Pete Jefferys explains why Circle Healthcare is not a mutual, and shouldn't be described as such. It is out to make a profit for its owners.
Pete Jefferys is policy and campaigns officer at the Co-operative Party
‘Private firm to run NHS hospital’ screams the Guardian headline. Accurate, but not the way the coalition is spinning the news that Circle Healthcare has won a billion pound contract for a Cambridgeshire Health Care trust.
Today you will hear repeated mentions of ‘mutualism’ and ‘employee owned’. Indeed, journalists are being briefed that Circle is what ministers regard as a model mutual – a ‘John Lewis’ approach to public services. Circle even provides information, via the Cabinet Office’s mutual helpline, about setting up new healthcare mutuals.
Circle is not a mutual. Indeed, it stretches the term slightly to call John Lewis a mutual (rather than an employee owned partnership). Circle Healthcare is minority owned by senior clinicians – not all of the hospital staff – and majority owned by private backers, including major Conservative Party donors. It is a listed business with the primary purpose of turning a profit, rather than delivering benefit to its members (let alone patients).
To use the term “mutual” in the same breath as “Circle Healthcare” is crass misrepresentation. It is a discredit to the century and a half development of the co-operative and mutual movement, which grew from working people pooling their resources to benefit themselves and their communities, intimately entwined with the labour and trades union movements.
The close relationship between the labour and co-operative movements is embodied by the 29 Labour Co-operative MPs and hundreds of Labour Co-operative local councillors.
The Co-operative Party has been warning for some time about the coalition’s sloppy use of the language of mutualism, of which Circle’s entry into the NHS is a clear example.
We have been warning of ‘Trojan horse privatisation’: the coalition using the language of co-operatives and mutuals to hide the reality of private sector entryism.
One of the government’s own advisors on mutuals warned this week that the developing approach to tendering public services would favour large private companies such as Capita and Veolia over staff or community owned mutuals. Indeed, we have already seen one employee owned healthcare mutual, Central Surrey Health, lose out on a major NHS contract to a subsidiary of the Virgin group.
Crucially, Trojan horse privatisation could do great harm to the co-operative and mutual movement. If the public start to associate companies such as Circle with mutuals then, should Circle fail patients or staff, there could be great damage to the hard-won image of our movement. Circle’s financial difficulties and those of the trust they have taken over have already been reported and so the spectre of Southern Cross and asset-stripping looms large.
Genuine mutuals can and do provide fantastic public services. Co-operative trust schools, established under Labour, are maintained secondary schools with a democratic governance structure which teach co-operative values and ethos within the curriculum. When the principles and models of co-operatives are properly applied, there are clear benefits for all members: staff, service users and the community.
The coalition’s championing of companies such as Circle, under the guise of ‘mutualism’, is a disservice to the mutual and co-operative movement and a cover for the reality of private sector takeovers. Mutual sector leaders are already publically stating that the Coalition does not have a credible plan to promote mutual businesses, it is crucial that we also expose their “mutualism” agenda for public services as hollow.
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