By Richard Johnstone | 28 October 2014
Government initiatives to integrate public spending are likely to lead to the creation of more public service mutual firms that can bring local provision together, Cabinet Office minister Francis Maude has told Public Finance.
Maude said that the 100 firms spun out from the public sector since 2010 under the government’s Mutuals Support Programme had already been able to integrate services in a way the state could not.
One business, Inclusion Healthcare in Leicester, had taken on contracts from Public Heath England and the local police and crime commissioner, as well as the clinical commissioning group, since being formed from the city’s healthcare service for homeless people, he pointed out.
‘What they were able to do by spinning out of the NHS [and] becoming an independent social enterprise was gain a
huge amount of freedom to do things differently – to innovate, to fashion and configure services around the needs of their patients – in a way they wouldn’t have been able to before,’ Maude said.
‘In terms of localism, that gave them the power, through contracts with different parts of the public sector, to do things which were very responsive to the needs of their patients and service users.’
As government initiatives to pool public service funding expand – such as the programmes to help troubled and at-risk families – the integration role for mutuals would increase, he added.
‘It is more and more clear that [the way] you get real advantage is by organisations, who are not the state, actually carrying out and providing the services. They have much more flexibility about adapting around the needs of the users.
‘It is mutual spinouts, social enterprises, voluntary and charitable organisations, as well as the private sector organisations, who can actually build and configure services around the underlying needs of the users.’
Maude said that the state ‘will always tend to be providing services down particular stovepipes, with much less ability to operate holistically’.
Contracts with mutuals were a measure that allowed funding to be brought together and used more effectively.
‘The state could never do that as the provider. You end up with clunky bureaucratic arrangements,’ he said. ‘But these organisations have the flexibility to grow the services around the needs of the users and deliver it.
‘The money’s coming through different stovepipes but coming into one place, with the same people providing the services.’
