used not to pay huge amounts to staff but to pay for extra services and new facilities and allow new approaches to be tried.
    The problem is that once the co-ops are functioning well and independently they get bigger, lose their small-is- beautiful efficiency and the management gurus recommend merging and the power grab back to the centre resumes.
    So on the one hand it sounds like a great idea, on the other hand ,the public sector are fed up with re-organisations and the waste of money involved in making lots of people redundant, recruiting new people to do their jobs, and then making them redundant.
    Let's not re-invent the wheel, let's mend the potholes in the roads!
    And if it means a whole load of daft expensive logos ........

  • Comment number 22.

    It's a nice idea in theory, but recent sell-offs of the public sector demonstrate that in practice management would undervalue the 'business' and then sell it to themselves at a song. Cue big payoffs for the new directors and woeful delivery to the public.

    The ideological commitment to the idea that private is *always* good and public is *always* bad is likely to blind the Tories to the asset strippers that will circle like vultures if this is implemented.

  • Comment number 23.

    Would these new Co-Ops be allowed to bring in staff wholesale from outside of the EU via ICTs as is currently the case!
    What the UK worker wants is a LEVEL PLAYING FIELD.

    The UKBA are not currently checking the skills of NON-EU workers coming in via ICTS against the governments own SHORT SUPPLY SKILLS LIST. We (UK&EU) are not short of IT skills!!!!!

  • Comment number 24.

    This idea doesn't take into account those two great British characteristics namely, greed and laziness.

  • Comment number 25.

    As a solicitor specialising in support to social enterprises, this proposal is certainly very interesting to me, not least because there is a lot of commonality between SEs and the 'co-ops' proposed here. (For more information on social enterprises see, for example, the Social Enterprise Coalition's website.)

    Though the term does not seem to be used in today's news stories there are a lot of parallels with the 'Right to Request' currently available to employees of PCTs (Primary Care Trusts). I am working to support one 'R2R' at a reasonably advanced stage and have had initial conversations with several others. Briefly, R2R allows those working within PCTs to request that their PCT allows them to set up as a social enterprise. The answer may, of course, be 'yes' or 'no'.

    First of all, I believe that (done well) social enterprise and the co-op model outlined do genuinely offer a way of doing business that offers advantages over more 'traditional'organisations. The key is about combining sustainability and social or environmental purpose, and the 'co-operatives' talked of here would I think look fairly similar to social enterprises.

    However, I would like to see some of the issues dealt with that are proving to be barriers to the success of R2R in the healthcare sector. One example includes how pensions arrangements are dealt with (not just straight away but if one of these co-ops loses its initial contract and staff end up being "TUPE'd" to a new employer.

    My guess is that some of these proposals are coming forward because people think that it will save the country money in the long-term. Whilst understandable in the current econimic climate, there are of course no guarantees that this will be the case.

    I would like to see co-ops and social enterprise pursued because they offer benefits to employees and communities alike and not simply because it might save a bit of cash!

  • Comment number 26.


    Typical Tory lack of nous, if the previous experiment of selling off council properties is their best example of how not to enhance society then this is it.
    These ideas are OK if the incumbents in the first place are good at what they are doing, that is not to say that the successors will be as competent and subsequently fail.


  • Comment number 27.

    Agreed. The John Lewis or Cooperative model has its plus points.

    It should be remembered the other reason John Lewis is successful is it doesn't try and sell "everything" or "at any pricce". It knows its target market and aims to satisfy that market competitively.

    Public services could learn from this and stop trying to do everything to everyone. Government targets and regulation means funding needs to be found to cover every eventuality in the community, whether care, waste recycling, green energy projects, parking, social housing, schools etc etc.

    In some communitities, the need for everything may not be there, in others they may need more resource.
    The concept of Cooperatives could address this easily, providing the services needed locally, as and when required.

    In essence, the cost of providing public service could be reduced significantly by only employing people skilled for the task in hand and to remove unneccessary middle management tiers.

    Take a leaf out of some business models - a board (or managing director), line management and line service providers. That's all.

    Staff bloat, along with regulatory overheads, IT services, office premises, cars, pension and insurance costs cripple some enterprises and stifle innovation, let alone the massive cost overheads many Government funded bodies and local councils have managed to incur, all out of our taxes.

    Public services could move forward dynamically, cost effectively and above all flexibly, if allowed to operate in the ways proposed.

  • Comment number 28.

    While the removal of centrally controlled micro-management and nightmare of a minutae of targets are in themselves generally welcome I think more genuine value would be got from bringing back many of the outsourced, agency-fied and sub-contracted functions. The usual examples of hospital cleaners and janitors to change lightbulbs in public buildings are cited, but it is much deeper than this.

    In theory private companies can be more competitive and offer better value for money for many functions where an over-unionised and traditionally unmanageable workforce used to deliver very little real value but now that pendulum has swung the other way. Now tasks that are outside the agreed contract are ignored, response are assured to be at the far end of the permitted timescales and of the lowest possible quality and where the contractors are so large that there can be no effective competition and absolutely no new entrants into the market.

    Co-ops are a good idea, but first bring back the basic functions into direct PAYE control.

  • Comment number 29.

    The Tory proposal, announced today, for core public services to be owned and managed by "employee-owned" co-operatives is yet another ill thought-out proposal that is scary to say the least. While there are lots situations where we need new co-operatives – core public services is not one of them; and if it were to go ahead as described could do more damage to Co-operative and Mutual enterprise than anything that Tony Benn achieved.
    Co-operatives are a product of the market economy and are primarily established in an effort to correct an imbalance or failure in the marketplace. The purpose a Co-operative is market intervention in the interest of their members, typically in response to injustice or exploitation. Such intervention in the marketplace should result in benefits accruing to members, not all of which are necessarily quantifiable in financial terms. They cannot be used when no market, involving competition exists; co-operatives cannot be used to run monopolies.
    There is clearly a lot of scope for co-operatives to take over the of running a lot of services that are currently under the control of national and local government, but only when that service can be subjected to fair direct competition or when it is put out to tender. Postal services could be a possibility, because Royal Mail faces competition. Also, for example, rural service and consumer co-operatives could run much more of the Post Office network and, of course, co-operatives should have a much greater role within our education system.
    Co-operation cannot be allowed to become a masquerade for yet another scheme to cut back core public services and for selling-off publicly owned assets.

  • Comment number 30.

