Mutuals

Trust in charities at record low after scandals

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Charities have become increasingly important organisations in terms of underpinning social provision with the shrinking of the state. In our rush to apply private sector principles of efficiency and competition to the sector in order to “professionalise” it we seem to have forgotten something fundamental about the core rationale for the concept of charity. I wonder if smaller charities with neighbourhood/village foci, mutuals and cooperatives might not become increasingly popular in the light of the issues highlighted in the article below. They appeal to me on the basis of their local and highly accountable structures. I have learnt through years in local government that the closer to the punter we are the more “real” we have to be and ultimately the more good we can do. This is important because without some form of alternative social provision to the big or little state many rural communities face a significant and potentially worsening service deficit. The article itself tells us:

Public trust in charities in England and Wales has fallen to the lowest recorded level since monitoring began in 2005, in the wake of a series of high-profile scandals.

Research for the Charity Commission found that people were increasingly concerned about how charities spend their money and perceived aggressive fundraising techniques.

The main reason given for trusting charities less, cited by 33% of people questioned, was media coverage. Stories to have hit the headlines since the last survey, two years ago, include the collapse of Kid’s Company amid allegations of financial mismanagement, and the suicide of Olive Cooke, believed to have received almost 3,000 mailings from charities in a year.

Another controversy concerned Age UK’s deal to help market an E.ON energy tariff to older people, for which it received £6m in commission.

Such stories have contributed to charities’ trust rating declining to 57%, from 67% in 2014.

Co-operative Bank to list on stock market in rescue deal

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There is now a great fashion for mutuals at the moment. They are even credited with holding part of the answer to the modernisation of Local Government. This interesting article about the plight of the COOP Bank reminds us however that structures are no guarantee of good behaviour and effective outcomes. Notwithstanding its mutual status the COOP bank’s problems seem to stem from the same sort of behaviour which brought down RBS. A shame as I still have a lot of time for the COOP as a concept even if its bank has now had to give up its mutual status as this story tells us:

The Co-operative Bank is to have its shares listed on the stock market for first time as part of a deal to plug a £1.5bn capital shortfall and stave off nationalisation following its troubled merger with Britannia Building Society four years ago.

As a result of an agreement hammered out with the Prudential Regulation Authority, the bank’s bondholders – including some 7,000 private investors – will be asked to take losses in return for shares in a move that raised concerns about the future of the co-operative movement and the bank’s ethical ethos.

Although the bank was already a public limited company owned by the Co-operative Group, the country’s biggest mutual which owns grocers, funeral homes and pharmacy chains, it will end up with shares listed on the stock exchange under a complex “bail in” of bondholders in October.

The “bail in” is a new, largely untested method for helping banks raise capital and allow the Co-op to avoid having to raid other parts of its business. Provided bondholders accept, it also allows the bank to avoid turning to taxpayers to plug the shortfall.

The bank, which has 4.7 million customers but has stopped lending to businesses, had run low on capital after incurring losses on commercial property loans largely granted by Britannia before the 2009 merger between the two organisations. Some £14.5bn of loans, largely granted by Britannia, have been put into a non-core bad bank to be sold off or run down.

The great Civil Service sell-off: Dozens of services and 75,000 staff set to be transferred to private sector

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Its ironic but the number of public sector workers increased significantly when we bailed out Lloyds and RBS. Now major reverse traffic is being planned from the centre in terms of the activities profiled in this story. I think there is a very significant need for some mutualised rural proofing to accompany these sell offs – not so much of the “nudge” team who are unwitting leaders of this charge, but when we get to bigger chunks of the civil service, who are likely to be directed more by profit than service as these reforms go forward. we all know it is more expensive to deliver services in rural areas, ergo…..

Ministers are preparing to spin off “dozens” of state-owned services into independent companies in what could be one of the largest privatisation programmes since the 1980s.

Under plans being rolled out by the Cabinet Office, millions of pounds’ worth of state-owned services will be spun off into independent companies – jointly owned by private-sector investors and their employees – within the next two years. Eventually as many as one in six civil servants – or 75,000 staff – could be transferred into the private sector with the Government maintaining a minority stake and offering long-term contracts to the new companies to encourage investment.

