Are government mutuals known knowns, known unknowns or unknown unknowns?

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"[T]here are known knowns; there are things we know we know. We also know there are known unknowns; that is to say we know there are some things we do not know. But there are also unknown unknowns - there are things we do not know we don't know."

He might have been talking about the alleged link between Iraq and the supply of weapons of mass destruction to terrorist groups in 2002, but Donald Rumsfeld , the then United States Secretary of Defense, could have been talking about the UK government's plans for the introduction of government/worker/private-sector  mutuals to run government department back offices and other things.

I have written a few articles about the government's plans to establish mutuals in the public sector and how they will pan out is anything but clear.

They will involve the government setting up joint ventures with private businesses and employees to run things like pension administration in government departments.

I went to a presentation this morning about how these mutual will be used in the public sector and how they might be used in the private sector. It was a good presentation, packed with outsourcing suppliers and end user businesses.

The event was held at the offices of law firm Berwin Leighton Paisner and was hosted by its outsourcing head Mark Lewis. Outsourcing industry veteran Robert Morgan, who works for sourcing consultancy Burnt-Oak Partners gave the talk, which was more of an open debate.

It was good to listen to quite a lively debate on the subject. So much is as yet uncertain about how these mutual will work so this type of debate needs to happen to prepare customers and suppliers for the introduction of mutual style organisations.

For example the first of these, currently being set up, is the My Civil Service Pension (MYCSP). It will administer 1.5 million civil servant pensions, and will be owned by three groups: the 475 staff, the government and a private company that will run the service.
Next month the government is expected to announce the private sector supplier that will be involved.

Speaking at The Crown and suppliers: A new way of working, a government procurement conference in London, Katharine Davidson, director of strategy in the Cabinet Office Efficiency and Reform Group (ERG), said the My Civil service Pension (MyCSP) mutual currently being set up will be the first example of a new way the government will work with suppliers. "Everything is up for grabs and the pie is bigger," she told an audience of 800 representatives from suppliers.

The government's rationale is that mutual are a better option to many outsourcing agreements because the success of the organisation is in the interest of all the stakeholders: taxpayers, staff and the private sector partner.

Many refer to this as the John Lewis style model of employee ownership.

The advantages seem to be the fact that a private supplier can bring with it investment funds to help it set up state of the art IT for example and introduce good business processes. The tax payers will receive a better service without their money being wasted. Meanwhile the staff will work really hard because they own the organisation.

Well that's very roughly how it is supposed to work. When I started writing about it I could tell it was complicated but the more I speak to people the more complicated it gets. This is largely because there are a lot of unknowns (hence my intro). The government has not gone into much detail.

There are lots of different models already in the public and private sector which are similar to what the mutuals might offer.

One thing is certain the government wants to push ahead with plans to do this. Whether it is just a way to privatise on the sly, or a genuine attempt to improve services at lower cost to taxpayers,  the private sector could follow this example.

What do you think?


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This page contains a single entry by Karl Flinders published on February 8, 2012 2:52 PM.

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