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Taskforce calls for action to expand public service mutuals

The number of public sector mutuals has increased six-fold since 2010 and they are improving services as predicted, finds a report published by Julian Le Grand and the Mutuals Taskforce.

It recommends actions to make this burgeoning movement a mainstream option for public service delivery.

The taskforce is chaired by professor Le Grand, who is Richard Titmuss Professor of Social Policy at LSE, and formed of leading experts in public policy, employee ownership and business. They examined the barriers facing public servants who form mutual businesses and take control of their services. Their recommendations include:

• Exemptions from EU procurement regulations for new mutuals
• Implementing Rights to Provide, with clear pathways and appeals processes
• Training and guidance for public service commissioners
• Analysis of investment opportunities in mutuals by Big Society Capital

Professor Le Grand said “This is no utopian fantasy. Mutuals deliver higher quality services at lower cost to tax-payers. So it’s with some jubilation that I can report a movement, led by truly entrepreneurial public servants, has taken root and is growing. But we simply cannot rely on there being enough exceptional leaders to make this a mainstream delivery option. The path to mutualisation must be made easier.

“Public service mutuals develop differently to other SMEs, often becoming businesses overnight. This must be reflected in new regulation, new investment and greater support. But, most importantly, we are calling for change inside the public sector. The will to develop mutuals and improve public services is there at the very top of government and on the frontline. But too often there is a gulf in the middle where risk-averse managers, ignorant of the benefits, impede progress.”

Francis Maude, Minister for the Cabinet Office, said: “Frontline staff are the real experts: they know what’s important to the people they help every day. Forming a mutual lets them focus on local needs with less bureaucratic interference. It’s no surprise that as more services mutualise we are seeing real benefits.

“I want to thank all the members of the Mutuals Taskforce for these recommendations.

“We will now consider how to take the recommendations forward but in particular I am already aware of the problems with EU procurement regulations and will push for reform.”

The report shows that since 2010 the number of public service mutuals has increased from 9 to at least 58 with a some 40 projects in the pipeline. In the same time, the services in which mutuals are developing has diversified from four (Health, Social Work, Education and Leisure) to twelve (including Fire Services, Housing and Libraries).

The report analyses some of the emerging evidence from mutuals and finds improvements to the conditions and well-being of staff, as well as improvements to service quality, efficiency and effectiveness.
Improved staff well-being can be evidenced by reductions in sickness absence. Since spinning-out in April 2011, Essex Community Services have reduced the average number of sickness days by approximately 2 days per employee. This pattern is backed up by what staff say. In Central Surrey Health, 98% of co-owners are willing to go beyond what is normally required, well above the 84% industry norm.

There are also numerous examples of improved services and greater efficiency. Hull City Health Care Partnership involved all their staff in an efficiency exercise which saved £600,000. At the same time, they have improved patient satisfaction with 85% rating their service ‘Excellent’ or ‘Very Good’, an improvement of 7% since they spun-out in 2009.



26 June 2012