Today the Cabinet Office minister Francis Maude will announce that the Government’s Behavioural Insights Team – known as the “nudge unit” – will become the most high-profile area of Government to be “mutualised”.

It will be turned into a profit-making joint venture with private companies being invited to bid for a stake of up to 50 per cent in the new business. Under the plan, the Government would guarantee contracts for a number of years – with the business free to sell its services outside Whitehall.

How public sector mutuals can drive staff innovation

I am doing some work, as part of an RSN/University of Gloucester team, looking at imaginative approaches to delivering services in rural areas. This article profiles a massive new mutual arising from public sector worker buy out options. It has some rural relevance but can you think of anything which is of similar size based exclusively in a rural area? Some of you have already suggested some options in response to our call for evidence, but I am now looking for a really large rural example. For those of you unaware of the scale of what is happening in some quarters of the public sector this article will be an interesting introduction:

Anglian Community Enterprise (ACE) is a successful community interest company, employing over 1,100 staff and is completely employee owned. We provide a wide range of NHS Community Services and generate an income approaching £50m.

Becoming a public service mutual was about being bold and not being side tracked by those who found it difficult to see the real opportunities that the change could bring. We have experienced many changes in the last two years as a public service mutual, one of which is harnessing staff innovation

Becoming a mutual has helped harness staff innovation, as we have been able to make decisions more quickly and have the flexibility to put these ideas to the test. As the culture of the organisation is changing, staff are reporting that they feel more empowered and have a real ability to influence key decisions. Previously, the decision making process could take a long time, which could be de-motivational for staff. Now, freed from a lot of bureaucracy, employees across the business are able to take responsibility and act with speed, improving the efficiency and effectiveness of our services.

Some ACE staff innovation has gained national recognition through awards. An example of this is the Dementia Doorway Project which assesses all patients admitted to the community hospital wards over the age of 75 for early signs of Dementia illness, ensuring timely and appropriate referral and diagnosis. In the period August 2012 to January 2013, 34 referrals were made. The project aims to enable patients who have positive signs of Dementia to commence on the correct referral and treatment pathways, ensuring that they and their families are supported through their journey. It was developed to encourage engagement from all levels of staff to improve the experience that they are able to offer to patients, regardless of the reason for admission. The success of this project has been a clearly defined process, an individual identity, enthusiastic and committed staff and an innovative approach to providing quality improvement.

Mutual ownership plan for post offices moves a step nearer

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This article explains how thinking about the re-jigging of the Post Office agenda has been fermenting since Peter Mandelson loosened his grip on the issue just over a year ago.

It reveals “Thousands of post offices could share services in a mutual organisation to save themselves from going out of business, according to a government-sponsored review that has brought a transfer in ownership of the network one step closer.

“In the same way that farmers join co-operatives in order to share expensive services, post offices could opt in to a mutual umbrella organisation, it said.

“The move could prevent a further decline in the number of British post offices, which have already slumped from a high of 18,000 to 11,500 today. Many rural areas have already seen their post offices disappear, while long queues at city centre outlets often deter all but the hardiest from sending parcels or buying stamps.”

Ed Mayo, head of Cooperatives UK, has identified this as an option – there is still much water to flow under the “conceptual bridge” on the idea yet – but I have to admit that at this early stage the headline idea appeals to me.

NHS reforms: Mutuals will give staff ‘right to provide’

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This article explains how health secretary Andrew Lansley will invite doctors, nurses and other healthcare staff to forming “mutuals” which will contract with the NHS to provide care for patients.

“Healthcare professionals in specialised areas, such as eating disorders, alcohol, and drug detox, mental health and sexual health could set up their own organisations with mutual ownership.”

This article profiles a key early move in the development of the “Right to Run” idea. This comes interestingly on the same day that the Hansard Society Audit of Political Engagement reveals only 1 in 10 people are interested in active voluntary work over the next 2 years.

I have thought for a while that there is a big job underlying the encouragement of workers and communities to do more for themselves, which may have been under estimated in the context of the Big Society idea.

Not that the idea, from my point of view at least, is a bad thing per se.

The juxtaposition of the findings of the Hansard Society and the encouragement to mutualisation within the NHS is just one example of the emerging tensions around translating the idea of the Big Society into reality.