    Actually John Lewis is NOT a "cooperative owned by the workers". I don't think to Tories even in their present state of muddle over crime statistics and decimal points would use JLP as an example of a "workers
    cooperative". It's ethos is not maximising surplus for the workers though it does have a profit sharing arrangement, and the workers though multiple channels can influence management policy. And of course it does have a pretty large well paid management too.
    Worker co-op school, parent controlled schools etc. are likely to in real life to contract the management of their operations to companies like the one run by Chris Woodhead and his like... or if they are radical to a new Co-op Education Management company who can provide services including teachers more cheaply.
    Incidentally I can see nothing the current legislation to prevent governors of existing schools commissioning teaching services rather than employing teachers just as they do sports coaches, music specialists etc. After all that is what they do for supply teachers.

  • Comment number 31.

    There are already over 56,000 social enterprises in the UK delivering a whole range of public services from health to education. They are not profiteering people - but highly dedicated people who work long hours for low pay and no public sector pension. Truly inspiring people in general. They deliver dramatically better value. Some public sector workers would love this challenge, others will find the pressure too high, and the rewards too low. It will be a great test of how much we as a nation are willing to work hard to make Britain a better place to live in.

  • Comment number 32.

    The way to maximise a surplus is to provide customers with as little as possible for as much as possible. If making a surplus, whether as profit for shareholders or bonuses for staff, is the main motive, then customer satisfaction must also be a motive. To achieve this customers must have real choice. John Lewis staff concentrate on providing good service, because they know that if they do not customers will go to another high street store for their next purchase. The John Lewis model is just a particularly effective way of making sure that motivation spreads throughout the staff.

    This model is not appropriate for public services, because to provide real choice there must be plenty of slack in the system, that is under used resources. It is bad to give parents choice of schools unless all of them can get their first choice. Otherwise there will be justified resentment on the part of those who fail.

    This would be expensive and no treasury would allow it.

  • Comment number 33.

    Is this a way of reducing the Public Sector Pensions Deficit with the employees transferring to these Co-Ops how would this issue be overcome,I cannot see that many existing employees going for this.

    Each of the Co-Ops is still going to need Supervising and Administering potentially duplicating existing roles which are done centrally, isn't this solution supposed to save money?

  • Comment number 34.

    It's reasonable to be cautious or even sceptical about such ideas, and there are certainly some elephant traps in implementation. But at the early stages, it's probably best not to be too prescriptive about just how such social enterprises should be set up. The John Lewis model is great for a retailer, but might not be suitable for (say) a nursing service that needs little capital and whose success depends on quite different public service criteria.
    The challenge is to eliminate the inefficient centralised command structure of public services and to re-engage the enthusiasm and commitment of employees who are frustrated and angered by their treatment as mindless cogs in the machine.
    If all this goes ahead, there will probably be some disasters, but I hope also some big successes. The benefits will justify occasional embarrassing failures of some experiments along the way, so be sceptical but don't be as cynical as some of the respondents above!
    Gerry Lynch rightly asks about public sector pensions and TUPE, which could be big obstacles to any of these ventures. My memory is that TUPE does not apply to future service pension entitlement - but in any event, if public service employees are to be persuaded to switch to such ventures, the pension consequences will have to be made acceptable. That does not mean offering the same employment or pensions terms to future recruits to the ventures though....a useful potential benefit of the proposal.

  • Comment number 35.

    The problems with politicians is that any idea they have all ways cost the taxpayers a lot of money to implement and even more to put it back how it was. The p.a.y.e tax payment scheme was actually OK until the socialist decided to change it. ( because they thought a few divorced people may still be getting a couple of bob more with the married allowance than they were entitled to) We all know that great idea cost us all millions and I'm still not sure it's right.

    The Green issues are a con as well, a recent advert pointed out that the motor car is the biggest culprit where carbon emissions are concerned;'drive a few miles less' we are advised. By raising the driving age to twenty one (all that is needed is to change the law with a bit of tippex, cross out seventeen and put twenty one, you could take anything up to a million cars off the roads. Cut down road deaths, get young overweight kids back on bicycles to cut obesity and best of all it doesn't cost the tax payer a tanner.

    My last little moan about Britain is close the house of Lords, that would save the tax payers a fortune, I know it would be terrible to tell those old buffers they had to kip somewhere else, But come on, do we really need to pay out tax payers money for the most expensive doss house that there has ever been.

    Well that's my Monday morning rant ! In a nutshell keep politicians away from decision know it makes sense !

  • Comment number 36.

    I think employee owned public organisations is a great idea.

    Especially for revenue generating orgs - eg. train companies.

    John Lewis for instance looks after its staff much better than other retailers. Also interestingly the chief exec of John Lewis/Waitrose gets less than the comparative job in M&S etc

    One of the reasons that employee ownership is good is that the workforce are more engaged - and that doesn't cost anything.

    One of the reasons for problems in the public sector is the top down targets imposed by people who have never worked in a hospital/school/police force and have therefore driven the wrong behaviour.

    One thing we need to learn is that money is not the only thing that motivates people - having a say in the direction of your workplace can be a real motivator.

    When Northern Rock etc is denationalised I hope it is employee owned. Banks that were employee owned would definitely take less risk.

    Maybe John Lewis could bid for NR?!

  • Comment number 37.

    The idea that equity-bearing management teams perform better than other kinds has a lot of grounding in the amazingly high returns achieved by Private Equity backed firms, often that have gone through a management buy-out (or buy-in).

    However, the historical data is highly skewed by other factors, principally that the above-market returns made by Private Equity are in large part due to the effects of leverage (high levels of cheap debt).

    Aside from my political views and the incongruity of the Tories new-found longstanding support of the co-operative movement - icon of left-leaning liberal circles since the 19th century - I worry that their economic and intellectual case for these proposals is actually based on quite erroneous misinterpretation of statistical data - management owned firms appeared more successful than listed/state owned firms, but not because of the actions of management or the better fundamental nature of those firms...

    Bain & Co says "Prior to the downturn, leverage, expanding PE multiples & GDP growth accounted for nearly all private equity returns."

  • Comment number 38.

    I fear it is a way of government shedding responsibility. Start off with reasonable grant funding then either reduce the grant or increase the responsibilities and say piously - but x was contracted to supply this service. Look at the way Councils pay less for their residents in elderly care homes often pay less than those residents who pay their own fees.
    I fear it is also a way of getting rid of pension responsibilities and 'inconvenient' conditions of service like sick pay, job hours etc

  • Comment number 39.

    I work for John Lewis and am sick of hearing how well they are doing, I have yet to read in the business pages about the 700+ redundancies that are happening this year. If we are all co-owners in the business and treated equally, who decides to make me redundant, it wasn't me, no-one asked me what I thought or who I thought should go! Please give as much news space to the negative side of John Lewis as well as the positive please.

  • Comment number 40.

    It simply wouldn't work.

