Nick Hurd, the Minister for Civil Society, has officially launched the first youth services department to spin out of local authority control and become a mutual.
The Epic Community Interest Company, which has 152 staff members with shares in the company and a say in its management, will provide the Royal Borough of Kensington & Chelsea’s youth services.
Its new mutual status will enable Epic CIC to market itself to other organisations to provide youth services. It has already secured contracts with a London health commissioning body and a number of schools.
Epic has signed a five-year, £21m contract to deliver the council’s youth services, which includes running four youth centres.
A spokesman for Epic said all the staff employed by the CIC worked for the council service and none of the department’s staff were made redundant.
The council said its cabinet agreed in July 2012 that employees of its youth service department would form an independent body.
Hurd, who officially launched the CIC at Kensington Town Hall in London today, said: "The entire public sector faces the challenges of reduced expenditure and rising customer demand. To meet these challenges, the government is transforming the way services are delivered by creating an alternative to the old choice of in-house and outsourced delivery.
"We are supporting public service mutuals because we know that letting entrepreneurial front-line staff take ownership of their services results in greater innovation, efficiency, and improved outcomes for young people and communities."
Brendan O’Keefe, managing director of Epic, former head of young people’s services at the council and a Cabinet Office Mutuals Ambassador, said he would work to encourage the growth of new mutuals in the youth sector.