Michael Short: Peter Hunt, welcome to The Zone. Thank you kindly for your time. You founded and lead Mutuo, an innovative UK organisation that champions a mutual approach to business and public policy. It has been very effective in its lobbying efforts, and we will come to that later in terms of what is happening with public policy in the UK. Can we start though please with the big picture? How have co-operatives and mutuals been playing an increasing and even pivotal role in public service delivery? How can we get our heads around this concept perhaps encapsulated by the term public service mutual? Peter Hunt: There was a process that was begun really under the Thatcher years of British government, which was looking at the way the public sector provides certain services. They didn’t like it, didn’t think it was efficient and decided there ought to be a new way of looking at it. They alighted upon the concept of privatising a whole range of different services, putting competition and the marketplace into the picture so that the magic of capitalism would work to deliver quality, to deliver efficiency and so forth.
That is a pretty ideological way to approach public service reform, but actually it is something that has been copied around the world and it is something that really has been the only game in town for quite a while. If you fast forward then through to the Blair years, there was the same problem – conceptually people saw them as being inefficient, of being slow to change and so they wanted something different. What was different about the Blair approach was that he recognised and his government recognised that if you are still using taxpayers’ money, you still need to have some kind of accountability which isn’t just the marketplace.
It’s not just about things going bust if they are no good or customers moving with their feet. You have to have some kind of accountability that is built into the process, and that is really where the mutualisation agenda collided with this whole obsession with improving efficiency and improving the effectiveness of public service delivery.
So a number of experiments were tried, principally in health, education, local government services and some other areas like housing, where public services were operated in a businesslike fashion, like a private enterprise, but they remained accountable to the people they were providing the services to, which is not like a private enterprise. Instead of being accountable to the shareholders, they were accountable to the customers.
That is where we came into this picture, when we helped to develop National Health Service foundation hospitals, cooperative trust schools and a whole suite of other types of mutual organisations that try to bring together the best of the private and the public sectors in a non-ideological way and a non-obsessive way, but one that just works. It works because these organisations deliver for their customers and they deliver the best value you can possibly get for taxpayers’ money.
MS: How can you know, how do you judge, how do you measure that it is working?
PH: One of the interesting facets of the privatisation agenda is that many of the now-privatised businesses are extremely unpopular with the public. There are arguments around pricing. There are arguments around competition. People do not trust them. They are not transparent. So there is still an ongoing debate and quite an unpleasant argument between customers and providers about the quality of the services and the price they are paying for those services.
If you compare that to the experience of those businesses that have been turned into mutuals, we just don’t see the conflict. We don’t see a lack of trust, because there is transparency. We don’t see arguments around pricing, because people trust the organisations – and that trust element in all of this is a critical part of the whole journey of creating a public service mutual.
If I had said we want to create public service mutuals in the United Kingdom 15 years ago, I would have been looked at quizzically and sent away to the loony bin. Today, people actually know what we’re talking about and that is because there are real examples that we can point to and say that is what we mean. We mean hospitals that operate for the patients.
We mean schools that operate for the parents, the staff and the children. And we are talking about public services that are completely focused on the quality and the efficiency of the service they are providing.
MS: And yet are sustainable in the long term, and whilst not being motivated by profit they have long-term sustainable profit by using business principles in the marketplace. So, as you say it is a post-ideological, very eclectic public policy situation.
PH: Yes, I don’t know why people struggle with this, because for me it is just common sense. Rather than just deciding what the template is before you start, you look at the situation on the ground, you look at what you’re trying to achieve and then you try to design something that actually delivers that. And the problem with the old binary debate between public and private is that it is just a one-size-fits-all philosophy.
You either believe in one or the other. And then you try to impose it and shoehorn the service into what you’re seeking to achieve. I don’t think that is very intelligent. I think it is much more intelligent to look at the individual service and to try to work out how you can make it work for the majority of the people you’re seeking to deliver the service to.
And that is what the mutuals are all about. In shorthand we can talk about public service mutuals. In reality, there are some features they all share, but they are all different. And they are all designed to serve the conditions that they are operating in rather than some ideological mantra that is just delivered from on high.
MS: Okay Peter, then let’s move from the general to be specific with examples. You have mentioned health, education, childcare, housing among other things. Can you please pick a couple of specifics within that panoply and talk about how things have actually worked? PH: Let’s look at health, because this is, in terms of scale, the biggest area of change. 144 hospital trusts, which is approximately half of the hospital businesses in the NHS have been converted to a mutual status. They are called NHS foundation trusts.
