Mutuals given go-ahead as Cabinet Office confirms initial pilots

11 Aug 10
The first wave of John Lewis-style ‘employee-owned’ public services were given the green light by ministers this week.
By Vivienne Russell


12 August 2010

The first wave of John Lewis-style ‘employee-owned’ public services were given the green light by ministers today.

The Cabinet Office announced that 12 ‘public service spin-offs’ would pioneer the mutuals initiative. This will involve entrepreneurial public sector workers joining together, often across organisational boundaries, to establish co-operatives or social enterprises.

Among the 12 ‘pathfinders’ are a social enterprise to be formed by NHS employees in Leicester, which will provide joined-up services for homeless people, and a co-operative in Swindon that will bring together community health and adult social services.

All the pilots will be supported by expert mentors, including staff from the John Lewis Partnership and consultancies KPMG and PricewaterhouseCoopers.

Launching the initiative today, Cabinet Office minister FrancisMaude said it would be a ‘genuinely ground-up movement'.

He added: ‘I know across the country there are literally thousands of frontline employees who can see how things can be done better, but at the moment, with the existing constraints, they just can’t get it done.

‘This is a Big Society approach, decentralising power so people can deal with the issues that concern them. We must not be afraid to do things differently if we are to provide better services for less money.’

Charlie Mayfield, chair of the John Lewis Partnership, said the company was ‘delighted’ to offer its insight and expertise to the public sector.

‘Being employee-owned is an approach that has served our business well for over 80 years. Whilst not a guaranteed solution to today’s challenges, the strengths of an employee-led model – such as an empowered and informed workforce and a close level of alignment and motivation between managers and employees – has helped us create a strong culture of trust, innovation and customer service,’ he said.

Alan Downey, head of public sector at KPMG, said the move towards mutuals was bold and exciting. ‘Imagine a world where mutuals compete with state and commercially owned enterprises to deliver our public services like unemployment support, rubbish collection and social care,’ he said.

‘Entrepreneurial employee-owners could find new ways to deliver public services today and design new public services for the future. Their success will depend on the determination and imagination of their new owners.’

 The pathfinders are:

•    An awarding body setting up as a mutual by a consortium of further education colleges;

•    The London Partnership – creating a ‘reducing multiple disadvantage’ community interest company from a group of Department of Health, local authority, primary care trust and NHS staff;

•    The Department of Health’s London and SE Learning Disability Team forming a regional Community Interest Company;

•    Hammersmith and Fulham children’s services exploring new models of delivery with staff, possible commercial partners and neighbouring local authorities;

•    North East Essex PCT spinning out into a community interest company;

•    The creation of a social enterprise for delivery of housing support services to vulnerable people in Mansfield, bringing together a range of public sector workers;

•    The Lambeth Resource Centre exploring options for co-producing services with employees, service users and third sector organisations to provide rehabilitation support for people with physical and sensory impairment;

•    NHS employees forming a social enterprise to provide joined up services for homeless people in Leicester;

•    Teaching and administrative staff planning to set up a trust to run Newton Rigg Agricultural College in Cumbria;

•    The Royal Borough of Kensington and Chelsea working with employees to examine the potential for different models of employee led youth support services;

•    Integration of community health and adult social services in Swindon into a co-operative; 

•    Westminster City Council working with employees in children’s services and neighbouring local authorities to move towards creating an arms-length mutual organisation.

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