    Just try it and see. It will cost a lot of money, then people will complain about standards or buildings or something and the whole thing will fail.

    John Lewis Partnership was set up long enough ago to have evolved processes to enable it to work. The Centre for Tomorrow's Company at the RSA has tried to ape the principles of the inclusive company but not many companies actually do it.

    The Joint Stock Companies Act of 1862 was set up precisely so that the company of people were the main beneficiaries rather than what now prevails, the shareholders, being dominant. A company is a group of people, hence its name.

    As to schooling, democracy is an anathema to a head led school. Many parents become school governors whilst their children are at the school. I did myself. And the input of parents on the board of governors is vital.

    In principle the John Lewis formula is excellent. In practice, it falters more often than not.

  • Comment number 41.

    This sounds like a good idea at first. But Robert highlights some important constraints - if a school fails, we'll need to have enough spare capacity waiting in the wings to suddenly move all the pupils in.

    This raises a scary and depressing question: What if there is simply no way to provide a universal service at a cost-effective and profitable price? Some clues here:

  • Comment number 42.

    "So the central idea is that primary schools or JobCentre Plus offices or community nursing teams would become much more productive if teachers, or job advisers or nurses knew that they would become richer from achieving more out of less."

    Robert I'm afraid I disagree with your analysis!

    You are showing that you believe that the only thing that motivates people is money. THIS IS NOT TRUE!

    Of course we all need food on the table but we are motivated by many different things (not just money) and all research shows this. There are many people eg. academics, some politicians and maybe some journalists?! and certainly many charity/aid workers who could earn more in other roles!

    Of course we all need food on the table but

    Intrisic motivation is often greater than extrinsic motivation!

    I agree though that our political masters do seem to believe that money is the only motivation for people with their free market ideology.

    Co-operatives are good as they give everyone a stake in the organisation for it to become better and their ideas for improvement to be taken on board - not because they make everyone rich!

  • Comment number 43.

    5. At 09:44am on 15 Feb 2010, Dempster wrote:
    "My wife's a teacher so this caught my eye.

    In any event I went to the Conservatives website and couldn't find any mention of it.

    Is there anyone out there that can post a link?"

    Hi Dempster

    This idea has been dreamed up by a think-tank called ResPublica run by a so-called 'Red-Tory' - Phillip Blond

    The report the wrote on it called 'The Ownership state' can be accessed through their website. They have commented on the news story today see link below...

  • Comment number 44.

    This has to be the daftest idea yet to come out of Tory Central Office, even though it originated in Labour HQ.
    If profits made by a Public Service were to be shared out amongst its employees it would mean that once again
    we, the Public, would be fundng yet another gravy train. Public service employees do not own the service that they work for - we, the taxpayers own that service and if it makes any profit it should be shared out amongst all of us.

  • Comment number 45.

    Rumours of my demise have been vastly exaggerated.

    I had to get away from the pointless and baseless arguments of the bankers and their friends. You cannot argue with an ingrate totally devoid of concience.
    However I have been watching and it would appear we're still in recession (unless you believe that 0.1 twaddle) - or is it now worse because the markets have finally discovered where all that banking debt ended up! (those market participants must all be Geniuses with a less than 20 year memory)

    Good to see the Tories are trying to implement 'Tory Socialism' - except co-operatives within a Capitalist state are certainly not.

    One flaw to this plan is what are you going to do when the 'co-opers' realise that maximum efficiency = maximum take home pay?

    I'm sure you won't mind your surgeon rushing through your operation because if he can complete 4 in a day then he's earnt an extra 20%.

    ....or maybe the train driver who does a 'few SPADs' because arriving on time contributes to his bonus.

    I mean this incentivising worked wonderfully for bankers - so why wouldn't it work just as well for public sector staff?

    The debate how such an organisation would work has not even begun yet and already Peston is complaining about 'what if A does more than B' and debates about who should get paid more as a result - and who measures it, and how you can measure different skill sets.

    The problem is the inbred Capitalist in Robert ensures that his first questions are about the fairness of wages - and not the fairness and improvement of the service being provided.

    Although this scheme does reduce the exploitation of one man over another - if any of these 'co-ops' have to go up against a Capitalist business - let's say a competing health care provider - then they will lose as self exploitation can never go as far as exploitation of another (and as that's the source of profit don't you know).

    It seems that perhaps even the Great Robert Peston is beginning to think about "source of profit"

    "Most would say that a "financial surplus" is another name for profit."

    ...close Robert, very close, now try replacing 'labour' for 'financial' and you and I are finally on the same page.

    Maybe if the Tories worked on a way of incentivising which did not involve placing one person above another in society then they would have solved this puzzle.

    ...the problem is if you don't think like a bear, you cannot act like a bear and most Tories have never done a thing in their life unless there was a gold bar at the end of it (or at least the promise of one).

    Roll on May 6th when we will know if we are fighting our enemy, or our enemies enemy (and no, he is not my brother)

    P.s Dempster - good to see you and others keeping the fight up for sense over pretense - you will not be forgotten when the walls come tumbling down...

  • Comment number 46.

    It's an interesting idea but like a lot that comes out of Cameron's mouth you wonder if he has really thought it through (e.g. Married tax allowance at a time of a recored deficits). A not for profit company implies autonomy to set salary and bonus levels -otherwise wouldn't they just become a quango? Therefore the tories are unlikely to put restrictions in place in these areas are they? If they did would anyone want to do this?
    I am sure that many teachers would want to work for a company who offers good rewards like John Lewis who is free in the market place to sell what they like. I can't see the same sort of freedom for a school though who is unable to say -lets not teach primary kids there is no 'financial surplus' here we want to become a medical centre say. i.e. they would be operating in a controlled market not a free one. The scope for similar terms and conditions to John Lewis staff are therefore limited somewhat.
    A final thought -this all sounds fine in opposition but when they have won the election and are ministers and will be held to account by the electorate for the standards of these cooperatives I suspect they will be quietly nationalised -in the best interests of standards of course!!!

  • Comment number 47.

    I think that this is a good idea worthy of further development. The present set-up doesn't work well and we can't go on like this.
    Freeing people to take more responsibility for the sucess of their enterprises whether public or privately owned. I should have thought that the BBC is a good place to start!

  • Comment number 48.

    Hey ho, another idea that sounds great but: What do you do with a cooperative that does not meet its government targets? No good sacking the boss as its a cooperative and the boss would have limited powers to change things without members approval. No good getting rid of the cooperative and replacing it with another as TUPE regulations mean the existing staff would have to be transferred to the new cooperative. Back to square one?
    Of course the government would also keep an army of well paid employees to monitor targets (just as happend with the compulsary tendering bill of the late eighties) the cost coming out of the total budget thus leaving less money to be spent at the sharp end. Less money to spend = employees pay and conditions sqeezed resulting in low moral and less effective workforce.

