Public service mutuals (PSMs) are organisations that have left the public sector but continue to deliver public services. Employee ownership usually plays a significant role in their operation.
After “spinning out” from the public sector, PSMs are free from government control and enable their staff to deliver and improve their services as they know best.
Employee-owned PSMs let dedicated public servants combine a passion for assisting others with their desire to provide top class services, while at the same time sharing in the rewards of their success.
Research studies around the world suggest that employee-owned PSMs offer three important social and economic benefits for public services. These are:
- improved organisational performance and efficiency.
- employee and user engagement, with its resulting influence on service improvement.
- wider benefits to society resulting from a greater sense of citizen empowerment and responsibility.
Accordingly, setting up an employee-owned PSM maybe for you if you’re working in the public sector and think that:
- You can run a service more effectively, achieving better outcomes for users.
- You can deliver a service more efficiently, saving on costs and time
- You have identified a gap in service provision
- You want greater control and autonomy over the service you work in.
In Australia, there is increasing interest in PSMs and Employee Ownership Australia (EOA) is keen to encourage this development. It can also make some support available – within our limited capability -to employee groups and their leaders to set up a PSM, especially where the motivation and drive are apparent to see the project through.
To find out more about PSMs including case studies and what support could be made available, email info@employeeownership.com.au
Also, the manual “ Employee ownership in our public services – making it happen” from our sister organization in the UK, the Employee Ownership Association may be helpful.
The Public Service Mutuals White Paper
Recently, EOA was part of a project managed by the Business Council of Cooperatives and Mutuals Task Force to develop a “White Paper on Public Service Mutuals”.
The Public Service Mutuals White Paper was launched on 4th September 2014 in Canberra by the Minister for Social Services, the Hon Kevin Andrews MP.
The White Paper draws on research evidence to suggest that a wider range of “ownership models” can be considered according to differing circumstances in the public sector. It also identifies public services where employee ownership might add far greater value.
For policymakers now considering developing ways of transitioning existing public services to new ownership forms, there are three models that are being highlighted:
- employee-owned corporations;
- community owned “social cooperatives”; and
- multi-stakeholder owned cooperatives or mutuals.
Employee-owned corporations are considered to be especially appropriate for:
- community-based, primary and preventative health services, and
- social care.
The choice of which sort of ownership model might be most appropriate depends however on organisational purpose and on the benefits which can be achieved by change.
The White Paper sets out the key issues for governments at all levels – as well as for service provider organisations and service users – to consider when the following is being undertaken:
- transitioning services or units out of the public sector specifically into employee-owned structures.
- contracting out service provision to new forms of community-owned or self-directed care cooperatives and mutuals.
You can see more in the “Public Service Mutuals White Paper”
Resources
There is one public service mutual operating in Australia – in Adelaide – Kudos Services
Our Employee Ownership Education page will also be useful to those considering a public service mutual.
These two large and successful employee-owned public service mutuals in the UK are worth noting:
Action to Empower: Why Australia needs more co-operative and mutual enterprises in health, community, and social services
“ANZSOG Occasional Paper” (August 2019) on the development of public service mutuals in the UK and what Australia may learn from this.
Public Service Mutuals – State of the Sector (2018)
Innovation Included: “Why co-owned businesses are good for public services (2008) by Charles Leadbeater
EOA’s submission to the Senate Enquiry on worker-owned Mutuals and Cooperatives (July 2015)
Public, private or in-between? Staff-led mutuals may be future of aged and disability care Oped piece, Sydney Morning Herald, 7th December 2017 by Prof. Julian Le Grand (UK)
For a report on the success of PSM’s in the UK – including a discussion on the variety of legal models they have adopted – see the Chartered Institute of Public Finance and Accountancy (CIPFA, UK) report “Research into the Public Service Mutuals Sector” (February 2017)
