Analysis: The Public Sector Mutuals next steps report

The mutualisation of public services is a key government policy, but is it getting as much support as it needs? David Ainsworth finds differing views

Cabinet Office
Cabinet Office

At last week’s launch of Public Sector Mutuals: The Next Steps, a report by the independent Mutuals Taskforce on how to boost the number of civil servants spinning out their services into mutuals, rank-and-file workers spoke about the benefits they had seen the creation of mutuals bring to their organisations. Staff had more control, more freedom and the ability to respond quickly, they said. All said mutualisation had massively improved their organisations.

But despite evidence that the proposition works, the number of public sector mutuals spinning out is still modest. There are 58 organisations with a combined total of 20,000 staff currently operating, and another 40 organisations on the way. At the launch, Francis Maude, Minister for the Cabinet Office, admitted that the spin-out agenda would take more than one parliament to reach significant size.

Dan Gregory, a consultant working with mutual organisations, says one major problem is that there is little framework to support mutuals in government departments responsible for critical policy areas where most spin-outs have the best prospects, such as probation, youth services and social care.

One of the key recommendations of the report is that by December 2012 "a clear plan and vision" should be in place in five departments, and that by April 2013 those departments should have a "clear pathway for staff wishing to pursue mutualisation".

Gregory says this is an obvious policy that could have been implemented two years ago. Departments must do more than tell people that they’re allowed to create mutuals, he says.

"There needs to be a culture of permission, and you don’t get that by making speeches," he says. "You get it by having a network of enablers and entitlers. You need a group of people in each department whose job is to support mutualisation."

Craig Dearden-Phillips, chief executive of Stepping Out, who has also acted as a consultant to spin-outs, says that support outside the Cabinet Office, particularly the Communities and Local Government department, is better than a year ago, and he feels it can improve further. "A year ago I thought this was disappearing right off the agenda," he says. "Now I’m not as worried."

Ceri Jones, head of policy at Social Enterprise UK, says the biggest barrier for the mutuals agenda is at a lower level, among public sector workers and commissioners.

"There’s a lot of awareness-raising to be done," she says. "And I think the commissioning environment doesn’t support this. There’s support for people later on in the process, but not for those starting out."

The mutuals agenda also faces opposition from those outside the sector who would prefer to see services delivered by public bodies, and who see mutualisation as a cover for privatisation.

James Beecher, a member of the campaign group Stroud Against the Cuts, says that even if mutuals are introduced with the intention of improving services, they often enter a competition process later in which they cannot compete against big private firms with specialist bidders. His group recently blocked the spin-out of Gloucestershire Care Services into a mutual.

Too often, he says, spin-outs are proposed by managers without staff buy-in. In Gloucestershire, 91 per cent of staff said they preferred a standalone NHS trust, he says.

Jones agrees that spin-outs should be launched only when there is buy-in from staff, service users and senior management. "I think that there needs to be proper protection for mutuals starting their first contracts," she says.

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