Is fear of failure holding back public service mutuals and spin-outs?
There needs to be an acceptance of risk if a truly vibrant marketplace is to be created, argues Mark Johnson, managing director of TPP Law
A vibrant and diverse economy of public service providers, many of whom will emerge as spin-outs or employee-led mutuals from the public sector, is at the heart of the government's blueprint for public service reform and the creation of the "big society". The Cabinet Office's vision is for one in six public servants to have formed themselves into public service mutuals by 2015. Already, in health, there are 20 spin-outs under the right to request programme and a further 30 in the pipeline, delivering nearly £1bn of services. The Cabinet Office is supporting a programme of 21 pathfinder public service mutuals and plans to roll out a universal "right to provide" across the whole public sector, entitling public servants to turn their departments into an employee-led enterprises, the process known as spin-outs. In local government this will be given legislative force under the community right to challenge in clause 68 of the localism bill.
This ambitious change programme will take many years to bed down. In addition to the practical obstacles faced by putative spin-outs, in terms of access to funding, practical advice and assistance, and the costs pressures created by legislation designed to protect the rights of workers, a significant brake on progress is the public sector's attitude to failure. If we are to let a thousand flowers bloom, inevitably some will wither and die. Can commissioners tolerate this and how do we plan for and respond to such failures? Commissioners and prospective providers should develop a healthy fear of what can go wrong: but they should not let it paralyse them.
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