The jargon is painful, but they are mutuals. And the way they operate is as follows: under the state they had an independent board which was appointed by an independent body, effectively a bit like a charity, and they operated in the best way they saw fit. They were accountable to the secretary of state, but of course with 300 organisations, is that a serious accountability? There is no day to day relationship with the government, and the secretary of state personally was liable for every decision they ever took, and he was responsible to Parliament.
So it was a tortuous process that did not have any sort of meaning on a day-to-day basis. That has been replaced. So you have now a trust board, which is people who are executives, doctors, nurses, surgeons, administrators, and non-executives who are chosen for their particular skills to be non-executive directors. So it looks like any other company in that respect, but there is one crucial difference because instead of having shareholders who are keen on a return on the investment they might have made or want to get dividends out of the business, the board is responsible to a governing body which is elected from the stakeholders.
It is made up from patients and public, members of staff, local educational institutions – a whole range of stakeholders who are effectively like the shareholders in the business. And they have powers – they have powers of hiring and firing over the chair of the trust. They have the powers of hiring and firing over the non-executive directors. They have to receive the accounts. They had to approve the accounts. And so they have got these sort of nuclear powers.
MS: Which used to reside in the minister? PH: They used to reside in the minister but they were never used. They were never practically used. They were sort of nebulous. But now they are real. They are local. They are regularly tested. So the whole dynamic has changed. Instead of the board being related entirely to the bureaucracy of the Department of Health, now they have to turn around and face their public, their representatives of the public who are a sample of the types of people the hospital exists to serve.
And it really works. They have changed their behaviours. The boards have become more responsive. People know more about what is going on. They understand more in terms of the difficult decisions that need to be taken around resource allocation and service provision. And this all worked within an overall framework with the funding is still provided by the state on the basis of a general allocation for procedures, and it’s still part of the NHS brand.
People really like it, and the amazing thing is that in the short period since 2004 when the first one was established, half of all hospitals are now NHS foundation trusts and over one million people have joined these organisations – because they want to know what is going on in their local hospital. They want to have a say and they want to find out more about how they can engage with that process.
MS: Before we go on to other policy areas and other questions, can you please just scope the situation? Can you please give some numbers about mutuals and co-ops in the UK please? PH: The overall sector is worth about £115 billion of turnover a year. That is probably between five and eight % of the whole economy. So it is not huge, but in certain areas it is significant. It is significant in mortgages; 20% of mortgages are provided by mutuals. It is significant in health care, as I have just described. It is significant in some aspects of education and other public service delivery.
And so the mutual sector has about 20 million members out of a population of around 60 million. So one in three of the entire population, not just the adult population, is a member of at least one mutual. We estimate that people are often members of two or three, and so it is very significant in terms of the number of people who are affected by mutual businesses and in certain industries, certain business areas, the mutual sector is quite significant and it is growing.
All those numbers – you can raise your eyebrows and say very interesting but what does it actually mean, but the thing that is of most interest to me is that at a time when we’ve been through the nightmarish scenario of contraction of our economy, when business and GDP have fallen, the mutual sector has grown by over 30%. A lot of this is to do with the conversions of organisations from the public sector into mutuals, but it is also to do with people choosing to do business with mutuals because they do not trust other types of business.
MS: We have a situation in Australia where it is estimated that as many as eight in 10 people are members of a mutual or a co-op, many of them perhaps not knowing about it. We do not talk about it a hell of a lot here, but it seems there would be a lot of upside, particularly as we’re heading into an election campaign. And one that follows an election only two years ago in 2010 that was widely viewed as an ideas-free zone and therefore very disappointing. There is a lot of scope to talk about the improvement of service delivery through this sort of structure. As I understand it, there is an industry group or lobby group being set up here. Part of your function has been to lobby, and your secretary is involved in that public policy process. Can you please take us through what is happening with `Big Society’ and with the work you are doing for the labour party in the UK on a manifesto for policy in this area? PH: For a range of reasons, we’re in a much better place in the United Kingdom then we were a decade ago. A lot of what I see in Australia today I can really associate with how it was when we started our project 10 or 11 years ago, when people didn’t think about mutuals, didn’t think about cooperative ownership, didn’t have any real interest in looking at ownership and all the different ideas around that.
So where we are in the UK is those numbers I have described in terms of the growth of the sector, but also there is a policy consensus between all of the political parties where they think this is a good thing to be doing. They think it is a good thing to be supporting. You mentioned Big Society, which is the sort of eye-catching policy brand of the coalition government, which is about localism. It is about involving people in decision-making. It is about providing public services.