  • Comment number 49.

    Where are the limits?
    Will the police become co-ops? The community officers, parole officers, the CPS? Just think of those mits...
    Who sets the performance standards and will they be consistent across the country? Will there be performance-related bonuses for the performance co-op? We couldn't allow that. Profits are not the only factor in performance and we actively avoid such situations for a very good reason.
    The fact that we wouldn't dream of allowing the police to operate in a market means there are problems with markets, doesn't it?
    Or to point it out another way, would the staff have more to get their mits on if they work at a school with a low requirement for free school meals, better housing and richer parents? And it's take 20 years for anyone to sort out...
    The word co-op sounds nice and cuddly, collecting reward stamps at the school gates as you collect the kids who've been busy collecting gold stars as rewards all day. But it isn't. Not all of the John Lewis staff have a profit share. And remember the prices on the MPs John Lewis list - the preserve of the well-off at those prices. What is the chances Joe public will have such quality? The John Lewis in our shopping centre isn't that well stocked; will co-op services be as sparse?
    And when the refuse collection co-op has failed, just how will your community cope as you wait on the next co-op expansion through leverage and moves in?
    We can't afford the massive costs a change over would bring, and we can't afford the rescue at a later date.
    It's got the Tories, market forces and profit motives stamped all over it in giant lettering, one co-op competing with another on cost all the way down to the levels of poor hospital cleaning services - the disguise is pathetically poor.
    Privatisation in disguise as so many comments have pointed out. This isn't about giving joe public a better service, it is about extracting profit from that service; taking money from the public and handing it over the wealthy, while joe has a poorer service at the end of the day.
    There is a reason why services such as education were brought into the public sector. History tells us that. There are already serious problems with some of the trust schools that have appeared.
    Once a service has been taken out of local authority and/or government control, it won't be coming back.

  • Comment number 50.

    No.3838. studentforever wrote:
    "I fear it is a way of government shedding responsibility."

    Government does that anyway - that's what Local Government was originally about: implementing required legislation at the local level. And both can farm stuff out to yet other agencies as long as these agencies can meet statutory requirements. Suitable checks are usually in place.

    Point is, this is basically a good idea with limited application. I've seen (advised, even) groups of mums setting up co-operative creches. Some have done a little sideline business re children's clothes, toys, etc. Some have gone on to become successful nurseries, some gave up.

    The real incentive is local control. If people know they have a worthwhile role in a process, can make decisions (and live and die by them, so to speak) they achieve greater fulfillment along with the benefits that brings. They are more likely to have pride in what they do. Internal bureaucracy will be at a minimum (because bureaucracy is usually about formal procedures and backside covering).

    So don't let's chuck out the idea. Just be sure that the application is workable. Some applications would work miles better and be far more advantageous to local communities: local planning permission for example. Keep central government out of it altogether.

    And frankly the less responsibility I have to invest in our governments no matter what colour the politics, the happier I am.

    What I'd also like to see is far more accountability of local government or these co-ops to the local taxpayer.

  • Comment number 51.

    There's a massive problem at the heart of this idea - the organisation gets a budget, then the less they spend on service delivery the more surplus they can personally take home.... how does this improve the quality of the service?

    Then in the second year the government looks at how much they spent in year 1, and reduces their budget to that level. Then what? No room for surplus without cutting costs even more... so a poorer quality service and smaller bonuses!

    I can see how this superficially looks like a good idea - but has it been thought up by the same teenage researcher who misplaced the decimal point? It simply has no chance of working in real life.

  • Comment number 52.


    Can't say I agree with that but even looking beyond the initial point there isn't a teacher or a nurse out there who wouldn't have something to say about management practices and who wouldn't seek a pay rise.

    The cooperative principle suggested is an interesting idea, or rather as others have stated, a repackaging. It would be fascinating to see this in practice in the public sector and in principle it seems right- but the devil is in the detail, of which there is none.

    Two immediate problems spring to mind.

    1. Who sets the performance parameters? John Lewis sales are easy to quantify, a 'good' education much less so. Paying teachers and/or nurses 'performance related bonuses' (dividends if applied) for mediocrity would be a disaster for the public purse as well as for service.

    2. This would surely have a direct impact on employment numbers, particularly if employees have more incentive to not employ/replace others. Would this not increase the income gap and exacerbate the divide between rich and poor?

    I'm not really sure what 'problem' this policy is attempting to fix. Is the inference that public sector employees don't work hard enough?! Or is it that we're stuck paying for average results and want that to change via the backdoor. I like the concept but if implemented wholesale in practice it might fail/be unworkable.

    It might work in relation to specific public service functions however- for example planning.

  • Comment number 53.

    Do these people not realise that at least half the emasculation of the state has been due to the rapid increase of other third parties in public service, we complain about this service or that which the "Govt. fails" to provide to our standards, but it is because they do not control the service, we then get complaints about how the audit culture of Govt. is going to far and is too costly well that is because we have privatised and contracted out so much of the public services that the state is in effect a contract management company, whose only lever is monitoring, target setting, and power not to renew a contract.

    This plan is clearly another attempt to privatise off public resources, either in terms of people or assets, no doubt the tax payer will get a shocking deal with only costs not profits from the investment we have made, and in the longer term another bunch of individuals will make a killing at the expense of the rest in society who paid for them to have the opportunity in the first place. Conservatives in favour of co-operatives, I think only as a vehicle for future privatisation and to further weaken the states ability to row or steer policy in the UK, in favour of market forces.

  • Comment number 54.

    If this country had as many main battle tanks as it does think tanks we would be a force to be reckoned all these ideas there seems a semblance of truth in it, but as always the reality will be far removed from what is envisaged...

    Its insulting to tar everyone with the same brush, not everyone is motivated by money and greed,just a fair days pay for a fair days work...

  • Comment number 55.

    Two points:

    1. If the Tories think this is a good idea for public provision, why not also encourage it for private provision?

    2. Public services must also have client/customer/patient input, not just that of employees.

  • Comment number 56.

    I do worry about David Cameron when the Conservatives come up with ideas like this.

    The whole problem in society is that governments gear things so that they cost more.

    They also seem to have forgotten the problem relating to the bonus system as it it flourishes in the banks.

    Governments also have a habit of having ill-thought out policies which cost millions to implement only to have millions spent on them to put things right when an unseen adverse consequence occurs.

    For example if Gordon Brown had not started taxing pension funds we would not be in the dire mess we are in.

