Co-Ops and Mutuals Primed for Public Service Provision: Report

Co-operatives and mutuals are underrated as a potential provider of public services in Australia, according to a new report.

The study, commissioned by the Business Council of Co?operatives and Mutuals (BCCM) and bankmecu and authored by Net Balance, said the models could deliver services cost efficiently and with improved accountability and resource allocation.

Melina Morrison, CEO of the BCCM said that Australia had some very large and highly experienced and successful mutuals that had been delivering a range of community services for over a century.

“It is possible to extend services in the community sector, such as affordable housing, community transport, healthcare, childcare and aged care, into new or existing mutuals and co?ops,” she said.

Author of the report Les Hems said there was potential for existing small service providers to join forces.

“There is potential for government and large non?profit and charity providers to spin?off mutual businesses, which engage service users and providers in control and choice,” he said.

Morrison said debate around public should shift from funding discussions to the potential of alternative models like mutuals and co-ops where service users can be meaningfully involved.

“Who will ‘play’ is just as important as who will ‘pay’,” she said.

“The most costly areas such as healthcare offer the greatest potential.”

The National Health Co?operative, which opened in Western Canberra three years ago has grown to a hugely successful community?owned business with 25,000 members and 24 general practitioners across seven clinics.

Morrison said its growth rate of ten per cent per quarter defied trends and reinforced the cost and implementation efficiencies of the model.

“Eight in ten Australians is a member of a co?operative or mutually owned business, but awareness of the business model is dismal. Our submission to the Government’s review on public spending explains why member?owned businesses need a higher priority in the future provision of public services.”

She said government reviews such as the National Commission of Audit routinely failed to recognise the co-ops and mutuals sector as an important provider in the social care space in addition to the private sector, Not for Profits and charities, despite the fact that in the UK $2 billion in public services is delivered by mutuals.

“There are 1,600 co?ops and mutuals in Australia, the Top 100 have a turnover of $18 billion and they have a combined membership base of more than 13.5 million people. It’s a significant sector,” she said.

Morrison described consumer, worker and member owned businesses as “a perfect marriage of the social purpose of the business with the efficiency of the private sector.”  

“Big ticket policy initiatives like the National Disability Insurance Scheme (NDIS) are supposedly about shifting control and choice to the consumer. Co?ops and mutuals have members rather than shareholders at heart.”

The report also details how co?operatives and mutuals have the capacity to scale?up delivery, something the BCCM said many smaller Not for Profit service providers would find difficult with the NDIS.

Read the full report here.