SA spins off Australia’s first employee-led public service mutual

By Stephen Easton

Tuesday March 6, 2018

South Australian public servants are setting up Australia’s first “employee-led public service mutual” to deliver disability services with the support of the state and federal governments.

The new public sector spin-off will deliver early-childhood intervention services, funded through the National Disability Insurance Scheme.

The SA Department for Communities and Social Inclusion announced that a “highly skilled allied health and support workforce” was transferring from the state government’s Child and Youth Services unit to the new not-for-profit mutual:

“The employee-led mutual will deliver services under a co-operative structure, with members of the organisation pivotal in decision-making. It is expected that the ECEI Grant Agreement will create 50 full-time roles.”

The mutualisation follows a different process in New South Wales that saw the state government privatise its home-care service agency by selling it wholesale to Australian Unity.

Australian Unity is a large mutual but employs the home-care workers under normal staffing arrangements, making the deal more like standard privatisation.

The idea of public service mutuals first arose in the United Kingdom, and has been promoted more in recent years by a new peak body, the Business Council of Co-operatives and Mutuals, which launched in 2014.

The BCCM and the federal government both say the new entity being set up in SA is an Australian first, which is led by former government employees who will staff it and provide services funded by a $47 million grant.

In a statement last month, federal Education and Training Minister Simon Birmingham described public service mutuals as “organisations which operate outside of the formal public sector, but continue to deliver public services led by experienced and qualified staff with strong local knowledge and understanding of the community’s needs”.

“The creation of the South Australian employee-led mutual is an example of the innovation and creativity required to deliver the NDIS, a world-first, ground-breaking scheme,” he said.

Melina Morrison

BCCM chief executive Melina Morrison says this kind of mutualisation is “a better alternative to traditional privatisation” and is pleased that the South Australian and federal governments have listened to the lobby group’s advice.

“This truly innovative move marks the first time in Australia that a government has supported the establishment of an employee-owned social welfare business,’’ said Morrison.

“The South Australian Government is to be congratulated for thinking outside the box and adopting the hybrid, mutual method of delivering these vital services, instead of going down the track of full privatisation.

“I would also like to thank the Federal Coalition Government and commend their bipartisan support of the move by the ALP-led South Australian Government.”

Morrison said staff-led mutuals with a similar community services role overseas had “high levels of satisfaction among workers and the families of children with disabilities, as well as improved outcomes for the children themselves” and claims this is “the way forward” for the delivery end of social services in Australia.

The idea of public service mutuals has plenty of critics, however, because in many cases it has been used as a new label for fairly standard privatisation of public services.

Statements from the two governments and the BCCM offer little detail about exactly how the new public service mutual will be structured in terms of ownership and governance, as the plan has not yet been finalised.

Alan Greig, a director of Employee Ownership Australia, which works closely with the BCCM, told The Mandarin that work was still progressing toward a specific structure and ownership model.

Greig says Central Surrey Health is a good example of a successful PSM in the UK that has been somewhat “influential” in the discussions so far. CSH has achieved strong satisfaction among its customers and its employee-owners, compared to the government-run National Health Service, since it was spun off in 2005.

Read more:

September, 2015: Why the UK’s public service mutuals must be viewed with caution.

January, 2016: What is a public service mutual? Well, what is a public service?

March, 2016: Public service mutuals off the agenda

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