    Giving workers a bonus seems to rob them of the common sense to see what they are doing might be undermining the economy.It certainly worked that way for their bosses.

    What we could do with are some integrated, cohesive, well thought through policies which all pull in the same direction to get us out of the financial mess we are in.

    This one has too many flaws in it.

  • Comment number 57.

    43. At 12:07pm on 15 Feb 2010, danj180 wrote:
    'This idea has been dreamed up by a think-tank called ResPublica run by a so-called 'Red-Tory' - Phillip Blond'
    'The report the wrote on it called 'The Ownership state' can be accessed through their website'

    Thank you danj180.

    ‘The Ownership State’ eh?

    Dear God whatever next.

    It should have been named: The Ownership of the State

    And when the transformation has been duly completed, I wonder who the ‘owners’ will be.

    Bearing in mind the components of the ‘State’ will be sold off of course. And those purchasing them, will likely require ‘big’ finance.

    The people of this country have been systematically disenfranchised of so much over so little time. The Tories started it, and Labour have carried on with it, now the Tories want another go.

    If Cameron doesn’t nip this in the bud, Mandelson will have a field day with it.

  • Comment number 58.

    21. At 10:38am on 15 Feb 2010, onward-ho wrote:
    'Everyone who works in the public services is suffering from terminal change fatigue'

    Agreed, my wife being one (she's a teacher).

  • Comment number 59.

    I hope the comment about people working better when they have financial involvement was said tongue in cheek. Haven't we witnessed the real effect of that over the last 18months of financial meltdown? People work better when they 1) believe taht their actions have an effect, 2) believe that they are valued by the organisation, and 3) can assocaite with the organisations ethos, values and goals. With financial involvement, they get greedy and smug when things are going well and panic or get depressed when they are not.

  • Comment number 60.

    55. At 1:01pm on 15 Feb 2010, diarmidwp wrote:

    "1. If the Tories think this is a good idea for public provision, why not also encourage it for private provision?"'s a very clever scam - I mean you create co-operatives which will eventually pay a 'fair wage' to it's employees - then the private enterprises doing the same work will be able to do the same job for a lot less - as they will pay their workers less (all other things remaining the same) - the army of unemployed wil ensure that some people are forced to work outside of a co-operative for less.

    Then all the Tories have to do is point at their scheme and say "oh look, it seems the private sector is more efficient that the public one - even in a co-operative system.

    ....and then it's SELL, SELL, SELL all the public provision into private hands. (which co-incidently are their 'friends' hands)

    Then it's all off to Monaco for a big yacht party paid for the public who are being squeezed to extiction through state created private monopolies and cartels (like the phone / gas / electric / water suppliers)

    I wouldn't trust George Osborne to run the school dinner till - do you know why the city like him? - it's because he doesn't have a clue what he's talking about.....and the city like a man they can fool with their sorcerers ways.

  • Comment number 61.

    Ah WOTW, you're back! Have a good holiday?

  • Comment number 62.

    59. At 2:04pm on 15 Feb 2010, aadwork wrote:

    1) believe taht their actions have an effect
    2) believe that they are valued by the organisation
    3) can assocaite with the organisations ethos

    ....ah you mean one of those jobs which has a real purpose - well they are hard to find these days.

    It seems some people (in fact a lot of them) are happy to do pointless and useless activities for wages which cannot logicaly have any long term value.
    I mean if people are paid for doing useful work, and others are paid just as much (if not more) for doing pointless work - then where does this leave 'the value of wages'?

    ....that would be in the bin, and how do you cover this decline in wages? - "MAN THE PRINTING PRESSES!" - that way we can all get richer whilst producing less and less.

    Economics for Governments.

    Surely there is no consequence to this????

  • Comment number 63.

    We already have the answer to our political problems and, as is so often the case, we got it from Yes Minister years ago.

  • Comment number 64.

    The root cause of public service inefficiency is, I believe, quite simple. In public services, and a lot of other places, the more people that work for you and the more costs you have, the bigger and more prestigious your job.

    Change that, and the ways of thinking that go with it, and you can reduce costs without reducing the level of service delivered.

    Will these ideas achieve that? I’ve no idea.

  • Comment number 65.

    This is a fantastic idea, public workers getting the bonus's for their good work instead of some suit in London. The exact yay of working it will have to be sorted out in practice but it looks good.

  • Comment number 66.

    As most people have noted already...

    This is just more tory privatisation by the back door.
    Although the idea of local people being in charge of their local services and budget allocation sounds great, it was the tory party of the 80s that took most of it away! Our local council enters 'Britain in Bloom' every year despite the fact that most of the town is in desperate need of being cleaned- not decorated with flower baskets.
    Because it is allowed to allocate spare parts of several areas of the budget to do that, but can't allocate it to extra street cleaners- and if it doesn't spend the money in a given year it will not have it the next. Sheer insanity.

    Sorting this out doesn't need the potential nightmare of devolved co-ops competing with each other for further lowest common denominator at the cheapest price! It just needs what is missing from so many institutions and companies- giving the front line staff proper training and authority then trusting them to do their jobs without targets, hoops and jobsworths with clipboards!

  • Comment number 67.

    60. At 2:08pm on 15 Feb 2010, writingsonthewall wrote:
    I wouldn't trust George Osborne to run the school dinner till - do you know why the city like him? - it's because he doesn't have a clue what he's talking about.....and the city like a man they can fool with their sorcerers ways.

    Just maybe you are wrong here.
    Maybe he isn't so dumb and knows exactly how to keep his chums chummy whilst ensuring a successful, post-political career with lots of subsequently privatised entities and and board-sitting opportunities that will arise...
    I'm not sure Mr Osborne has the necessary skills employers demanded for a till-job these days? Previous till experience is required if you want to make the interview. It's really competitive out there these days. It's all fancy computers and darned decimal points!

  • Comment number 68.

    As someone who managed such a not for profit company for many years with a Board of Directors who gave their time at no cost this is the most exciting proposal I have seen from any government since 'Right to Buy'.

    Instead of surpluses going out to unknown shareholders they are kept within the company and can be used to expand services or create new jobs.

    They are run as a normal company would be with management providing financial information and statistics each month to a Board of Directors so their progress is constantly monitored.

    John of Hendon asked about the assets. The assets would be owned or leased by the company and belong to the company. As these companies would be funded by the taxpayer they would be returned to the taxpayer should the company be liquidated.

    Directors can be drawn form all walks of life on a voluntary basis with experience in banking accountancy and any relevant field in which they have experience.

    There are many retirees who would gladly participate in such a venture drawing only a small fee and expenses.

    This is not something to be afraid of but should be welcomed as long overdue.

