Mutuals need to be effectively promoted across the whole public sector, not just Whitehall, MPs have warned.
The Cabinet Office is making moves to mutualise government services, particularly in the area of shared service IT systems – according to government sources.
Earlier this year, Cabinet Office minister Francis Maude said mutualisation would be the future model of public sector services. “In the wider public sector, mutualisation is a growing movement,” he told Computer Weekly.
But the Cabinet Office programme to promote the use of employee-owned mutuals across the public sector remains isolated from work by the Department for Communities and Local Government, according to the Communities and Local Government (CLG) Committee.
"The prevailing winds may favour mutual and cooperative approaches to delivering local services, but we found far less change that might be expected across local government," said CLG Committee chair Clive Betts.
“Failure to connect these two strands of policy activity betrays an absence of rigour, enthusiasm and understanding that is essential if the mutual model for local service delivery is ever to take off," he added.
In its report, the CLG Committee said that if the government wants mutualism to transform local service delivery it will have to remove a number of significant barriers.
Coordination between the government’s Mutuals Support Programme, the Department for Communities and Local Government and the Local Government Association must be improved to gather and disseminate evidence on the operation of mutuals and cooperatives in delivering local services.
The government must do more to inform and educate financial institutions about lending to mutuals and cooperatives and it must examine tax support for such operations.
Rules must also be drafted to confer maximum flexibility in tendering for services so that mutuals and cooperatives can compete fairly with large companies and in-house providers, the report recommended.
A Cabinet Office spokesperson said the department was working closely with DCLG: “The number of live mutuals is growing rapidly, increasing six-fold since 2010. There’s real enthusiasm in Local Authorities, just last week representatives from 25 councils across the south east got together to discuss the benefits of mutuals with experts in the field..
She added: "We will look closely at how the Committee’s recommendations can help us to take this agenda forward.”