The government has relaunched the civil service pension scheme as a mutual joint venture, partly owned by staff and government and partly by a private firm.
Today’s changes to My Civil Service Pension – the body that administers the pensions of 1.5 million working and retired civil servants – will act as a ‘pathfinder’ for more mutuals, Cabinet Office minister Francis Maude said.
However, the Public and Commercial Services union criticised the plan as a ‘risky experiment’ in the provision of central government services.
Maude said the change would save money and give workers a stake in the firm. The firm has been set a savings target of halving administration costs by 2022.
Under the new structure, the agency’s 500 employees will own 25% of the firm. They will also be represented at board level and have a share in profits.
Other shareholders are pension administrator the Equiniti Group, which has 40%, and the government, which retains a 35% stake to ensure taxpayers benefit if the business grows in value.
MyCSP will be chaired by former work and pensions secretary Lord Hutton of Furness, whose review into public sector pensions led to a range of reforms.
Maude said research suggested that employee ownership could boost productivity by up to 19%.
The government hopes to introduce more mutuals into the public sector, and has set up a £10m Mutuals Support Programme to back public servants who want to spin out their own work into employee-owned firms.
Welcoming the launch, Maude said: ‘We no longer face a binary choice between public services delivered by state monopoly and straight privatisation. That is why I am a passionate supporter of mutuals, which will help Britain grow a more diverse economy.
‘As a mutual, MyCSP will deliver better services for its pension scheme members, millions of pounds of savings for the taxpayer and a real sense of ownership for employees over what they do. We are transforming a neglected back-office operation into a new competitive and responsible business.’
Hutton added that the new mutual would build ‘a powerful partnership that will drive up standards and reduce costs’.
However, the PCS union said that the government had ‘never once asked staff if they want to go down this route’. It branded the move a ‘politically motivated attempt… to privatise more of our public services’.
A union survey of staff showed that 94% of respondents did not believe that turning MyCSP into a mutual would ‘empower staff and drive up performance’.
General secretary Mark Serwotka said: ‘We believe ministers know that the public do not want more privatisation, so they are using mutuals to shield their true aims. This is privatisation by another name.
‘Instead of listening to the people who actually do the job, senior officials and ministers are imposing their unpopular ideas on unwilling staff. They should be investing in public services to make them better, not selling them off for private companies to make a profit.’