  • Comment number 69.

    I remember making the suggestion of a John Lewis style partnership scheme for the Royal Mail several months back, possibly on this blog. Could it be that the Conservative think tank was buying a tin of good quality home brand beans, came home and read my blog, then had a eureka moment that was inspired by the aforementioned baked beans?

    This is a good discussion to have.

    Some organisations would indeed benefit from becoming a society, others would not. The Royal Mail is a classic example where it could be made a success. There will be so many motivated people who could transform Royal Mail into a first class organisation, and most of those people will be humble workers who haven't exec-post hopped from failure to failure.

  • Comment number 70.

    Coops mean the lower paid workers who have a vested interest and are users eg NHS would work to make it work. Worth a try. At £10k per MP to administer expenses it cant do anything economically.Privatisation is the same people and attitudes as before with lower paid workers getting squeezed. THe NHS is a rambling mess and rail travel shocking.The Army have Helo's too expensive to fly and some that cant fly cos they didnt buy the software. Not sure anything done before has worked too well.

  • Comment number 71.

    68. At 2:49pm on 15 Feb 2010, virtualsilverlady wrote:
    As someone who managed such a not for profit company for many years with a Board of Directors who gave their time at no cost this is the most exciting proposal I have seen from any government since 'Right to Buy'.

    Boards of directors sat on the banks, so does that mean our banks would have been better run if the directors etc were paid volunteers then?
    It's privatisation dressed up in disguise. Privatised social workers, teachers, traffic systems, refuse collection, street lighting, road repairs, health services, colleges etc.

  • Comment number 72.

    Every article I read leads me back to the same thing.

    Too much debt was created. The amount was above and beyond that which could be re-paid.

    Who created this debt? Our old friends the banks, those very institutions that individuals, companies, and now nations are beholden to.

    They created too much debt, far too much debt and they created it to enrich themselves.

    We now discuss selling off our schools, our hospitals and God knows whatever else to satisfy them.

    Let's face it we are now considering privatising the health service when we should be nationalising the damn banking system.

    The health service works, the banking system doesn't.
    You don't dismantle what works to satisfy what doesn't.

  • Comment number 73.

    61. At 2:18pm on 15 Feb 2010, the_fatcat wrote:

    "Ah WOTW, you're back! Have a good holiday?"

    No time for holiday - I have been in preparation for the future. Some monkeys might be believing the endless lies peddled by incompetent experts - simply because the alternative reality is too brutal to face up to - however this is not a good long term plan and will damage the psyche of the individual as a crushing dose of reality is more painful than a gradual acceptance.

  • Comment number 74.

    67. At 2:41pm on 15 Feb 2010, copperDolomite wrote:

    "Just maybe you are wrong here.
    Maybe he isn't so dumb and knows exactly how to keep his chums chummy whilst ensuring a successful, post-political career with lots of subsequently privatised entities and and board-sitting opportunities that will arise..."

    Ah but the fact that both you and I know this is his plan means that acting the fool will not be successful - even though Georgey Porgey does do a fine job in this roll (and no - it's no spelling mistake, it's probably a Bacon one)

    The more policies the Tories come out with the more difficult they make it for the public to elect them. This could be the first election ever where it can be won by the party 'who says the least' during the run up - how bizarre!

    I can't wait for election time - my voting booth will be the one with smoke coming out of it.

    There may have been sacrifices made to bring us the vote, but if those emancipators could see what our options are they would do the same.

  • Comment number 75.

    68. At 2:49pm on 15 Feb 2010, virtualsilverlady wrote:

    "As someone who managed such a not for profit company for many years with a Board of Directors who gave their time at no cost this is the most exciting proposal I have seen from any government since 'Right to Buy'."

    Yes, if these not for profit companies weren't in a 'totally run for profit' market - otherwise they will simply fail.

    I don't think comparing it to 'right to buy' is a good idea either - I mean that was certainly the catalyst for mass home ownership, inflated prices and a credit bulge of epic proportions as the people tried to keep up with the bubble.

    Beware of the sheep in Tory clothing - it's not what it appears.....

  • Comment number 76.

    A bad idea.

    Even Co Ops need to make a Profit, so services suffer to make room for a profit.

    Certain things are best done by the State, or are we going to have Private Armies next ?

  • Comment number 77.

    I think people can rest assured that it will be so called Management Graduates (like those who screwed up the Banks), who would take all the Directors positions and all the other Workers would be on minimum wage or sacked.

  • Comment number 78.

    When the incentive is money it bleaches out all other values. Money is a massive black hole that sucks out everything but is meaningless as a human value. Cameron has learnt nothing from the on going financial / Banking crisis.

    Some way has to be found to replace the concept of money with human value. As Ive said before the Spartans tried it by banishing gold and silver.

  • Comment number 79.

    69 copperDolomite

    We aren't even talking about major private shareholder run companies so I find your comment totally irrelevant to the subject.

    If public services were being run so well and cost effectively there would be no need for change.

    This is as far from privatisation as you can get.

    Providing localised services employing local people who can make a huge difference if let loose from Whitehall interference can transform the quality and cost of services in their own area.

    The alternative is forever rising costs of council and income taxes.

    Are you in favour of that?

  • Comment number 80.

    Sounds like the banking bonus system.....we all know how well that has worked..for them not anybody else.
    When all else fails...reorganize...

  • Comment number 81.

    Another Tory Soundbite. I'll leave it to Shakespeare to summarise:
    "...a tale Told by an idiot, full of sound and fury, Signifying nothing."
    A few issues spring immediately to mind which more than adequately underline the true nature of this proposal.
    Robert Peston's question about the consequences of "failure" is interesting. Would the LEA (should any then exist) or Central Government move in to pick up the pieces?
    Most importantly though, one has to ask how, when taken with the other Tory proposals for various 'Community-based' schools, such a system of "de-centralisation" might work.

    It's all very well to propose that the 'dead hand' (&c.) of 'local bureaucracy' is removed. This however implicitly replaces it with the (preumably) more livid hand(s) of a Centralised bureaucracy. Or are funds to be distributed on some unsystematic and unstructured basis? What will the National Audit Office think of that?
    One cannot but feel that he who pays the piper calls the tune, and in this instance it will have to be some Quango (or "independent" funding body a la HEFC) Instead of locally accountable politicians being notionally accountable, Whitehall bureaucrats get the gig.......

  • Comment number 82.

