Traditional state-owned model of public services is coming to an end

Going with the grain: organising for a purpose by Cliff Mills


The traditional state-owned model of public services is coming to an end. The search for a new model benefits from reflection on the historical background, and an understanding of the broader context of concepts of public service. Modern mutuals seek both to provide a new basis for public ownership and an organisational model which underpins a redesigned service delivery model aimed at securing today’s desired outcomes.

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There is a danger that the debate about public service reform takes place within limitations which are too narrow for the purposes of a broad ‘reform narrative’. 1 The very phrase ‘public service reform’ tends to limit debate temporally to the period from 1948 to today, and organisationally to a state-owned model of ‘public service’. In this paper we would like to explain the reasons for having a broader perspective. We look at an important example of a development in one sector, social housing, which both draws explicitly upon pre-1948 thinking and suggests a solution in which the state plays no ownership role at all. We would then like to suggest that this approach has wider implications. Whilst we conveniently regard 1948 as the starting point for modern public services, clearly what was taken over by the state in the post-war period had been emerging over many decades. There was already in existence a rich tapestry of provision, albeit a patchy and largely uncoordinated one, which had evolved to meet the needs of mainly poorer people. This rich tapestry was largely based on two powerful traditions, namely, the philanthropic and self-help traditions.

The former, based on the humanity of those who were generous with their time and money, and driven by some personal motivation to care for others, resulted in the establishment of many of today’s leading hospitals; housing, healthcare and retirement provision for those working in the businesses of the great industrial philanthropists; schools established by faith-based organisations; and many of today’s leading charities caring for children and vulnerable adults. The other was the mutual or self-help tradition, in which those living in poverty organised provision for themselves by collaborating within communities to meet their collective needs. This included securing access to unadulterated food at a fair price (the co-operative movement), protection against sickness, funeral expenses, death of the bread-winner and other catastrophes (friendly societies and mutual insurers), and access to finance to build and own their homes (building society movement).2 Self-help was the starting point and engine of all of this, resulting in a 30% share of the retail market, 19 million members of friendly societies and a building society in nearly every town.

But as the modern state assumed a major role as provider from 1948 onwards, these two people- or community-based traditions were substantially sidelined and, in the case of parts of the mutual sector, seemed to be in terminal decline by the end of the twentieth century.3 Weekly contributions to the local fund and community-based problem-solving were replaced by centrally collected taxation and the nation state meeting the needs of its citizens through central or local government-controlled provision.

Currently, the state-owned phase of public service provision appears to be coming to an end. This is driven by economic and political expediency, as well as implicit/explicit criticism of the ownership and service delivery model, which does not contain its own internal mechanism for ensuring sustainability. This then raises the basic question of what form of ownership should replace it, and the search for a new form of ownership for public services continues apace.4,5 Whilst privatisation of providers continues, the private sector’s customer-based model of service delivery poses its own challenges because it is designed primarily to deliver private benefit rather than positive social outcomes. This often results in nothing being done to reduce demand on services (indeed the profit-maximising model is designed to increase it) or out-sourced services that focus on the easier cases rather than more complex ones (in the case of payments by results contracts).

This is the context within which new mutualism seeks to play a role. First, it seeks to re-engage service users as owners. Sixty-five years of state provision have resulted in a mind-set of entitlement and expectation among tax-paying citizens, exacerbated by the introduction of the consumer approach. It is important for citizens to ‘take ownership’ of their needs, and of the ways of addressing them. This includes playing a part in reducing cost and demand. Second, it seeks to engage staff as owners as well, recognising the fundamental importance of their role and the fact that it is more than a job. Third, it introduces a new model of democratic governance that seeks to ensure competent management by those properly qualified to assume that role, but in a context of direct accountability to those for whom the service exists and to those who are delivering it.

Recent developments in social housing provide an illustration of what this means in practice, and how traditional mutual ideas of participation through membership are being used in a modern context to engender a collaborative and co-productive approach. This is also leading the organisation (their organisation) to view itself in a different light and as a catalyst for linking up (integrating) a range of services which are all crucial to the wellbeing and happiness of the local community.

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1 Comment Traditional state-owned model of public services is coming to an end

  1. AvatarMike Riddell (@mikeriddell62)

    Inspirational stuff for the legitimate governance of a peer to peer system. Think a workers co-operative that deals in aggregated and personalised data that is volunteered by its members – where the divi is in direct proportion to the amount and quality of data submitted.

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