These are all good things which actually, although they have been brought forward by one particular tribe in the political world, are things that nobody really argues against from Labour or any other parties. The issue is around delivery and how you actually bring this about. There are quite a few problems with having a very attractive policy of involving and engaging local people at the same time as cutting the guts out of the public budget, which is what is happening in the United Kingdom.
And so the problem that I fear for the Big Society and the way it has been implemented is, firstly, that there has not been sufficient thought in how you can actually set up these organisations and help them to succeed. But secondly there is a risk that people will associate the Big Society agenda with the cuts agenda and conflate the two things. And that is a big problem.
MS: For which they could be forgiven. Do you think that it is a cynical exercise by the coalition or just an unfortunate confluence of economic and financial circumstances? PH: I think it is both. I think there are cynics within the coalition who still adhere to the ideological `we want to have a small state, we want to have more private enterprise providing services’. But I would defend the Prime Minister.
I think he is sincere in wanting to promote community activism and wanting to promote responsibility, people taking responsibility for the services that affect them. Nothing is as simple as it first appears though, is it? I reckon they’re still remains a big opportunity to make this thing work, whatever the economic environment.
MS: And whichever party is in power? PH: Whichever party is in power, yes.
MS: So what are you doing, sorry to interrupt, but what are you doing with the Labour Party? PH: My background is with the Labour Party. The Labour Party would always argue that it is the most pro-cooperative, pro-mutual party. You can have a big debate about whether in practice it has ever done much for the sector. In some cases it’s done a lot and in other cases it’s fallen short of the mark.
For me, it is not about party political ideology or anything like that. It is about trying to find common threads that run between all the political parties, where people can be in favour of localism, they can be in favour of accountable public service and they can be at the same time be in favour of services that run in a businesslike fashion. So, for me, it works for all of the political parties. There is an old story around the setting up of a co-op to provide leisure services in Greenwich in south London.
The director, when he tried to convince the politicians to support it, went to the Labour people and said `this is socialism, comrades; you have to vote for it’. He told the Conservatives that it was privatisation of public services, which they had always been in favour of. And then he went and convinced the Liberal Democrats that it was community ownership in action. Now, it was all those things and none of them. So for me this is not necessarily just about a particular party’s approach to it.
What I am doing with the Labour Party is trying to navigate through the good things of Big Society and the good things that the coalition has done, which should not be derided. They are positive and they have moved the agenda further forward. But to think about what the next government is going to do, which is likely to have a Labour element to it, and to work out how you’re actually going to deliver these things on the ground. So I am trying to fill in the gaps that are missing at the moment.
MS: One of the things that comes through very strongly in talking with you is the need for execution, and to that end the pieces that you have been adding to the research work that you have been doing for various groups, the do-it -yourself bit, the how-to bit, seems to have become very popular and pivotal in the work that you do. Can you talk a bit about that, please Peter?
PH: It is the crucial thing that we do. It is a trite thing to say, but we are not a think tank, we are more of a do tank. It is all very well convincing people of the philosophy and the conceptual value of what you’re talking about, but if you can’t actually point to something on the ground that is actually what you mean then it still remains something difficult to pin down.
Every project that we get involved in we want to see a living example of it. So, whether it is developing a new model for a cooperative school, or a new model for social housing, we want to see it on the ground and so we put a lot of effort into designing the business model, doing the legals, and then getting someone to actually implement it.
Route 1 to growing the mutual sector is to replicate successful models. And if those models do not exist you have to create them. So what we have done is we have invested in creating models and then seeking to establish a regime that can replicate them quickly.
MS: A formative and even seminal moment for you, a turning point in all of this, in moving from idea and philosophy to implementation and change, was to do with football. Can you please recount that anecdote? PH: I worked with the cooperative party. It was my job to proselytise on behalf of the corporative movement and to say that mutuals were a good thing. And there was a degree of success attached to that. But, again, you can only really measure your success when people vote with their feet and people can actually see these things happening.
And when we produced a policy paper which was arguing in favour of supporter ownership of football clubs, soccer clubs, we finished the document off with a do-it-yourself guide on how to take ownership of your own club. And that led us to think through the process of what a group of supporters would do.
You know, they’re sitting in the pub complaining about the ownership of the local football club. How are they going to change it? And we came up with a model, which we piloted with Crystal Palace football club in south London, one of the major clubs in the UK, and we developed a football supporters’ trust. We did the legals for it.
