It has been rather a strange month or so for the co-ops, mutuals and employee owned sector.  And education.

 First we had the news that Central Surrey Health (CHS) , held up as the employee owned model to create the Big Society, had not succeeded in the tendering processes for other parts of the Surrey NHS.  This brought forth claims of unequal playing fields and too much emphasis on financial costs at the expense of social benefit.  Then we learn that Circle, again a company who describe themselves as an employee owned social enterprise (can someone tell me what that is along with an employee owned mutual) were successful in securing a hospital contract and £40M of debt.  (Maybe someone should inform the board of Glasgow Rangers FC about this organisation which is willing to shoulder massive debts, just in case they lose their tax tribunal with HMRC).  The coalition were adamant this was not a privatisation but the media invariably referred to Circle as a private concern with no reference to the employee involvement or Big Society (Haven’t read the Guardian yet)  So we have a flagship “Big Society” business losing out and an employee owned privatisation (or not) succeeding.  Confused?  You should be! 

 To add to my confused state of mind, I then encounter the news that the NAHT has balloted its members and found them in favour of strike action.  The first time in their 100 or so year’s history.  Their spokesperson suggests that this is an indication of how dire the economic situation is but I can’t help thinking how you could be a trade union for over 100 years and never have considered strike action!  Did they miss the Great Depression and the 1970s?  Again, much of the media coverage focussed on the disruption to parents child minding needs, presumably because they perceive education as much of a child minding service as an investment in society?

 Next up to highlight the confusion and unrest in the public sector we had students marching against fees.  As someone who had their university tuition fees paid plus an enhanced grant as a mature student I am wholly supportive.  When are we going to accept the fact that education is necessary investment in our younger citizens and not a cost to be minimised.  Yes, we have decisions to make with limited resources about where we incur public expenditure.  We had them before the greedy bankers blew a hole in our PSBR – it’s called economics, deciding the best use for scarce resources and recognising that if you spend on one item , you can’t spend on lots of other things (opportunity cost).  Surely, investing in our future workforce and citizenry is a fairly basic concept in any civilised, modern democracy.  Instead we are trying to create a market in education services.  I have said before and will keep saying, if I am being asked to buy a degree at £36.000 then I will be demanding (yes, in a market economy the customer is always right and his demands have to be satisfied) a first class honours.

 So, are we on the road to a new Big Society or are we simply looking to reduce the role of the state. 

Are we as confused as the US Republican presidential candidate who was most certainly for reducing government but couldn’t, despite some very helpful prompts from competitors and the audience, decide exactly which parts he wanted to cut.  Does the creation of a public sector as commissioning agent rather than the delivery mechanism fundamentally change a national health or education service so long as it continues to provide on a basis of need and not an ability to pay.  If it is on the basis of need, does it matter who delivers as long as the quality is assured and value for money is achieved.  But what about wider social benefits, which brings us back to Central Surrey Health and level playing fields.

 I have come across a couple of academic papers in the past week making the point that when we try to measure the performance of co-ops with traditional scientific management tools they don’t necessarily come out looking too good in comparison to investor driven models.  Co-operatives are not profit maximising, rational economic entities.  Until we get government and society to stop measuring everything in monetary terms and start recognising and accounting for wider social benefits then we will remain stuck in the mind blowingly confused state highlighted above.

 If Big Society is simply about motivating employees to be more productive then it totally misses the point.  If those who advocate public sector delivery can’t take on board the need to be more efficient with our scarce resources then we are in danger of doing a Berlusconi on our economy.  We need, more than ever, to get across the message that co-operatives understand the need to be viable and efficient but at the same time recognise the need to consider social and community objectives.  There is an opportunity cost in pursuing social goals, in terms of reduced profitability but there is also the need to generate surplus to support the pursuit of those social goals.  That’s a balancing act the co-operative sector has always had to perform.  Let’s hope government and the rest of our society can finally get their heads round that and we get to the point where I could have headed this piece “The Co-operative Option” and it would have been clearly understood.

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