27th October 2011
Trust in markets and the state has never been lower. Mutuals may be part of the answer, but a long-term political consensus will be needed if they are to succeed argues Patrick Diamond.
In the wake of the most severe global depression for more than eighty years and the search for credible alternatives to neo-liberalism, politicians of all stripes have vied to champion and take ownership of the mutualist ideal. The values and institutions of mutualism have the potential to act as a vehicle for a new politics of the public interest after the crisis.
It is in the public sector where the potential for a rapid shift towards mutualist models has been perceived to be greatest. This is partly driven by the need for innovation in the light of financial austerity, alongside the recognition that a vibrant public realm is at the core of a successful, prosperous society. The public sector in the United Kingdom is undergoing the largest budgetary cuts since the Second World War, while all over Europe governments are imposing harsh austerity measures which may radically curtail the activities of the state. Public sector bodies and local councils in Britain are determining how best to respond and adapt to the next wave of change driven by the cuts imposed by the Conservative-Liberal Democrat Coalition government.
Nonetheless, there is also a need for a coherent strategy to manage the process of change underway. Indeed, there is a real danger that Labour will concede the mantle of mutualism and community ownership to the centre-right, through knee-jerk opposition to Cameron’s ‘Big Society’ agenda. It is imperative that opposition to the cuts does not become an objection to the redistribution of power in British society. If the left defines itself as defender of the monolithic state, it will be forever associated with unresponsive and centralising bureaucracy. Councils and local government, in particular, have to determine how best to maintain effective services in a climate of austerity, accepting that rising demands and tighter budgets require new delivery tools and new models of provision. There is no alternative to innovation, namely doing more for less and discarding the old rules of command and control.
In this regard, there are a range of emerging models in the United Kingdom that have sought to capture the benefits of mutualisation, notably Lambeth Council’s model of a ‘co-operative council’ in south London. A host of local experiments are also underway including the ‘Scallywags’ parent-run nursery in Bethnal Green, the ‘Holy Cross Community Trust’ day-care service in Camden, and ‘Southwark Circle’ which helps older citizens and their families through social networks that enable people to share their time, skills and expertise. They offer the potential for a real transformation of services struggling with rising demands and shrinking budgets.
Yet, as well as celebrating and developing such experiments, policymakers must also recognise that there are a number of caveats to the wholesale endorsement of mutualism in the current climate.
First, as experience in the Netherlands and Nordic countries indicates, the cultivation of self-organising institutions and networks that are capable of delivering high quality public services requires decades of investment, as well as the appropriate cultural values, norms and an appropriate level of social capital. In other words, mutualist organisations will not be fostered and embedded within the course of a single parliament, but will require decades of investment and support to flourish in partnership with an ‘enabling state’. In order to generate alternative provision through the civic sphere, it is necessary not for the state to get out of the way, but to provide capacity and resources.
The second point is that mutualism in the public sector raises issues concerning equity similar to those posed by localism: how can equal access and quality of service be maintained nationally if there is much greater variation in how services are delivered locally? Left politics has traditionally been predicated on universality and uniformity, chiming with influential strands of opinion which express hostility towards ‘postcode lotteries’ in public services. Nonetheless, the only means of improving services in an age of austerity, enabling more citizens to experience and achieve excellence, may be precisely to tolerate greater variance in outcomes. But this remains heavily contested terrain for the left, at least in Britain and much of Northern Europe.
The third issue relates to the politicisation of mutualism as an approach to organisational reform in public services. While it is inevitable that mutualist ideas will be subject to contestation on both left and right, they require long-term investment beyond the lifetime of any single parliament or government. The importance of integrating mutualism into a long-term consensus incorporating the most basic institutions and values ought not to be understated. For the Labour party, it means reflecting on how institutional forms can be entrenched within the fabric of society, rather than swept away immediately in the wake of electoral defeat as may be the fate of Labour’s social reforms in the United Kingdom.
Research carried out in May 2011 for Policy Network showed that the majority of citizens in Europe had lost faith both in markets and the state. They recoiled against the behaviour of financial markets and the banks in the aftermath of the global crash, but they were also concerned about the state’s capacity to uphold and defend the public interest. Politicians, therefore, cannot respond to the crisis by simply reasserting the state’s capacity to ‘command and control’. Public service mutuals, owned and shaped by employees and users, could be part of the solution.
Patrick Diamond is a senior research fellow at Policy Network and a Visiting Fellow of Nuffield College, Oxford
What Mutualism Means for Labour
is published by Policy Network http://www.policy-network.net