Proof of delivery: A review of the role of co-ops and mutuals in local public service provision

A review of the role of co-operatives and mutuals in local public service provision

The interest in using co-ops and mutuals to deliver public services has never been greater – not least because of the Government’s commitment to creating a ‘Big Society’ through introducing a greater diversity of public service providers. Indeed, there is a genuinely held view by a number of local authorities that co-ops and mutuals could be a possible way to sustain local public services during a period of unprecedented public spending cuts. Co-operatives UK in its ‘Co-operative call to action’ stated: ‘For the Coalition Government committed to the Big Society and new freedoms in the context of tight fiscal discipline, harnessing co-operative action and innovation is a clear opportunity’. This represents an ambitious claim about the capacity of co-operatives to fill the void in the Big Society rhetoric and take on an increasing role in the delivery of public services. Particularly so given that a recent National Audit Office report highlighted clear risks to value for money when social enterprises take over public services.

In light of rival claims, APSE decided to carry out a systematic review of all the available evidence looking at the benefits that co-ops and mutuals can bring to public service delivery. This was undertaken through our Knowledge Transfer Partnership (KTP) with De Montfort University. Our intention was to examine whether claims about the value co-ops and mutuals can add to the delivery of public services are matched by the evidence. This report is thus intended to make an evidence-based intervention into the debate about whether these alternative models of service delivery can offer a means by which local authorities could sustain local public services in a difficult economic climate.

Having conducted a detailed empirical review, we found the case for co-ops and mutuals is unproven. There was little evidence that they improve or enhance public service provision and what evidence there was tended to focus on the process of forming such organisations rather than the outcomes achieved. Our research did however find that if such approaches to public service delivery were to be a success, simply divesting responsibility to co-ops and mutuals would not be in any way sufficient. In order to thrive, co-ops and mutuals need to be nurtured through ongoing advocacy, support and public subsidy.

If local authorities are to secure any value from working with co-ops and mutuals in the future, then it is absolutely vital that we do not simply follow the current prevailing policy trend without serious appraisal of the options. APSE is calling for a properly informed debate about whether and how co-ops and mutuals can contribute to improving local public services and what their role should be – if any. That seems to us a more sensible approach than contracting out more and more elements of public service delivery without any real appreciation of what the potential benefits could be.

This report is intended to inform and contribute to a dialogue within the local government community 
and I commend it to you.

A copy of the full report is available to download below: