Mutuals spun out of government 'have increased turnover by 15 per cent'

Cabinet Office minister Francis Maude says figures from a report written for Big Society Capital show the mutuals are 'raising the bar'

Francis Maude
Francis Maude

Mutuals spun out of government have increased their turnover by 15 per cent and the number of contracts they deliver by 29 per cent in the three years to the end of 2012, according to new Cabinet Office figures.

A report written by the Boston Consulting Group on behalf of Big Society Capital and the Cabinet Office, published yesterday, is based on a study of the 70 emerging and established mutuals known to exist across the UK.

Between them, the organisations have a turnover of more than £1bn a year, and Boston Consulting forecasts an average growth rate of 10 per cent a year in the future.

The study says that staff absence in these mutuals has fallen by 20 per cent since they were spun out, and staff turnover has fallen by 16 per cent.

Francis Maude, Minister for the Cabinet Office, announced the findings in a speech to mutual leaders and policy-makers to mark the first annual Employee Ownership Day.

"Today’s impressive figures show for the first time that entrepreneurial former public servants are raising the bar for competition," he said. "They are winning new contracts, creating jobs and bringing the kind of energy and drive to the economy that Britain needs to succeed in the global race."

Another report, published yesterday by the Mutuals Taskforce, says the government is making good progress on some of the recommendations to increase the size of the mutuals sector a year after they were made.

Julian Le Grand, chair of the Mutuals Taskforce, said that four of the five departments identified in the report had made progress on developing mutuals strategies, but the Home Office had not yet "embedded" mutuals in its policy.

"More work should be done to determine the potential for mutuals in service areas for which the Home Office is responsible," the report says.

It recommends that the government develop a "right to provide" across central government, which would give employees the right to spin out their services.

Previous policy has been that each department should develop its own "right to provide", but many departments have done a limited amount of work on the policy.

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