In the last couple of weeks, we’ve seen some movement on the government’s mutuals agenda – the idea, championed by the Cabinet Office, that public services should be spun out into employee-controlled social enterprises which, it says, will be much more efficient at delivering services than the lumbering giants in the state.
One announcement, at the end of April, was the launch of the “first central government mutual”, a project called MyCSP – short for My Civil Service Pension – which last month won 15 contracts to administer public sector pensions, in addition to its initial job running the principal civil service pension scheme.
But this organisation represents a worrying trend on the part of the Cabinet Office towards a dilution of the traditional definition of a mutual.
MyCSP is actually a private limited company, 40 per cent owned by financial outsourcing giant Equiniti, 35 per cent owned by the government and only 25 per cent owned by the staff.
If you look up “mutual” in the dictionary, this isn’t what appears.
While “mutual” isn’t a legal form or protected term – you can call any company a mutual if you want – the usual requirement is that it’s an organisation where ultimate control of the whole organisation rests with staff and service users. At the very least, the staff should have a controlling share.
Traditionally a mutual had a narrower definition even than this. It was simply an organisation owned by its customers – something like credit unions, co-operatives and building societies. More recently, we’ve seen the net widened to include staff-controlled community interest companies and industrial and provident societies.
All of these organisations have had an asset lock that prevents a handful of shareholders extracting most of the profit.
If we look at the official government definition, however, it’s totally different. You can call something a mutual, its Mutuals Information Service says, if it’s a “business where employee ownership or engagement has a significant impact on the governance of the organisation”.
This is sufficiently loose a term that it can apply to almost anything – including, it appears, an organisation where the largest stake is owned by a mega-rich financial firm.
The new MyCSP may be an admirable enough organisation in its way but it should be called what it is: a joint venture between the state and a private company, with a bit of staff ownership thrown in.
Pretending that it’s a mutual rather misrepresents the entire spin out agenda.