01 February 2012

MyCSP style over substance?

I have just read an article in the Financial Times about the new "employee owned" privatisation of the civil servants pension fund. As an exponent of worker co-ops and employee ownership should I be happy?

I can't speak on behalf of the movement, but my own personal feeling is best described as 'uneasy'. I have no personal problem moving the means of production from the state direct to the workers (this may well get a lot of bad comments from trade unions, but so be it).  I'm also in favour of experimenting with new models, innovation and the like.

So I'm interested, but also uneasy; there are elements of employee ownership, enough so that if the experiment fails employee ownership will get stained with that failure, Like the Tony Benn's worker co-ops of the 70's, and privatisation of bus companies in the 80's.

But are there enough elements of employee ownership or "John Lewis-style mutual" in place so that this new entity Ministers are poised to launch is a success? Will the employees get a real stake in ownership and control, driving up productivity and customer service? Will it create good jobs, motivated staff and probably most importantly for the Govt. Will it get public acceptance as a more palatable form privatisation, giving workers a more equitable share of the wealth? Lets have a read.

500 staff in the Department for Work and Pensions will leave the public sector in March and become stakeholders in MyCSP, a privately held company that will handle the retirement funds of 1.5m civil servants, disbursing £4bn ($6.3bn) in pension payments each year.
Is it employee owned? 
The MyCSP model, profits will be shared between a private sector provider, which will hold a 42 per cent stake; the government, with 33 per cent; and employees, who will own 25 per cent of the shares. A shortlist of 16 private sector providers has been narrowed to four – Xafinity, Capita, JLT and Wipro.

With a 25% stake I would say no, also its not clear if employees get 25% of the profits (and how this is distributed between employees).

Is it employee controlled?

Clive Bryant, PCS branch secretary in Worthing, said staff would have no real say in the running of the company as they were represented on a shareholder trust by a professional, experienced director, whose position would be advertised, rather than a staff member. The director, advised by employees, would influence decisions over bonuses and charities but would have no control over company strategy. “In reality staff will have an arms-length relationship,” he said. “It’s not as if this is a workers co-op.”

There is an employee partnership council, but information is sketchy, information from PCS the Trade Union is of course bias. If anyone has details of governance and management information I'll be happy to post.

On the face of it I'd say no again.

Will this motivate & empower staff driving up performance?
The Government view taken from Francis Maudes response to a question about consultation with employees is below. Full details here.

Mr Maude: MyCSP is keen to transform its business into an innovative mutual joint venture that offers extensive benefits to employees, customers and the Government.

The Government support this endeavour. Extensive consultation with the employees of MyCSP has been carried out, led by the CEO, including face to face, written and telephone communications. Trade Unions have been consulted and I have met with them personally.

Elections are already under way for employees to sit on the Employee Partnership Council. This body will strengthen the voice of employees and involve them directly in the running of the company.

The view from the Trade Union: "The vast majority of MyCSP members are opposed to leaving the civil service and becoming part of a ‘mutual joint venture’. Ian Pope, PCS DWP group negotiator, told PCS Voice: “MyCSP management has consistently refused to canvass staff views on the decision to move them out of the civil service and into a mutual joint venture. PCS balloted its members in MyCSP and received overwhelming support for action.

Added to that 94% of members in an independent survey conducted by PCS – from a high 55% response rate – said they did not agree with Francis Maude that turning MyCSP would ‘empower staff and drive up performance’.” Full Details here. Their specific response to Employee Partnership Council here.

I'm still interested, but still uneasy.
What do you think?


Sion Whellens said...

Not so difficult I reckon: test it against the co-operative principles, and it falls down at te first fence - the workers don't want it. Butits another instructive example of the arms-lengthing of benefit entitlements and services by the state, using an ideology of 'employee participation'.

Boffy said...

I'm more than just uneasy, I'm opposed. This example shows just what a sham the Tories proposals around the Big Society is. Those of us who are in favour of developing Worker Owned Co-ops should stand alongside the PCS members in opposing this development, or we will end up being tarred with the Tory brush.

Everything you have set out here shows that this is NOT a Workers Co-op, it is a privatisation, pure and simple, with a small amount of worker participation in their own exploitation.

For a Workers Co-op to be succesful workers really do have to own it, and control it. Of course, as with any other business operating within a Capitalist environment, that is not a guarantee of success. But, a Pension Fund has perhaps a better chance than others. However, we should be arguing for all Worker Owned enterprises - including John Lewis, and the Mutual Building Societies - to come together under the auspices of a Co-operative federation in the way Marx and the First International suggested. That would provide all the benefits of economies of scale, centralised, democratic control over investment and expansion, as well as providing a basis for sharing out profits across the whole Co-op sector. It is also a protection against individuals in succesful Co-ops simply cashing in, and enriching themselves by its sale.

But, the fact that the Government has proposed this on the basis of Mutuality should be used by the Labour Movement to demand they actually agree to that. Rather than simply opposing the development, we should be arguing for the workers to have full ownership and control of the new Company, and that the Trades Unions demand the same kind of tranbsfer of ownership and control of ALL workers Pension Funds, and the £800 billion in them.

That would also be the best way of exercising control over Bankers pay and bonuses.

Graham said...

Not clear here where the benefit for the employees lies? They certainly seem to be carrying a good chunk of risk, however. And as you point out, they have precious little, if any, control.
On face of it this could be characterised as a very small step in the right direction, but so small as to be negligible, and risky in that it will be seen by many as a "mutual" or even a cooperative, where in truth is is a very long way from either.

MyCSP said...

Find out more about mycspltd via twitter and on facebook.

Andy said...

Is this a sign of the 'model' we should expect to see more of in the future?

Voluntary membership? No.
Democratic member control? No.
Member economic participation? No.
Autonomy and Independence? No.

On this basis I don't think there was any intention for this spin out to be a 'co-op'.

Perhaps other organisations are more successful at lobbying for alternative models?

2 interesting comments, for me, that John makes: 1) If this fails will this be painted as a failure of employee ownership/worker co-op? 2) The 'bus companies' and their brief spell as employee owned in the 90's - not anymore!