Why aren't there more public service mutuals in Wales?

Keeping the unions sweet, not wanting to look too approving of the UK government's enthusiasm for social enterprise... is the Welsh government cutting off its nose to spite its face by not using more public service mutuals?

The 2010 Conservative general election manifesto included a clear commitment to establish public service mutuals which was repeated in the 2015 manifesto. In this context, the last five years have witnessed the creation of 106 public service mutuals in England successfully providing over £1bn of public services. There have, however, been no comparable moves in Wales, although the matter has just been placed firmly on the political agenda by the 2016 Welsh Conservative Party Assembly election manifesto, the first manifesto of any party at an Assembly election to contain a clear commitment to create public service mutuals in Wales. 

In advancing this particular policy the point must be made that the public service mutual solution is in some ways more appropriate for Wales than England. Not only do public service mutuals make good policy sense in Wales – whose public services are currently under very considerable pressure.  They also resonate and connect directly with Welsh culture.

Wales: a community of communities

Wales is often described as a ‘community of communities’, a nation that is better understood from the ‘bottom up’ than from the ‘top down.’ Approached in these terms, Welsh culture is such that it enjoys a particularly good fit with the mutual ideal of local employees taking ownership of the businesses where they work. When viewed in these terms it is no great surprise that Robert Owen, the man credited with having developed the co-operative economic development model, was Welsh.

To date, however, the Labour run Welsh Government has struggled to develop a coherent approach to public service mutuals. On the one hand, it is clearly mindful of Wales’ Robert Owen heritage and co-operative culture, which should really result in Welsh Labour leading the way on the mutualisation of public services and yet, on the other hand, it has a strong commitment to the ideal that public services should be provided by the state. 

To be fair, the 2009 Welsh Government Social Enterprise Action Plan did ask all government departments to consider whether any of their services could be better provided by social enterprises. The Action Plan, however, failed to translate into any significant changes in public service provision, at least as far as co-operatives and mutuals were concerned.

In 2011 Kevin Morgan and Adam Price’s important paper, the ‘Collective Entrepreneur’, came out and was very critical of the Welsh Government’s approach to the co-operative and mutual economy, with respect to its reluctance to embrace public service mutuals. This caught the attention of Labour Assembly Members and, almost certainly in response to it, the Welsh Government went on to establish the Welsh Co-operative and Mutuals Commission.

While the Commission’s 2014 report sought to distance itself from the public service mutuals agenda in England, and said that it understood some of the concerns of the unions about moving away from the ideal that public services should be provided by the state, it also argued that there was a place for using mutuals to provide public services and later actually cited approvingly some examples of best practice from England. One had the distinct sense in all of this that the commissioners were performing a delicate balancing act, distancing themselves from the coalition in Westminster, so as not to annoy the Welsh Labour government and alienate the unions, and yet nonetheless recognising the importance of the mutual solution in public service provision.

Their work, however, was not helped when in March this year the Welsh Government published its Alternative Delivery Models in Public Service Delivery Action Plan, in which it errs very much on the side of keeping proponents of old Labour orthodoxy on-side rather than enthusiastically embracing mutuals as a mechanism for the delivery of modern public services. It stated: "We advocate cooperative and mutual models of delivery and other alternative delivery models only as an alternative to ceasing or privatising services, as a ‘least worst’ option."  Lest this declaration on page two was not enough, it is repeated word for word on page ten. 

The future for public service mutuals in Wales

Rather than moving forward the Welsh Government seems to be moving back. The 2009 Action Plan requirement for government departments to consider whether any of their services could be better provided by a social enterprise was not qualified by the statement that they should only move away from state provision if the alternative was the cessation of the service or privatisation.

The March Action Plan fundamentally misjudges both the urgent need for public service solutions that work and the culture of the people of Wales. The Government seems to be more concerned about placating particular interests within the Labour Party than with developing compelling policy solutions that provide a good cultural fit for Wales. The enthusiastic endorsement of public service mutuals set out in the Welsh Conservative manifesto is much more appropriate. 

Concern about Labour’s approach to the mutual sector is further compounded when seen in the wider context that Wales is also missing out on another key provision to assist the social economy, the Public Services (Social Value) Act. The legislation was introduced as a Private Members Bill in the Commons by Conservative MP Chris White whose co-sponsor in the Lords was the Lib Dem Peer, Lord Newby. When taking the Bill into the Lords in 2012, Lord Newby drew attention to the limited application of the Bill to Wales and wisely suggested that this was something the Welsh Government should correct.

The recent Welsh Assembly elections on 5th May returned Labour for a fifth consecutive term but only as a minority administration. It will be interesting to see whether, going forward, Labour’s need to look to other parties to pass its budget might provide occasion for the Conservative Party to persuade Labour to take the opportunity to establish public service mutuals in Wales rather more seriously.


This article was written by Dr Dan Boucher and draws on some of the central findings of his pamphlet, Mutuality: Towards a Renewed Welsh Economy & The Renaissance of a Radical Welsh Politics, which has just been published by the Bow Group. Dan stood for the Welsh Conservative Party as a candidate for South Wales West in the recent Assembly elections.

Photo credit: Stuart Madden