The irresistible rise of the employee co-operative - myth or reality? 
 
Cobbetts' response to the Government’s Coalition Agreement
 
The Government has made reference to the role of employee and community owned businesses in the delivery of public services in its new programme.  In particular:
 
"We will give public sector workers a new right to form employee-owned co-operatives and bid to take over the services they deliver. This will empower millions of public sector workers to become their own boss and help them to deliver better services."
 
This commitment to co-operatives and mutuals has been viewed with widespread suspicion that cuts in public spending have been designed to force services out of government departments, local authorities and NHS bodies, and the offer to countenance co-operatives and mutuals is a means of talking about privatisation without actually using the word. 
 
Additionally, there have been questions, particularly from the vibrant mutual sector, about what buzzwords such as "employee owned co-operative" or "employee-led social enterprise" actually mean. 
 
Our response by partner Kevin Jaquiss
I do not believe that the Government will place obstacles in the way of viable new employee-led businesses delivering public services. I also know, from Cobbetts' unique experience in the field over 15 years, that the aspirations of employees and the users of public services can be brought together in innovative corporate structures to drive efficiency and performance.
 
The only barrier to a significant change in the way public services are delivered is the absence of readily accessible information about what to do if you are thinking about setting up a new business, such as:
 
• How do you decide whether the business is viable? 
 
• How do you decide what structure to use? 
 
• What are the steps in planning for the business and setting it up? 
 
Many people in the public sector, and particularly the NHS, have never had to think about these issues.
 
It is important to not underestimate the change in approach which is involved in moving from a deficit funded public body to a private business which has to rely on its own resources and balance its books. Both environments are challenging, but the challenges are materially different.
 
Advice
Cobbetts wants to offer its experience of setting up new co-operative and mutual businesses to people in the public sector faced with the threat posed by the present financial climate and the opportunity presented by the Coalition Agreement.  We believe that there are millions of public sector workers who could work together in new and better ways.
 
If you are considering doing something, or think that people you work with should consider doing something, the following are the important first questions:
 
• Is the service one which people need and will continue to need in the long term?
 
• Can the service be improved if staff had a stake in the business?  Would it make sense to engage service users in shaping the services they need?
 
• Is there someone who is prepared to take the lead in setting up the new business?
 
If the answer to these questions is yes, then you should consider a new employee-led business as an option. Speak to the lawyers at Cobbetts as we offer strategic planning services as well as being a full service law firm.
 
We make no charge for a preliminary discussion and our approach to fees for this work is that services have to pay for themselves in savings identified in the new structure.
 
No law firm has more experience of establishing new co-operative and mutual structures and no business is more committed to promoting and supporting new ways of delivering public services.
 
For more information, please contact:
Kevin Jaquiss
0845 165 5494

Two examples of our outstanding work with the public sector:
 
Cliff Mills taking about foundation trusts
 
"From a time even before the legislation was drafted, Cobbetts promoted the idea of using a membership model for NHS Foundation Trusts. We always had a distinctively different approach, recognising the need to support aspirant and authorised trusts in getting to grips with a new form of democratic ownership and with the new world of the NHS in which they are challenged to make hard-headed decisions as an independent business. I was fortunate to be asked to serve on the Department of Health's External Reference Group for governance during the start up phase of the foundation trust project.
 
We have worked with many applicant NHS Trusts since 2003, including district hospitals, specialist or tertiary trusts, mental health trusts, a care trust, and now the aspirant community foundation trusts. We run a learning set for governance leads and trust secretaries, and have introduced a number of NHS Foundation Trusts to the traditional mutual sector to share knowledge and experience.
 
One of our client trusts. South Essex Partnership University NHS Foundation Trust, is demonstrating how engagement with the community can drive success and improve services. The trust has over 10,500 members and is one of only two mental health trusts in the country to have retained its 'excellent' ratings for both quality of services and use of resources in the 2008 Healthcare Commission Annual Heath Check."
 
Ross Griffiths talking about Salford Community Leisure
 
"The former leisure services department of Salford City Council became one of the generation of new mutual organisations in 2003, when it became a society owned by its local community (residents, users of the service, and staff). Having previously been a cost-funded service, struggling to compete for attention amongst other pressing priorities for local government, it has become a thriving, self-confident and expanding business. The board comprises representatives of the users, local residents, staff, the council, as well as one representative from each of health, education, community safety and local employers. The professional management team remains accountable through this board to the local community which it serves.
 
Cobbetts was able not just to support the transition from local authority ownership to community ownership, but also to provide a robust structure and substantial support to the management in establishing the business.
 
It was particularly pleasing to use my past experience of employee buyouts to enable the incumbent managers to grow into the job, showing that local government officers can move into a trading scenario and manage a competitive business in a way sensitive to the demands of customers and local community needs. "