Francis Maude, Minister for the Cabinet Office, has predicted that as many as a million public sector workers could transfer to mutuals by 2015.
Speaking to Public Finance magazine in advance of the government’s public service reform white paper, which is likely to be published next month, Maude said it was "ambitious" but "not inconceivable" that one-sixth of public employees could be spun out into mutual organisations.
And he said that there were few areas outside the armed forces and the police where public employees would not be able to mutualise their service.
He said the Cabinet Office was looking at whether mutuals could be launched as joint ventures between state employees and existing third sector organisations, or between employees and the government.
A Cabinet Office spokesman said the department had received more than 200 calls to a hotline provided to help people set up mutuals, and civil servants had also fielded inquiries.