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MP accuses government of ‘playing at’ reforms that would transfer services to mutuals

The government is "just playing at" reforms intended to transfer more government services to mutuals and community groups, a Communities and Local Government Committee meeting heard yesterday.

Simon Danczuk, the Labour MP for Rochdale, told Francis Maude, minister for the Cabinet Office, and Don Foster, a communities and local government minister, that there had been little progress on measures to support mutuals and to grant new rights to community groups.

"For all the rhetoric, two and a half years into your government there’s very little to show for your proposals," said Danczuk. "There are very few cooperatives and mutuals taking up the cudgels of delivering public services.

"It’s fair to say, is it not, that you are just playing at this in reality?"

He said little funding was provided by the Communities and Local Government department and the Cabinet Office to make the changes happen.

Francis Maude said that Danczuk made a fair point. "Of the total addressable activity, a very small amount has yet been done," he said. "We’re still in the foothills here. But there’s a huge interest."

Maude said that people were deterred by a number of factors, including hostility from their line managers and the lack of security that came with leaving the public sector, but many people were still keen to spin out because it allowed them to achieve what they felt needed to be done.

"I spoke to staff who had previously been employed by a primary care trust," he said. "They said that when they had an idea before, it went into a committee and never came out. It was like dropping a stone down a very deep well – you never heard the splash.Now, they say, they can just do the things they need to do."

Foster said it was too early to tell how the wide range of community rights would be taken up.

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He said that more than 400 expressions of interest had already been submitted – more than 300 of these were from organisations interested in the right to challenge, which gives community organisations the right to submit tenders to take over local government services.


"I think that totally changes the whole dynamic," he said. "But it will take a little time."

But Danczuk said he expected very few organisations would go further than expressing an interest.

Maude said that he had raised the issue of tax breaks for mutuals with the Treasury, but any tax break for these or other social enterprises might have to be accompanied by a statutory definition.

"This is a problem, because you can describe a mutual and identify a mutual much more easily than you can define one," he said.

Maude said he had also discussed exemptions from EU procurement rules for new spin-outs, and that while European commissioner Michel Barnier was in favour of the idea, his staff were not keen. "They feel it would dilute the pure milk of the free market," he said.

Maude said he wanted to reform the commissioning process to make it more effective."It’s generally accepted that commissioning skills are in deficit in the public sector," he said. "The way we do commissioning in this country has been grotesquely legalistic and bureaucratic."

This article was taken from www.thirdsector.co.uk – http://www.thirdsector.co.uk/Policy_and_Politics/article/1149297