Broadly speaking, these concepts break down into three models:
- cooperatives and mutuals, which are owned by their members, such as credit unions
- social enterprises, which are businesses operating for social ends, for example the Big Issue
- employee ownership organisations, which are owned by their employees as opposed to members, of which John Lewis is the best known example.
A well-known social enterprise in the health sector is Central Surrey Health – a limited liability company that is also not-for-profit. Staff receive a 1p share in the company, but do not take profits as dividends. Any surplus is reinvested back into the organisation, for the purposes of staff or organisational development.
Alternatively, all staff employed in the John Lewis Partnership are considered as 'partners' and are entitled to a share of any company profits.
Political discussions around these issues have not focused on exactly which type of model would work for the NHS, but there seems to be agreement that employee ownership could be used to engage NHS staff and give them greater ownership and control over their work, the delivery of services and how the organisation is run.
The Labour party pledges in its manifesto to create a 'shareholding society', in which employee-owned companies would play a greater role in the economy. Under Labour, NHS organisations have a right to request setting up as a social enterprise and Labour also published a 'mutual manifesto' earlier this year, which supports the greater use of mutuals in the public sector. However, alongside this, Labour's preferred provider policy favours existing organisations, and a commitment to ensuring structural stability.
Labour claims that empowering the NHS workforce is central to their agenda: through the development of more autonomous clinical roles and opportunities for staff to operate their own services; through social enterprises; or through a strengthening of the freedoms available to foundation trusts through service line management (the management of specific clinical areas within hospitals as distinct operational units).
While he has been a strong supporter of mutuals, at our health hustings event last week, Andy Burnham claimed to be 'lukewarm' regarding employee ownership, stressing that such innovation needs to be driven from the bottom-up, rather than mandated by central government. He also warned about empowering professionals at the expense of disempowering the public.
Both the Conservatives and the Liberal Democrats are enthusiastic about expanding employee ownership models in the public sector.
In their manifesto, the Conservatives plan to establish a public sector co-op service, to help public sector organisations move towards this organisational form. They say this model will allow greater freedom to innovate, drive down costs and improve morale and efficiency.
Andrew Lansley stressed at the health hustings event that staff engagement and employee ownership do not necessarily conflict with empowering patients. The Conservatives also hold that Labour's commitment to the NHS as preferred provider prohibits these types of employee ownership models.
The Liberal Democrats are similarly supportive of expanding employee ownership in the public sector, but warn of the need for research into the benefits of these models first. They say that some current aspects of the system, for example the need to maintain NHS pension rights, inhibit the expansion of new organisational forms across the health and public sectors.
Norman Lamb is right to point to the need to explore these issues further. There is a lack of clarity or consensus regarding the benefits of such models or how they might fit into a marketplace of health care providers. There are also concerns that establishing the legal framework to allow this to happen may be so technically complicated and resource intensive that it would inhibit any other benefits that the model may bring.
The experience of Central Surrey Health – where it has taken considerable time and resources, as well as the dedication of two committed directors to realise the benefits – highlights the investment that is required to implement this model and see it make a real difference for staff and patients.
The danger of increasing discussions of a generic 'John Lewis model', is that employee ownership will be the latest fad or fashion, and mandated on a wide scale with little consideration of the context in which it's being implemented or of the necessary foundations for ensuring its success.
Norman Lamb is right to call for more research into the benefits of models of employee ownership, with particular emphasis on how, where and under what circumstances this might improve quality and reduce costs in the NHS.
For more comment and analysis: Transforming NHS provider services through social enterprise