* Paul Gosling is author of 'New Mutualism - A new solution for renewed councils?', which is published by the UK Co-operative Council and the Co-operative Party at £5.
The old Chinese curse wishes enemies to live in interesting times. According to your perspective, local government now faces either interesting or exciting times.
London's campaign for an elected mayor is almost over. Across the country, other major cities are preparing themselves for likely similar contests. Elsewhere cabinet style control is replacing cross-party committees. And, perhaps most significantly of all, the 'Best Value' regime was introduced in England and Wales in April. (Scotland and Northern Ireland adopted the system soon after the last General Election.)
Under Best Value, local authorities have a new duty to deliver services in the most efficient way possible. All services must be fundamentally reviewed, with councillors and officials asking themselves the questions, why are we providing this service?, should we still provide this service?, how shall we provide this service? The outcome is likely to be a much higher level of contracting out of services to the private sector than was ever achieved under the Conservative governments' Compulsory Competitive Tendering.
At the heart of Best Value lies the test of the so-called 'Four C's'. Councils must challenge, compare, consult and compete. Unfortunately, there is no duty on them to abide by a fifth possible C, to co-operate.
Yet co-operation is essential if local authorities are to deliver their obligations under Best Value. To achieve procurement cost savings councils should work together, obtaining economies of scale through joint purchasing and to enable the expertise held by larger councils to be tapped by smaller authorities. Good practice established in one local authority should be shared with all.
Serving the interests of the community
Co-operation can go further than this: it can lie at the heart of improvements to individual services. The golden example is in the London Borough of Greenwich where run-down municipal swimming pools and other leisure services were transferred to an independent not-for-profit co-operative. With board representation from staff, consumers and elected councillors, a broader range of views influenced the running of the facilities. The new co-op was able to save money by VAT exemption, rate relief and avoidance of compulsory competitive tendering regulations, and could apply for funding that the council was barred from.
The outcome has been that instead of carrying out the expected closure of two swimming pools, a further three leisure centres have opened. Turnover has doubled in five years to nearly £6m, enabling grant support from the council to be reduced by £1m.
Many other councils, of all political persuasions, are copying the Greenwich example. Greenwich itself has since externalised a creche to its staff to run. A range of other services are being developed up and down the country involving local authorities and using co-operative and community based management models, ranging from home care to credit unions to football clubs.
Serving the interests of the taxpayers
Local authorities are good at many things, but many are weak in running revenue generating services. Too often councils focus on service supply, overlooking citizens' demands - which can be changing and may require more flexibility than a local authority is accustomed to providing.
Co-operatives can be a better means of meeting consumer choice. They can bring together a variety of interest groups to provide the services that users want, while reducing the costs of delivery.
This does not need to involve externalisation of existing services: it can also mean working with a co-operative to provide new services. When Manchester City Council wanted to provide on-line information services - prior to the development of the internet - it chose as its partner the Poptel co-operative. The local authority was able to improve its communications to targeted groups, particularly developing businesses, and strengthen connections within the local voluntary sector.
Serving the interests of the workforce
For the last 20 years councils have been supporting workers' co-operatives, mostly through co-operative development agencies, as a means of creating jobs in a form of enterprise where profit is distributed to those who generate it. Today the economic climate is kinder than under Thatcher's government, but the principles behind support for workers' co-operatives remain valid.
The Traffic Systems Co-operative was established in 1982 by seven traffic signals engineers made redundant by GEC. The co-op, established with the support of a local authority backed co-operative development service, quickly won contracts with several Northern councils, cutting traffic maintenance costs dramatically. TSC was forced to expand when it had difficulty in sourcing equipment which it had bought from contract competitors. Today the co-op thrives with 32 staff, and designs, manufactures and markets its own street furniture.
Council staff can themselves be helped through co-operative ventures, particularly credit unions. Housing tenants, poorer communities and local authority staff can all benefit from the low cost loans made available by credit unions, which can also support councils' broader political objectives of tackling social exclusion.
This new pamphlet on the role of co-ops in local government has been well received, not least because of the strong interest already felt by many councils in copying the Greenwich Leisure example. There is a real opportunity to build a strong co-operative sector that is linked to local government. And there has never been a better moment at which to do it.