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The devil may be in the detail of government plans to set up mutuals – so do your homework and look closely at the fine print, advises Will Werry Is it just my imagination, or are new government initiatives being announced with less and less of the small print filled in? If so, why the change? I hope it is not because ministers don't even know that there is any small print to fill. In other words, a bad case of what [former US defence secretary] Donald Rumsfeld called ‘unknown unknowns'. Or, at the other extreme, it might be because ministers have already made up their minds about the small print but, like dodgy insurance salesmen, want the punters to sign up for the big print first. In reality, I don't think it's for either of those reasons. I think modern ministers know very well that there is boring small print to be filled in, but they believe it is an inherently-easier job which can safely be left to small print people... like the rest of us. No compliment to us, you might very well say, but we must grin and bear it. The Commissioning Joint Committee, at any rate, is well habituated to trying to pin down who has to do what, in the field of commissioning, to make anything actually happen. The confusion in the case of mutuals is remarkable, even by the standards of modern times, so we felt it might help by publishing a factsheet on the subject on our website as soon as we could. All the details are there at staff mutuals and the right of staff to run services.pdf So, where should we start? Leaving aside the wider questions about expressions of interest in local authority work – we can all read the Localism Bill, which is precise enough, although it leaves many of the trickiest questions for later, when the regulations are drafted. Setting aside, for now, ministers' terminology, even though it is one of the main sources of confusion, it is talk of ‘mutuals' which stimulates the greatest hopes and fears. The crunch point is whether the hoped-for staff mutuals will be given work without competition. Ex-US defence secretary Donald Rumsfeld, famously quoted ‘unknown unknowns' to describe the smaller details in government policies (Pic: Flickr/Gage Skidmore) The answer has to be, ‘don't know', but not very often and, even then, not for long. Don't know, because EU law is, for once, alarmingly vague on the subject. Not very often, because giving anybody contracts without competition will bring flak from thwarted competitors, and all sorts of sceptics. And not for long, otherwise staff mutuals would start to look as if they had been given a divine right to the work. Competition brings up the chicken-and-egg question which most staff buy-outs have always had to address. Which comes first? Winning, buying out whatever needs to be bought out, setting up a new corporate body capable of executing a contract, or getting all the financial backing needed? Each of these jobs is, of course, easiest to do if done last. Unfortunately, the banks insist on going last. They lend only to credit-worthy going concerns, which means having a firm contract for a period of years. Until they win such a contract, will staff have to provide the security themselves, by mortgaging their own houses? Ministers suggest there might be government funding for mutuals, but it is hard to see how this could be justified for mutuals which have to compete with – unfunded –providers. They also suggest that mutuals might avoid having to find the funds themselves, if they are set up as local authority-controlled companies, or join with better-funded partners in joint ventures. Certainly, mutuals could do this, but how mutual would they then be? How much scope for workers' control could they retain ? Accepting a contract always leads to another question – will TUPE apply? A tricky question, which nobody ever wants to answer in advance, but I observe that the answer is almost always yes. The staff in question can be seconded, but TUPE rights are inalienable, and old employers can, at any stage, invoke them by terminating secondment. Staff entitled to redundancy payments then have to look to their own mutuals. Let's look last at what sort of form the staff will take. Ministers have, on different occasions, referred to them as mutuals, co-operatives, social enterprises, and even as charitable bodies. Good, colourful words, all conveying warm fuzzies, but no single body can be all these things at once. Indeed, it would be hard to be any two of them at once. And they certainly won't be mutuals in the ordinary sense of the term, because it usually signifies user-control, not worker-control. The most likely of these four is probably a workers' co-operative, although these do take some time to set up, and have no easy route to funding. Shell companies of some sort, or commercial partnerships, might be more likely. Both lend themselves to conversion into more robust bodies later. My main message to ambitious staff, however, is do your own homework first. Look at the small print before too many of the party become emotionally committed to the project, which usually happens long before signatures have to be put to any of the binding documents which will eventually land on the doormat. Will Werry is chair of the CIPFA-Commissioning Joint Committee

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WHITEHALL

Mutual satisfactions

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