Government departments to set out plans for public sector mutuals this year, taskforce report says

Julian Le Grand, chair of the Mutuals Taskforce, says resistance to mutuals is mainly from middle-management

Julian Le Grand
Julian Le Grand

Five government departments are expected to have set out their plans to support public sector workers to spin out services into independent mutuals by the end of the year, according to a report published today by the Mutuals Taskforce, the independent panel set up by the Cabinet Office to promote mutuals.

The report says that the Department for Communities and Local Government, the Department for Business, Innovation and Skills, the Department for Education, the Home Office and the Ministry of Justice could all see public sector mutuals set up by workers under their jurisdiction.

The report, Public Service Mutuals: the Next Steps, also recommends that by April next year these departments should have a clear set of policies which anyone interested in setting up a mutual could follow, and guidance for workers’ parent bodies on how to support a request.

The report recommends appointing an "independent arbiter" who can hear appeals from anyone who wishes to set up a mutual but feels they have not been given due consideration by their managers, and who should have the power to overrule managers if a mutual has a sufficiently good business case.

The taskforce found that there were 58 public service mutuals, with another 40 in the pipeline, although the report said there might be others which the taskforce is not aware of. Already, mutuals have a turnover of more than £1bn and are believed to employ around 20,000 former public sector employees.

Julian Le Grand, a professor at the London School of Economics and chair of the Mutuals Taskforce, said at the launch of the report that the biggest barriers to the development of mutuals were "commissioning, procurement and middle-management blockage".

He said that most of the opposition to mutuals came not from senior executives and politicians but from mid-level staff who were concerned about loss of control or the extra workload involved.

Francis Maude, minister for the Cabinet Office, also speaking at the launch, said he wanted to move mutuals "from the margin to the mainstream", and that he believed they were a much more efficient way of delivering services.

Maude said that the taskforce had produced "really good recommendations", but did not say whether his department would formally endorse them as official policy.

He said that at present the development of mutuals support in Whitehall was mixed, with some departments much more advanced in their strategy than others.

Maude said that he wanted to make clear to staff that they were not just permitted to spin out, but would be encouraged.

"We want to say to people ‘you can really, really do it, and you will be supported to do it,’" he said. "This will be a mainstream part of how services are delivered in the future."

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