Mutualism makes private sector organisations more attuned to the common good, but equally makes public sector organisations more attuned to particular private interests.To see the problem, take this from the the Tories statement:
Government would negotiate a tariff or payment-by-results contract [with the co-op] – based on national standards – for the desired services and outcomes expected, which would provide incentives for staff to provide better services at better value.But what if these results and standards are badly defined?
Take for example primary schools - the proposals don’t seem to apply to secondary schools - though I fear my point might apply to public services generally. Let’s say the school’s results are measured by the proportion of children achieving level 4 in KS2 tests.
Teachers can increase this proportion in several nefarious ways; intensive coaching just before the test; narrowing the curriculum to the bear minimum; and concentrating their effort upon pupils on the margin of levels 3 and 4, and ignoring both the brighter and less able pupils.
Now, if teachers don’t have incentives to “provide better services”, some might not bother with these games. They might figure: “It’s no skin off my nose if the school misses this silly target. I’ll do proper teaching instead.”
If, however, the school becomes a co-op, the teacher’s reasoning changes, at the margin. Her pay now becomes dependent upon gaming the system. Worse still, because her colleagues’ pay also depends on it, she faces peer pressure to play the game. The result could be that co-ops actually displace knightly motives and encourage knavish ones. Results might improve. But teaching won’t.
It’s here that analogies with John Lewis break down. At John Lewis, the interests of customers and staff are aligned, because it operates in the market place. Tory proposals, however, seem to envisage co-ops in markets where the state is a monopsonistic buyer. This aligns workers’ interests to the state’s interests - but perhaps at the expense of the public’s interest.
I fear, then, that this is statism with a human face, rather than genuinely, properly, radical change.