Tory businessman candidate for mayor wants public service ‘mutuals’ – a Trojan Horse for cuts and privatisation

Andy Street, the Tory candidate for mayor of the WM Combined Authority, wants to take public services away from local government and turn them into ‘mutuals’ and social enterprises, owned and run by their staff.  Don’t be fooled:  Street is a lifelong Tory businessman, now sponsored by Theresa May to lead the WMCA.  Mutualisation is a Tory policy, a Trojan Horse for the privatisation of Council services and for workers making the Tory cuts themselves to their own jobs and services.

Street’s plans for mutualisation include social care for the elderly, park-and-ride and back-to-work provision. But they are just the start. He says “as councils come under more cost pressure, we will need to look at more alternative models.” (Guardian 23 Feb). In other words, turning them into mutuals means running them on the cheap. Where will the savings come from? Fewer staff, longer hours or lower pay – or all three.

Cuts today, privatisation tomorrow?

But it isn’t just about making cuts. The idea comes from the Coalition government’s 2011 Localism Act. Cameron’s aim was to break up state provision of public services and that is Street’s aim today.  Some services can be privatised outright if they are profitable enough. But there isn’t enough profit to be made from many public services, so there the answer is mutuals and social enterprises.  They can be the half-way stage, operating like businesses, creating a market, with the option of becoming fully-fledged profit-making businesses in future – or being taken over by one, just as building societies were once mutuals and are now private businesses. It’s a neo-liberal policy clothed in the rhetoric of employee empowerment.

No, John Lewis is not a real co-operative

Street says it’s the co-operative model that John Lewis is run on. But is JL a genuine co-operative? It is true that JL is part-owned by the staff. They get an annual bonus each year paid out of the profits, and they have a good pension scheme compared to most of the private sector, and other perks. They have store staff forums to decide some policy matters, mainly local branch issues such as opening hours and canteen provision.

But where does the real power lie? In a democratic co-operative, each member has the same amount of ownership of the business – 1 member 1 vote.  John Lewis/Waitrose is very different. Employees may be called “partners” but they only have part ownership of the business they work for, while a ‘golden share’ controls things at the centre. The staff elect most of the 82-member Partnership Council.  But that Council is not in charge of commercial activities. Business decisions are the work of the Partnership Board. Part is elected by the Council but the majority is under the control of the Chairman and Deputy Chairman. A real workers co-op would have the workers themselves electing their own board of directors.

Behind the illusion of employee democracy is the reality of elite business power, reflected in the pay – and privileged backgrounds – of those at the top. The Chair of John Lewis is Sir Andrew Mayfield, ex-public school and Sandhurst, annual pay more than £1.5m. And Andy Street himself was on £1m a year. He likes to give the impression on his election CV that he started as an ordinary shop-floor worker but doesn’t mention that he too went to a private school – King Edward’s Edgbaston – and then Oxford before joining John Lewis’s graduate management scheme.

Why doesn’t Street call for the mutualisation of private companies if it’s such a good idea?

Street only advocates mutualisation for public services. But if he thinks they’re such a good idea why restrict it just to them? Street as Mayor would be responsible for Housing and Transport. Why doesn’t he call for the big construction companies to turn themselves into mutuals with all the employees given a vote? He could start with Carillion, based in Wolverhampton. The managing director of Carillion Developments is Simon Eastwood, who is conveniently close at hand as the representative of the Black Country Local Enterprise Partnership on the Board of the WMCA.

And how about transport? Don’t confine mutualisation to park-and-ride schemes – why doesn’t Street call for the big bus companies that operate in the West Midlands to be turned into mutuals run by their employees and users? Like them John Lewis was once a normal business, before its original owner turned it into a mutual. If it’s good enough for John Lewis and Waitrose…  But of course he won’t – they are profit-making private sector organisations. Mutuals are just for cost-cutting public service spin-outs.

What BATC says

BATC is strongly against the ownership of public services being transferred to other bodies. Retaining ownership by the Council means they are always in the public domain and under the control of and accountable to elected local government. In short:

  • say no to mutualisation of public services
  • keep services in the ownership of the council,
  • properly funded and staffed
  • but run democratically by staff in partnership with services users and the community
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