    "35. At 11:40am on 15 Feb 2010, AudenGrey wrote:

    The Green issues are a con as well, a recent advert pointed out that the motor car is the biggest culprit where carbon emissions are concerned;'drive a few miles less' we are advised. By raising the driving age to twenty one (all that is needed is to change the law with a bit of tippex, cross out seventeen and put twenty one, you could take anything up to a million cars off the roads. Cut down road deaths, get young overweight kids back on bicycles to cut obesity and best of all it doesn't cost the tax payer a tanner."

    I live in central kent, the cheapest return bus ticket costs nearly £6!

    My 17year old now drives to school, in his 48mpg car, even with all the additional devaluation due to him driving it, i am saving £25 a week over what we were paying in bus fairs before he passed his test. thats £100 a month or £700 for the school year.

  • Comment number 83.

    Enough of this blue party nonsense.
    What we should be discussing is UKFI.

    State within a state or what?
    And totally unaccountable.

    The UKFI is allowing banks to get away with anything the banks like.
    Who is pulling what strings?

    The banks get bailed out and simply carry on in the way they had become accustomed to.
    Their client, now bank owned, customers seem to think they rule the roost.
    Perhaps they do..

  • Comment number 84.

    I am a great fan of John Lewis and Waitrose, but they do not work right across the market. Part of their success is that they do not operate in areas of the market where price is everything. If I want a cheap washing machine I would not go to John Lewis. If I wanted the best price for a quality washing machine (where there is more room for a margin) I would go to John Lewis. Working in an area of the market where reasonable profits can be made has allowed, with good management and training, an ethos of co-operation to work. I wonder whether the John Lewis model would work in a compnay whose business model depends on lots of people on short term contracts earning near the minimum wage.

    The other point I wish to make is 'ethos'. The ethos of John Lewis has been built up over decades. It has long serving staff, working at several different sites, and a great inertia that makes it difficult to rock the boat. This would not be case in the if public bodies were transformed into small co-operatives. Schools should not be individual co-operatives. For a co-operative to work in education you would need a pupil base of over 10000 from 4 secondary schools and perhaps 30 primary schools. I have worked in schools which the head ran as a co-operative as far as the structure would allow and it was successful in every meaning of the word, but I have been in schools where similar attempts were made and the result was chaos. It depended on the staff remaining united. When redundancies were needed self destruction followed.

    I love the idea, but am unconvinced about the practicalities.

  • Comment number 85.

    There is a third view of what it is - fascism willingly embraced. Remember that Mussolini said: “Fascism should more appropriately be called Corporatism because it is a merger of state and corporate power”

    Of course there are all sorts of exotic views of what Fascism really means, and while the illuminati argue over what it means we will have taken an important step in that direction.

    Actually, we have taken so man steps in that direction that when the British Fascist state dawns everyone will be aghast that the Labour Party that was thought closer to Communism that anything else had gone full circle and brought us to a fascist state.

  • Comment number 86.

    2. At 09:25am on 15 Feb 2010, goodthinkinggeorge wrote:
    So - give the headteacher an incentive to sack staff so that the remaining staff can pocket the profit? Brilliant. Is it actually 1 April?

    If a headteacher can sack staff and still produce results, then the remaining staff deserve a piece of those savings. It may be the only way to try and reverse the tide of spending for the sake of spending.

    If there's one thing we know for sure it's that without intervention, public sector workers cannot and will not spend only what is necessary, or make any concerted effort to save the taxpayer money. And why would they when they owe their jobs to bloated overspending rather than their ability to carry out a productive function?

  • Comment number 87.

    On the more generalised issue RP writes:
    "The background to all of this - of course - is that revenues for public services will be under pressure for many years, as a result of the shocking state of the public finances.
    For the looming general election, there are few more important debates than how public services can deliver more out of less."
    Hence the plethora of emotively phrased but technically flawed policy "proposals" from the Tories. The unwholesome truth (for them) is that there is very little overlap in running a Company and managing a public service. Whilst "profit" is nominally at least, before the Accountants get to work, pretty straightforward to assess.
    "Service Delivery" (as it is poetically known) is not. If you can make 20 suasages for the same price you used to make 15 and maintain the selling price its more profit. Is "educating" 20 kids for the price of 15 an equivalent success?
    How do you evaluate it, and who decides when the sausage... sorry! CHILDREN have been "educated"? Better employ some people to do that then..... OOps it sounds like another (of the Tories' fave whipping boys) 'Educational Establishment' being born before our very eyes.
    My primary gripe with all this is that like most of the Right Whinge ideology which sadly now seems to define our intellectual landscapes, it's over-simplistic tripe. Anyone who knows anything about how schools are currently financed and managed should be aware that they are already as near as dammit financially and managerially autonomous. That is certainly the case vis-a-vis LEAs, and has been since implementation of the 1987 Education Reform Act. The only significant Powers retained by LEAs relate to macro planning issues like global school provision (where & how big) and total school places (where & how many) etc.

  • Comment number 88.

    When the shadow chancellor George Osbourne was trying to explain this on the Today programme he floundered on the most basic questions pinged at him - does not inspire confidence. Oh dear.

  • Comment number 89.

    We used to have a simple system which pretty much worked (no system is perfect). Effectively, a meritocratic Civil Service served as 'The Party'. Every five years the population could elect people to serve as a large Polituro. With nationalised means of production, exchange and communication the system mor eor less worked, despite assertions to the contrary. Experienced people know this.

    We should now modify our system in the direction that the Chinese did, before it's too late. It may already be too late alas.

  • Comment number 90.

    What are Quango's, and how much are they costing us? Strikes me the Quango boss runs his own business! They also seem to employ lots of the great and good, or their wives.

  • Comment number 91.

    79. At 4:18pm on 15 Feb 2010, virtualsilverlady wrote:
    69 copperDolomite
    We aren't even talking about major private shareholder run companies so I find your comment totally irrelevant to the subject.
    Providing localised services employing local people who can make a huge difference if let loose from Whitehall interference can transform the quality and cost of services in their own area.

    The principle remains the same regardless. They'll grow and ideals will be lost/sacrificed/forgotten.
    It won't be long until the community refuse collection management team are running two, then ten, then twenty areas across the country, an empire will be growing, and when that happens?
    Costs will rise - that's what happened when council houses were sold off.
    Taking control of ward cleanliness out of the hands of nurses and giving it to private companies was supposed to save costs. Didn't infection rates rise after that? And the cost? Co-ops full of staff who want to do the job properly won't be able to compete on the basis of cost, the basis of awarding so many contracts.
    This will cost a fortune in rebranding alone, but there are other sources of increased cost. Imagine the council allow Trading Standards to become a co-op. Will they remain in council office premises free of charge? Who sets the rent charged, and will it be charged at a commercial rate? They'll employ their own wages clerk at extra cost since that was once a central function.
    A profit-making social work organisation will cost more than one that has no profit motive, unless of course the profit comes from forcing wages down.
    They'll grow to compete, they'll change how they function internally over time, and the suits will make a mint as they refer to granny, the kids, a child of drug addicts, a homeless teenager, all will eventually become seen as profit units.

