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Privatisation of services ‘opens door for mutuals’

More mutuals should provide a “third way” to deliver services such as health, according to a new report.

The Business Council of Co-operatives and Mutuals (BCCM) paper examines how mutuals such as health insurers can expand or new entrants be encouraged.

“Federal and state governments’ intentions to privatise and outsource public services provides an opportunity for ‘spinning out’ staff-owned public service mutuals as an alternative third way,” the report said.

“These opportunities include large residential centres, group homes, specialist supported living and home care services. This approach has been particularly successful in the UK, with the establishment of more than 100 employee-owned public service mutuals since 2009, employing in excess of 35,000 people.”

The report says there are opportunities for mutuals to expand through incremental growth or development strategies. They can also create joint ventures with similar organisations.

“Large membership organisations, such as those offering motoring services and providing health insurance, have established aged care facilities.

“The ageing population and increasing demand for independent and supported living may provide considerable opportunity for existing co-operatives and mutuals to establish or expand aged care services.”

The report also examines ways to improve awareness of the role mutuals play delivering services.

It says the BCCM should create a website promoting mutuals’ competitive advantage and featuring case studies of their roles in business.

It also calls for research to verify that competitive advantage and ensure governments include mutuals when privatising services.

Australian Unity Group Executive Corporate Development Kimina Lyall says mutuals are inherently suited to delivering public services.

She says mutuals for many years represented the “first way” for delivering services, as people formed self-governing societies.

“In a time when governments are seeking new ways to deliver public services within budget constraints and rising consumer expectations, there is a clear opportunity for an expanding role for the sector,” Ms Lyall said.

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