Tuesday, 15 June 2010

Can mutualism be Labour's new big idea?

A new approach could be needed in relation to how Labour sees the concept of social democracy and promoting equality if it found itself back in government in 2015. The Conservatives and Liberal Democrats in government are using the problem of Britain’s deficit as a way to promote a systematic rollback of the State and public services. By 2015 public services could be a shadow of its own self after the expected cuts and job losses. Any incoming new Labour government would find it exceptionally hard to rebuild the decimated public sector in a way that is sustainable and economically prudent.

For local and central government to rebuild trust with the citizen and promote social democracy and higher public spending would be an exceptionally hard task for a new Labour government within the next five years, especially if tax receipts are still weak, economic growth weak, and the deficit still the albatross slung around the collective neck of the cabinet.

In this context, if the above was correct in 2015, how can Labour rebuild confidence in the promotion of social democracy in a new era of fiscal restraint during a time when resources could be bare and money extremely tight even by the time it could return to government?

In Labour's 2010 manifesto it expressed support for the idea of mutualism. It said: “We want to see more local organisations run on co-operative principles with an expansion of Community Interest Companies and third-sector mutual organisations that reinvest profits for the public good.” The manifesto went on the commit to the mutualisation of British Waterways.

‘Mutualism’ can be defined in this case as a partnership between citizens that leads to a valued outcome. It encourages people to work together for the common good. It encourages cooperation, solidarity and the flowering of shared values and beliefs to lead to an end that benefits all. A Cabinet Office paper in 2009 explained that mutualism, or “co-production”, was a way of
“establishing a partnership between citizens and government... Citizens contribute more resources to achieving an outcome, share more responsibility and manage more risk in return for much greater control over resources and decisions.”

Social democrats could nod with approval the line “establishing a partnership between citizens and government”. The State provides the resources and the tools to enable citizens. This is different to the Conservatives’ ideas of a “Big Society”, in which the State is meant to withdraw from the provision of services and let individuals and get on with the job of providing them.


So, can Labour use mutualism as its new big idea? The ideals that mutualism and co-operatives espouse could be embraced by Labour in the post-credit crunch age. Indeed the Labour Party already enjoys a very significant historical partnership with the Co-operative movement, and shared ideas and ideals have contributed to the promotion of co-operatives and mutuals in our society.

But can mutualism promote a good society? Through mutualism and co-operatives, everyone is a stakeholder. Everyone has a voice and everyone has the ability to be part of an prosperous and decent society where power, resources and wealth can be shared more equitably. How? Local (and central) government can influence and encourage the growth of the non-profit sector in some public services. However, it must continue to oversee, monitor, support and regulate the non-profit sector in the provision of services to the public.

A good society could bloom in the public and private sectors through partnership of the State, co-operatives, as well as the voluntary and non-profit sectors to empower the citizen and give them a true voice in the way in which not only their services are run, but what they get out of them.

sure start

One can look at the success of SureStart. This is an example whereby government can provide the means for people to contribute for the common good - a classic example of the enabling State. Government funded SureStart centres, which in turn were provided by local authorities, as well as the voluntary, private and independent sectors.

Could this be the future of social democracy in the modern age where resources are scarce and the means to achieve them are also likely to be scarce? Sweden and other Nordic countries have experimented with housing co-operatives and in other areas. Indeed, the Labour-controlled Lambeth Council has decided to promote the mutualism and co-production by attempting to become the first ‘Co-operative Council’ in Britain. In its White Paper, Lambeth Council outlined that:
“It is vital that services adopt a ‘mixed market’ approach to service delivery. Numerous models already exist, which local areas can draw upon, such as neighbourhood management, contracted services, third sector provided services, public sector provided services, mutuals/co-operatives, arms length management organisations (ALMOs), Tenant Management Organisations (TMOs), foundation hospital trusts...”
Yet social democrats are also entitled to ask the question: what is the difference between co-production and voluntarism? Isn’t both about passing the buck, shifting the role from government to people as a way of washing their hands from responsibility to public services and the vulnerable? Certainly that has been some of the criticisms of foundation hospitals. If Labour was to embrace co-production as its ‘big idea” then how can it gather support for this venture? And, more importantly, can the ideology behind mutualism and co-production translate into viable policy? What areas of the public services can mutualism thrive? And which should be left alone? What is clear, however, that Labour must think anew how it can make the case for a good society.

1 comment:

  1. Great post Richard, and a very interesting blog so far. I hope you continue blogging.

    In my view, cooperative and mutual enterprise are most appropriate for the private sector. I think that in the public sector, we have local councils which could be more involved in the delivery of services that are otherwise separated from the local authority and the oversight of elected councillors.

    With the third sector, terms and conditions are less secure than in the public sector, unionisation is lower, and there is a dependence upon the unpaid labour of volunteers. Savings from transfering services from the public to third sector tend to come from the staff rather than from genuine increases in effectiveness.

    There's a great deal of quantitative evidence that co-owned firms in the private sector are more sustainable than traditional capitalist firms and can offer better pay and conditions for employees.


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