  • Comment number 92.

    As a John Lewis employee under the supermarket wing of Waitrose I am delighted by David Cameron's comments.

    I rely on a comment from a former Branch Manager who on his retirement said "the Partnership has an ability to attract good people".

    When I first joined I was bemused by door signs saying Partners only, and other such quirks.

    It did not take long to understand why, compared to my experience working, albeit as a temp, for other retailers why this company was different. Even as a 'rank and file' (the title at the time) I was able to suggest ideas and make a difference.

    Now as a manager I understand that the Partners below me not only can make a difference, they are expected to make a difference and in return they get the rewards the company offers.

    This isn't socialism or communism, it's just sound business sense practiced everday in good times and, recently, in bad.

  • Comment number 93.

    Sounds like a perfect opportunity for top-level management and management consultants to trouser even more tax payer cash and leave even less for providing the actual service - couldn't happen here surely ?

  • Comment number 94.

    I worked for John Lewis and I'd like to correct a few misapprehensions. CopperDolomite said 'Not all John Lewis staff have a profit share'. In fact they do, provided they're employed at the end of the trading year (end Jan, just gone). Everyone earns the same percentage of their pay, usually between 10 and 20%, and it gets announced in March. The reason, incidentally, that its Chairman, and senior directors, get paid less than their equivalents elsewhere, is 1) that no one's pay can exceed a maximum, expressed more-or-less as a multiple of the minimum wage, and 2) there are no lucrative share options. The top jobs appeals to people who buy into the philosophy more than they care about huge rewards.

    My only comment on this debate is that the 'John Lewis' model was created as 'A cooperative society of producers' - any business that sells something for a profit. There is no public equity and no shareholders. The 'stakeholders' are the employees and the customers. Its principles are the sharing of 'gain, knowledge and power'. The SPECIFIC John Lewis model would not work, in my view, for a business that is not creating a 'product' that is sold. But an adapted model might well work if you simply shared 'knowledge and power', without profit. That would be worth discussing. But if it were me, I'd take the words 'John Lewis' off the card. Note, incidentally that the 'power' sharing, which includes an elected council and elected Board members, does NOT dabble in its day-to-day running, which is as professional as any other (and, yes, ruthless when it needs to be).

  • Comment number 95.

    If the John Lewis model is so great, why have number of co-operative companies fallen over the years? and is Mr Cameron advocating co-ops for Marks and Spencers, Tescos or the rest of the private sector? I think not.

  • Comment number 96.

    64. At 2:33pm on 15 Feb 2010, WolfiePeters wrote:

    "The root cause of public service inefficiency is, I believe, quite simple"

    ...before we can make things efficient we need to define what efficiency is.
    Getting served quickly is efficient.
    Getting the maximum number of customers served in a day is efficient.
    Not being able to spend a litle extra time with a vulnerable patient / child / adult etc. is no efficient.

    Monetary efficiency cannot define social functions.

    If my doctor spend an extra hour talking to a patient who would have otherwise thrown themselves under my morning tube - then this is excllent value for money (not because of my timekeeping, but the prevention of the destruction of life)

    This is why private enterprise always looks efficient - it's efficiency comes at the detriment of humanity.

    AKA Capitalism.

  • Comment number 97.

    92. Larry-the-lamb 'This isn't socialism or communism, it's just sound business sense practiced everday in good times and, recently, in bad.'

    Read the originators book. It was explicitly created as an alternative to communism.... in Britain!

    What you're describing is largely socialism.

    The Conservatives hope to lure the disillusioned Old Labour voter with spin just as New Labour did. Meanwhile they, like teh Amercans they basically shadow, will be eroding socialism everywhere it pops up in the world, as they consider it bad for business.

  • Comment number 98.

    I see the Conservative proposal as a cost cutting policy. Local spending constraints have already led to redundancies and policies on social care that are dressed up as more individual choice in return for efficiency savings. The main political parties want to reduce public spending and if they can persuade the rest of us that we can do it better and cheaper than the existing system, eventually they will save a packet. In the end, they will not have to recruit people on the same sorts of contract as at present: pension costs will fall, and redundancy packages will be reduced for new entrants in particular.
    We can expect a lot more of this sort of talk. There is a danger that if it is successful, democratic accountability will be reduced to the level of unelected regulators.
    Any merit there is in this type of "co-operative" proposal needs to be part of a genuine wide-ranging debate with the public about how we all play a part in the recovery from the banking fiasco.
    Unfortunately, politicians seem to think piecemeal initiatives will win us over. It will be a shame if they are proven correct.

  • Comment number 99.

    79. At 4:18pm on 15 Feb 2010, virtualsilverlady wrote:

    "If public services were being run so well and cost effectively there would be no need for change."

    ...and how do you measure they aren't? Daly mail? - or another reliable source?

    Look at your own experience - has the service improved and prices fallen (by more than technology would have povided anyway) in the privatised industries?
    Can we say our trains are run better / more reliable / cheaper?
    Can we say our gas and electric is cheaper / more renewable / more efficiently repaired?
    Can we say our telephone system is better / more reliable / easier for the consumer to navigate?

    I fear when you take out the technoligical advances and include the 'pushed out efficiencies' - i.e. the damage done to the road as 15 different cable companies dig 15 seperate holes on 15 different days - a repair cost bourne by the 'good old inefficient public sector' - council.

    I can't any of the privatised services are any better than they were before - it's very easy to compare the best of today's rail franchises with the 'worst days' of BR when staff knew their days were numbered and had lost all hope - like the P.O. is now.

    The reality is privatisation only looks more efficient because of the monetary value assigned to measure it - and the good old plebians lap up this crazy meaurement and in fact clamber for more of it.

    It should be obvious to everyone y know - who followed the health debate in the US how the claim of private industry being most efficient is twisted.
    private health care in the US is one of the highest to administer in the world
    ...and yet you think the publc sector is innefficient.

    Bring the evidence for your claim.

  • Comment number 100.

    97. At 8:05pm on 15 Feb 2010, Statist wrote:

    "What you're describing is largely socialism. "

    ....and why do you think that? Didn't Engels specifically discover that co-operatives within a Capitalist system are still Capitalist enterprises? - as with the cotton mills?

    For 'socialism' there must be an end to the explotation of the worker, within a co-operative the workers are still exploited - for if they are not then they will not survive.

    "Taking a share" is not the same as "owning production".


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