Consumer affairs minister Ed Davey has expressed concern about some of the government’s models for public service mutuals, arguing that employee involvement – not simply ownership – will be crucial.

Speaking at a fringe meeting at the Lib Dem conference yesterday, Davey said the coalition “has an ambitious agenda” on mutuals and there will be “lots of things we need to learn from [the Cabinet Office’s mutual] pathfinders before we can have confidence to roll it out more widely.” On Monday, Davey launched a consultation on mutualising the Post Office in his conference speech.

“I’m slightly concerned about some of the ways it’s being done,” he continued. “This is quite a dramatic change; we need to make sure we’re getting the models right.” He added that “engagement with those people involved is really important”.

Davey quoted a study from Cass Business School which found that employee-owned organisations perform better in downturns, and highlighted the importance of employee empowerment. “It is not simply about ownership, it’s also about involvement and engagement; just giving people shares isn’t [enough],” he said.

He also highlighted the challenges of attracting finance for mutuals, and of helping them to secure service delivery contracts. Some new mutuals will initially need three- or five-year contracts, he said, to allow them to get established and provide “reassurance” for members.

Davey said his Post Office proposals have been welcomed by sub postmasters, though not by unions. The Post Office will only be mutualised once its finances are stronger, he said: “No-one wants to join a mutual that’s making losses”

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Written by Suzannah Brecknell, CSW