Public sector staff 'have been forced to join mutuals against their will'

As they launch guidance on public sector spin-outs, Co-operatives UK and the TUC, led by Frances O'Grady, say that staff should be balloted about mutualisation

Frances O'Grady
Frances O'Grady

The government has forced employees to leave the public sector and join mutuals against their will, according to Co-operatives UK and the Trades Union Congress.

The two organisations, the umbrella bodies for cooperatives and trade unions respectively, have today published best-practice guidance on public sector spin-outs that says any new mutual should be agreed by a ballot of staff.

"Government plans to outsource public service provision to independent employee-led mutuals should be subject to a ballot of employees and not be forced through against their will," the two organisations said in a joint statement to accompany the launch.

The statement said that some mutuals had spun out "without full support from staff", including several in the NHS. And it said that the civil service pension scheme manager MyCSP had been "formed as a private business without a ballot for staff on the transfer and operates without the genuine accountability that would make it a true mutual".

The Cabinet Office refers to MyCSP as a "mutual joint venture", and MyCSP refers to itself as a mutual. Employees hold 25 per cent of shares in the business, with 35 per cent being held by the government and 40 per cent by the private sector outsourcing company Equiniti.

The guidance from Co-operatives UK and the TUC says that a mutual should have democratic member control and an open membership, and that employees should feel they own and guide the business.

It says that any mutual  launched from government should have an asset lock to ensure that if the organisation closes the assets transfer to another asset-locked organisation or to public ownership.

And it says that mutuals spun out of government should receive five-year contracts. Three years has previously been the norm.

In a statement to accompany the launch of the guidance, Frances O’Grady, general secretary of the TUC, 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 cooperatives. In fact, many are simply privatised services under the cover of mutuals.

"These new entities will give controlling stakes to investors rather than to workers and allow important public institutions to be taken over by large for-profit providers."

A Cabinet Office spokesman said the claims were "baseless".

"The government is promoting and supporting the development of public service mutuals," he said. "Spinning out is a decision for staff themselves to make. Evidence shows that public service mutuals are raising standards because those on the front line have more power to provide public services in the way they know best."

David Ainsworth

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Co-operatives UK

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