We provided the business plan and the model that could then be replicated in any part of the country. And then we used our lobbying skills to get the government to promote it and provide funding for an agency which is now still going 12 years later called Supporters Direct, which is designed to help supporters to take an ownership stake in the clubs they believe in and are passionate about and want to see succeed.
MS: What happened?
PH: More than 140,000 people have joined these trusts. It has blown me away really. If anything, it was a seminal moment for me because it showed that you can go from and idea into real change just by having the conviction to deliver it on the ground, and from that point onwards I knew that we could do this stuff. If you can get the model to work once, the chances are you can get it to work again in different places.
MS: An interesting policy debate here and part of the election is the National Disability Insurance Scheme. Are there implications or is there potential in that context for public service mutuals? PH: There might be. I hesitate to be too dogmatic about this, because I don’t really know enough about how it is delivered at the moment. But as I understand it, it is a mixture of public sector and voluntary sector and some private sector provision across the country and it is different in different places.
Conceptually there is no reason why a cooperative or a mutual cannot be one of the providers within the diversity of provision. I am not convinced from the short time I have been here and the people I have spoken to that anyone has really thought about provision yet. Everyone is talking about the insurance scheme and they are talking about how you will put the buying power into the end user, but nobody is really thinking about the supply side of this, which is who is going to provide the services.
Now, there are really good examples of disability and aged care services in the United Kingdom which are operated by employee mutuals, such as Sunderland Care Home Associates for example, and there are nurses’ cooperatives. There are all sorts of at-home care businesses which are run as co-operatives. There is no reason why you can’t operate that way. There is one thing I would say to our friends in Australia and that is that these businesses will not be designed and developed by the government.
They have to come from the sector itself, and so someone needs to invest in designing and developing them, because only once the examples are there do you had any chance of replicating them and getting any sort of scale.
MS: We’re nearly out of time. It happens to me every time, Peter. The Zone is about the thinker as well as their thoughts and we have not talked much about you, so I would like to move on to that now and ask you why you do what you do, what your story is and how you got to be here? I know for example that you were General Secretary of the Cooperative Party, so you have been involved in activism and lobbying and policy and, importantly, delivery. Why? PH: I was asked this question about 10 years ago, and I fudged it. I didn’t tell the real answer because I thought it was embarrassing. But I actually want to change the world. And through my little experience I have discovered that you can change parts of the world.
There is a methodology that I have adopted which has worked to a degree. And that is actually very satisfying for me. My political belief at the start of all of this is that I don’t believe in Leninism and I do not believe in Marxism and I don’t believe in liberalism and I don’t believe in any “ism’’ – other than services and businesses should operate for the people.
And in my own small way I have been able to influence how people can get something back out of things that they pay for and things that affect their lives. And I get a kick out of that.
MS: I do not think it is an embarrassing answer at all. I think it is probably one of the best answers that can be given. And I would like to just go into that a little bit. Why do you want to change the world? Is there a sense of inflamed injustice in? Are you concerned about opportunities or outcomes? What is it? Did you inherit from your family or your education as sense of social justice?
PH: I am not a campaigner. And I am not a marcher. If there is an “ism’’, it is egalitarianism for me. It is about equality of opportunity and it is about respecting people, not dismissing them. When we first started this process, a lot of Labour politicians said to me: “you are wasting your time Peter; people in my constituency don’t want to join things, they don’t want to be involved in their school’’.
Well, I would rather hear it from them than from their representative telling me that, because my experience is that if you make the organisation meaningful and relevant to them, they do want to be involved. So for me this is all about respecting people and it’s about giving people an opportunity to play a meaningful part in things that affect their own lives.
MS: The final question to everybody in The Zone Peter is what is the hardest thing you have ever had to do? PH: Door-to-door sales. And I did it in Melbourne. It was 20 years ago. It was another life-changing moment because I was sitting on a park bench, having spent my last two dollars, and I was wondering how I was going to feed myself that evening and still get to Sydney and complete my backpacking trip around Australia.
And I was selling pictures door-to-door and I had not sold one in two weeks. I was rubbish at it. But I discovered that necessity is the mother of invention, and my crisis moment drove me to sell seven pictures that afternoon, go to Topolino’s Pizza in St Kilda, feed myself, buy a bus ticket to Sydney and then complete my tour. MS: May your voyage continue in the same creative and innovative way. I really appreciate your time today Peter, thank you.
PH: Thank you for inviting me.
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