Northern Rock: wasted millions, wasted opportunity

Today the Government has announced that it will sell Northern Rock to Virgin Money for £747 million.

Speaking after the news was announced, Peter Hunt, Chief Executive of the mutuals thinktank, Mutuo said:

“Contrary to some of the reports today, the mutual sector engaged fully with the Government in relation to Northern rock and we are disappointed that a mutual solution hasn’t been found. Northern Rock couldn’t remain nationalised indefinitely, but by taking a longer-term view the Government could have demonstrated its commitment to mutuals and secured a better return for the taxpayer’s £1.4bn original stake. The reluctance of the Government to publish its critique of the mutual option leads us to believe that remutualisation was never under serious consideration.”

Read report on the remutualisation of Northern Rock



Notes to editors:
1.  Mutuo stated in June that the Government should properly examine the mutual option before a sale.
2. To read a report on the remutualisation of Northern Rock, click here: The remutualisation of Northern Rock – July 12 2011

Mutual Business Detector: How to decide which public services could be mutuals

Co-operatives and mutuals were given prominence in the Coalition Agreement as a means of transforming the way public services are delivered. This reflected an existing direction of travel for Government policy; the previous Labour Government had directed and encouraged the establishment of NHS Foundation Trusts and co-operative trust schools and all three major parties had expressed enthusiasm for cooperative and mutual structures in their manifestos.

Read more Mutual Business Detector: How to decide which public services could be mutuals

Fostering Diversity: Promoting Mutuals

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How can the Government best develop a policy strategy to implement the Coalition’s commitment to promote mutuals?

The Group accepts that the Coalition Government has been in power for just over a year and so there are limitations to how easily one can gauge their success in promoting mutuality over such a limited period of time. However, from the evidence given to the Inquiry, it is clear that the Government has not yet developed a clear strategy to promote mutuals.

The Inquiry found that the Government appears to have concentrated its policy efforts on encouraging the development of new mutuals to provide public services rather than to support the existing financial mutual sector.

Read more Fostering Diversity: Promoting Mutuals

Mutuals Yearbook 2011

Mutuals Yearbook 2011

The current economic and political imperative is to promote ways of organising finance, risk, public service and enterprise, that are both dynamic and responsible at the same time. For a while, ‘social enterprise’ appeared to offer a third way, between state and market; today, we’re told that it is the ‘Big Society’.

Regulators and policy-makers are seeking principles via which to distinguish the ‘socially useful’ parts of the private sector, from those which seek only to inflate private earnings as fast as possible. Mutualism adds much-needed clarity to all of this, by offering well understood, viable organisational structures, that are entirely alien to both Whitehall and the deal-makers in the City.

Read more Mutuals Yearbook 2011

Social Housing: Made Mutual

Social Housing: Made Mutual

Over recent months, RBH has been working with tenants and employees to develop a new ownership and governance model for the future of council housing in Rochdale.

The vision is based on co-ownership, with tenants and employees as members, to build into the fabric of the organisation a sense of shared priorities and working together. Read more Social Housing: Made Mutual

Community Health Services: Made Mutual

NHS community services are undergoing a seachange. These fundamental services which rarely attract the headlines – including health visiting, midwives, rehabilitation, community and specialist nursing, therapies such as speech and language, physiotherapy and podiatry – account for about 10% of NHS expenditure.

As part of the Coalition Government’s plans to create the “largest social enterprise sector in the world”, a significant number of community health service providers are being separated out from Primary Care Trusts and established as independent social enterprises.

Four of these new providers, which are featured in this publication, have been set up as member-based organisations, with democratic governance, and a professional board of executive and non-executive directors. As independent trading organisations, they need to operate in a business-efficient way and to make a profit (income exceeding expenditure) in order to survive; but they exist to provide services for the public benefit, not to trade for private benefit.

Although they are no longer state-owned and controlled, they are constitutionally and culturally committed to providing services for the public benefit, according to traditional NHS values and principles. They are led by people who are convinced that this is the way to secure the long-term future of NHS services.

These new organisations are not yet well-known or understood; but they are examples of the future of public ownership.

Read ‘Community Health Services: Made Mutual’

Fostering diversity: Promoting Mutuals

An All-Party Parliamentary Group has called on the Government to urgently set out a plan for how it will foster diversity in financial services, as promised in the Coalition Agreement. Published today, the report, ‘Fostering diversity: promoting mutuals,’ reflects the findings of an Inquiry conducted by the All-Party Group over the past six months. The Report considers how Government and Regulators have acted in the light of the Coalition Agreement pledge. Read more Fostering diversity: Promoting Mutuals

Coalition does not have a credible plan to promote mutual business

Mutuals Yearbook 2011Leaders of the mutuals sector have today said that the government must do more to promote mutual forms of business.

Speaking ahead of the 2011 Mutuals Forum, Peter Hunt, Mutuo Chief Executive said:
 
“The Coalition Agreement promised to ‘foster diversity and promote mutuals.’  So far, there is little evidence of a coherent Government plan to do this.  At the same time, the Mutual sector is the strongest it has been in many years. It employs over a million people and turns over more than £110 billion annually. It’s clear to us that the government needs to work much harder in this area if it is to honour its commitment.” Read more Coalition does not have a credible plan to promote mutual business

Punk Finance: Capital Made Mutual

Punk FinanceThe current policy interest in mutuals presents a significant opportunity to develop and extend  the sector in a range of business and public service areas.

As government accelerates the process of public sector reform, there are likely to be many new stakeholder led mutuals established over the coming months and years.   At the same time, there remains a need for a greater understanding of how mutuals work, and  where they can be appropriately applied. New  entrants to the sector need to learn from the experience of others and to construct their new mutual with care.

