Ivan Broussine: Co-operatives are finding new role in 'Big Society'

Could co-operative business models - owned by multiple stakeholders such as employees, service users and government - provide the solution?

The coalition government, champion of the "Big Society", certainly believes so and has just helped to launch the Mutuals Information Service to drive this vision.

It is a new signposting service for public sector staff interested in setting up staff-owned mutuals or co-operatives that go further by engaging service users as well.

In practice this might mean ownership of hospitals, schools, homecare providers and other community and public services being widened to include patients, parents, employees and other interested parties, as stakeholders.

They would have a say in decision-making and strategy, while assets such as property and equipment would continue to be owned and leased out by the government or public authorities.

The Mutuals Information Service is a partnership between the Cabinet Office, Local Partnerships (a joint venture between the Treasury and the Local Government Association), the Employee Ownership Association - the voice of co-owned business in the UK - and Co-operatives UK, the national trade body for co-operative enterprise.

At Co-operative Development Scotland, we have seen increasing interest in these shared ownership models in the private sector and will be helping our partners at the Mutuals Information Service manage new inquiries from the public sector in Scotland.

A subsidiary of Scottish Enterprise, CDS was set up to increase the contribution of co-operative, mutual and employee owned business models to Scotland's economy and has seen a 350 per cent jump in inquiries during the last two years. We are currently advising 250 potential new co-operative or employee-owned businesses and have helped to establish over 20 new co-operative businesses in the last six months, a record since we were established in 2006.

Interest in these alternative business models is now expanding rapidly across the public sector. Budget cuts are forcing politicians and policymakers to find better ways of delivering public services. A growing body of evidence suggests that alternative service delivery models which are closer to customers and workers could improve morale, engagement and productivity while reducing costs.

For example, The Innovation Unit, which specialises in public services strategy, cites that employee-owned companies providing public services in the UK report far lower levels of staff turnover compared to sectoral averages, alongside good levels of user and community engagement.

Despite Britain being the birthplace of co-operatives, we're really only at the start of this journey of developing alternative public service delivery models.Hardly a day goes by without a politician referring to the "John Lewis effect", but there are already many more case studies to learn from.

The learning curve will be steep - the mutualisation of public services is particularly complex and requires specialist legal and financial advice, notably in areas such as transfer of employment rights and the creation of a framework that enables the new business to tender for external contracts. Workers and public agencies have themselves to see the benefits and come on board.

However the potential benefits are huge - including improved responsiveness to customer needs and more efficient, sustainable service delivery with better outcomes.

In short, co-operative and mutual business models offer a powerful way to partner the skills of front-line professionals with the enthusiasm and energy of citizens - for everyone's benefit.

• Ivan Broussine is the advisory board chairman of Co-operative Development Scotland.