(When the champion of Public service mutuals is arch Thatherite Frances Maude, the architect of much of the Con-Dem programme of public service ‘reform’, the principles of mutuality co-operation and democracy will always be in question)
In December the business plan for a proposed Public Service Mutual to take over and run community library services in Birmingham will be published. If agreed by the City Council the Mutual could be up and running our local libraries from 1st April 2015.
Pushing mutuals to take over public services is a key aspect of the Con-Dem programme of public sector reform. The promotion of mutualisation comes from the deepest heart of the Conservative part of the Coalition and the £80k cost of developing the Business plan was met by the Cabinet Office. According to the Government ‘Public service mutuals are organisations that have left the public sector but continue delivering public services. Employee control plays a significant role in their operation.’
The tender to support and prepare the move to a mutual was awarded to those well know co-operators Anthony Collins solicitors.
Although the move to set up a library mutual in Birmingham was initiated by a small group of librarians with the wish to protect local libraries, the political intent of the national Government is to break-up public services provided by local Councils.
Local authorities have a duty under the Public Libraries Act 1964 to deliver a ‘comprehensive and efficient’ library service. The key question for the proposed mutual is how ‘spinning off’ community libraries will ensure the future delivery of a ‘comprehensive and efficient’ library service in the city. Further there are significant questions as to how public interests are to be represented within a mutual owned and run by staff on behalf of the Council.
Opening a public debate
Friends of the Libraries of Birmingham believes that the proposed mutual should be the subject of local political debate and that the library using public should be fully informed of the possible implications for their libraries. To start this debate we set out the following issues for the assessing business plan and the Council Service Review when they are published in the next week or two:
1. The mutual, localisation and local democracy
The proposal for the Library Mutual is for ‘an integrated approach through the arrangement of a single entity with a single pooled budget.’ (1) Community libraries are the epitome of a truly local service. Moving Community libraries into a mutual creates a remove from local democratic decision making. It runs counter to the constitutional thrust towards the greater devolution of services in the city and greater responsibility for decisions over those services lying with the Districts.
By operating a single pooled budget how and who will make decisions on the re-allocation of library resources between Districts?
Importantly, will District Committees have a decision as to whether to commission services with the Library mutual or continue to run their local libraries in-house?
2. Accountability for future decisions over local Library services
In the last 4 years, funding for the Potential PSM has decreased by c.£4m and is still decreasing – the Potential PSM has already saved £2.2m from their budget and is looking to save a further £945,000 in 2014/15. (2)
The Mutual is likely to hold responsibility for making ever more difficult decisions on the reducing and cutting library services as its funding from the City council decreases. Accountability and responsibility for decisions to cut services is being ‘out-sourced’ onto a third party. This weakens the relationship between electors and their local Councillors and the ability of citizens to act to protect their valued local public services and for the politicians to respond.
3. Impact of the historic under-investment in the Library estate
‘The current condition of the estate is likely to bring a legacy of repairs – other issues include listed buildings; poor locations; aged stock and; inflexible lease arrangements…
The Parent Body has yet to decide how the Potential PSMs premises/properties will be dealt with going forward – between 20 and 37 buildings could be transferred to the Potential PSM.’ (3)
The legacy of the underinvestment in the library estate is identified here as a critical issue in how many community libraries are transferred by the Council into the proposed library Mutual. A clear statement on the future of those community libraries not transferred into the Mutual needs to be made by the Council at the earliest opportunity.
Further what will be the impact of the number of libraries transferred upon the future viability and sustainability to the library mutual?
4. Developing integrated local services
The integration of local Council services at a neighbourhood level has been a council strategy and community libraries have been at the centre of this move. Bringing in a separate provider to run libraries will create an obstruction to this process of local service integration.
5. Future relationship between the Mutual and the Library of Birmingham
Important strategic management functions for the running of a city-wide library service sit within the Library of Birmingham. There will be significant implications for the library service as a whole by organisationally separating the Community Libraries from the LoB.
Will the Library Mutual be required to duplicate functions currently undertaken by Strategic Library Services and/or will the Library Mutual buy in strategic library services from the LoB?
Could this separation lead to the fragmentation of strategic vision and co-ordination of a citywide Library service including the library of Birmingham and the community libraries?
6. Library users, local communities and the Library Mutual
The stakeholders of community libraries are many and varied. How will wider community interests and those of library users be represented within the mutual and will the stakeholders have opportunities to become members of the mutual?
7. Will the Library ‘Spin-Off’ embody true mutual principles?
Will the business plan propose to create a two tier workforce to make savings by employing new workers on worse terms and conditions than those currently employed? Any strategy of deliberately creating a divided and unequal workforce to save costs is antithetical to mutuality.
According to Guidance from the TUC and Co-operatives UK: Mutuals and co-operatives providing public services should avoid seeking competitive advantage or short term efficiency gains through the depression of workforce pay, terms and conditions. (4)
We have seen that the Council’s proposal for a mutual to take over specialist care services involves denying future care workers entry into the Local government pension scheme as a cost saving measure.
8. Contract management – introducing new layers of bureaucracy?
By taking library services out of the Council will another tier of administration be created for both the Council and the Mutual in how the Districts commission services and manage service level agreements. This has the potential to build in inefficiency and cost combined with the loss of direct democratic accountability.
9. Protecting our Public Libraries for the future?
The move to commission library services via a mutual is a possible first step to privatisation. At the end of the first five year contract with the Library mutual can the Council assure us that these services will not be re-tendered via a procurement process open to competing bids from private library providers.
Conclusion: Fragmentation and inefficiency
The agenda of the Con-Dem Government is to use ‘austerity’ policies to reduce and destroy public provision combined with the further outsourcing of remaining public services. The transfer of public services into mutuals is a political Trojan horse with this objective, whatever local good intentions there are.
The library mutual has the potential to add extra costly layers of bureaucracy to the administration of the relationship between the council and the new provider. More fundamentally the lines of democratic accountability and responsibility over these important local services will be weakened and diffused. The move to ‘spinning out’ Community Library services brings with it the potential for the multiple fragmentation of Birmingham’s existing comprehensive and efficient public library service.
(1). P7 Para 5.2 Cabinet Office Support Provision under the Mutuals Support Programme – MSP Birmingham Community Library Service Invitation to Tender (2014)
(2). P8 Para 6.1 ibid
(3). P7 Para 5.4 ibid
(4). TUC and Co-operatives UK Public Services, Co-operatives and Mutuals Best practice guidance