Read more Punk Finance: Capital Made Mutual

Growing Mutuals sector gathers momentum

Britain Made Mutual - Mutuals Yearbook 2010The Mutuals Yearbook 2010 published today confirms that the mutual sector is growing in strength, even during challenging economic times.

In a year which saw a crisis of ownership in a range of areas from financial services, to football, to foreign takeovers, the mutual model continues to provide a successful alternative. The report shows that mutuals are being established in new areas, and that the gross annual turnover of UK mutuals in 2010 exceeded £100 billion with the number of people employed in the sector topping one million, both for the first time.

Read more Growing Mutuals sector gathers momentum

Post Office should be mutualised, new report says

A new report by Mutuo, the leading mutuals think tank, advocates the mutualisation of the Post Office as a way of harnessing the energy, skills and enthusiasm of the Post Office’s customers and employees.

The new report, entitled Post Office: Made Mutual supports measures set out in the Government’s Postal Services Bill which advocates the transfer of Post Office Limited (POL) to a mutual organisation.

The report welcomes this radical new approach to public services but it is clear that before POL can be transferred to any different corporate body, it must first pass the test as a sustainable business.

Read more Post Office should be mutualised, new report says

Oxford University report: Mutuals deliver economic stability

An Oxford University report is calling on the coalition government to promote mutuals in order to aid economic stability in the financial system.

The report, to be launched at all three major political party conferences, argues that a stronger mutual sector would promote effective competition and mitigate against systemic risk. It urges the government not to return to the ‘business as usual model’ for the financial services sector, which proved such a risk to the economy.
Read more Oxford University report: Mutuals deliver economic stability

Public Services: Made Mutual

This publication is the first in what will be a series of pamphlets looking at the potential for new mutual organisations providing a range of services to the public.

Our objective is to highlight where high quality mutuals can combine business efficiency with accountability to customers, staff and other stakeholders. Read more Public Services: Made Mutual

Mutuals Manifesto Launched

Gordon Brown, David Cameron and Nick Clegg have today been challenged to lay down their plans for growing the mutual sector.

In recent weeks there has been a flurry of speeches and statements by the parties about their support for co-operative and mutual initiatives.

Today the mutual sector has responded with its plans for putting people at the heart of business and society in the first ever Mutuals Manifesto.

The Manifesto calls for more businesses to belong to their customers, more employee owned firms and more community led public services.

The next Government should commit to:

* Ensure that mutuals receive equal treatment with plcs by:
– Establishing a Government office for mutuals with a designated Minister for Mutuals
– Committing to update mutuals legislation

* Make sure that Regulators act in a way that respects diverse forms of ownership by:
– Altering the terms of the Financial Services Authority to make it sustain a full range of business types

* Promote mutual ownership as a way of serving the public interest by:
– Evaluating the return of Northern Rock to the mutual sector
– Establishing a unit to convert public service providers to mutuals
– Supporting the Commission on Ownership

Mutuo Chief Executive, Peter Hunt, said:

“The nature of the recession has meant that fundamental questions are being asked about the way businesses are owned and how our economy is structured.

The Government must be responsible for ensuring that people have a choice about who they do business with. Mutuals exist to share the rewards of enterprise with those that earn them; there are lessons in this for how we structure business and our community more widely.

It has been good to see politicians talking about mutuals in recent news but we now need to see political parties take action to help build a stronger and more vibrant mutual sector.”

View the Mutuals Manifesto 2010

Funding the future: an alternative to capitalism. By Cliff Mills

The UK economy – as with most economies in the developed world – is largely driven by businesses that are owned by investors and for many decades, the profit motive has been its driving-force. While this ownership model provides a powerful driver, it also creates a problem. Being effective at delivering private benefit is all very well, but an economy based on the quFunding the future an alternative to capitalismest for the private benefit of some does not seek the common good of all.

Trading is probably the one single activity which has the most impact upon people’s every day lives, upon human relationships, upon the physical environment and upon the natural world. So the underlying purpose of that trade – what it is actually for – is of fundamental importance. What trading organisations are designed to achieve, what drives them and the way in which they are owned and governed, have a deep impact on today’s world and how our society is organised and governed.

This is even more significant when seen in the context of today’s global issues – diminishing natural resources, climate change, and global poverty. It makes little sense to attempt to solve these problems without acknowledging that the pursuit of growth and the maximisation of private gain might at best hinder these endeavour, and at worst be a major part of the problem. There is now an urgent imperative to find a different and fairer basis for business – and for business ownership – that does not ignore today’s social and environmental concerns.

There are clear past and present-day precedents for businesses trading for the public benefit, driven by self-help and community support rather than by narrow self-interest. Although such precedents are a long way from being mainstream, these alternative ownership models are being developed to meet today’s needs.

This is not a call for a new programme of re-nationalisation. Instead, it is an argument for greater community-based business ownership and the active engagement of a wider group of interests in owning and running socially-relevant enterprises. Significant change will only happen if there is a social movement with sufficient support to make it happen. If we want change, then it is for us – not governments, markets or institutions – to bring about change.

Read ‘Funding the future: an alternative to capitalism’

What is the role of the Governors of an NHS foundation trust?

These are still early days for foundation trusts – or “public benefit corporations” as the Health and Social Care (Community Health and Standards) Act 2003 calls them.

Curiously, this Act created a completely new corporate structure in the context of health legislation. Although now approaching three years old, these novel corporate entities are mere striplings beside their more elderly colleagues, companies and mutual societies, which have been around for 150 years or more and are still evolving. Read more What is the role of the Governors of an NHS foundation trust?