Maude launches pathfinder mutuals

Author: Local Government Chronicle - Aug 12, 2010

A dozen ‘pathfinder mutuals’ in which entrepreneurial public sector staff take control of local services have been announced by Cabinet Office minister Francis Maude.

The pilots include plans in Swindon to integrate community health and adult social services into a co-operative social enterprise and another for employee-led youth support services in the Royal Borough of Kensington and Chelsea.

The pilots will be supported by mentors from business and leaders in employee ownership models. All the mentors have offered their support for free and will work with staff in the pathfinder projects to help develop a range of employee-led services.

The mentors will include staff from the John Lewis Partnership, PWC, KPMG, Tribal, Baxi Partnership, Care and Share Associates, Sunderland Home Care Associates, Central Surrey Health, Local Partnerships, Godrevy, Greenwich Leisure, and The Office for Public Management.

Mr Maude says the projects will help Government establish what type of support and structures will best enable the development of employee-led mutuals, saying it was the first step in creating a ground-up movement “where staff, who are the real experts, can come together to take over and deliver better services”.

He added: “I know that across the country there are literally thousands of front line employees who can see how things can be done better, but at the moment, with the existing constraints, they just can’t get it done. Now this is going to change.”

Westminster City Council’s pilot will explore the potential for setting up an arm’s length organisation for its children’s services department, which could trade or run in partnership with independent organisations.

Children’s services lead Nickie Aiken (Con) said the pilot was part and parcel of exploring ways to deliver higher levels of service with fewer resources.

“We believe that this employee-led mutual’s model could bring significant benefits - from providing better value for money for local taxpayers by reducing overheads to sharing best practice and increasing motivation among staff,” she said.

Alan Downey, head of public sector at KPMG said the mutuals move was “one of the most exciting and bold steps” the government had so-far taken towards public-service reform.

“They will gain the independence to run their mutual exactly as they choose but they will also lose the safety net of state ownership,” he said.

“Just like the entrepreneurs who enter Dragon’s Den, these new owners will need to find ways to make their mutuals financially viable and obtain investment in order to grow.”

Mr Downey said mutuals could compete with state and commercially owned enterprises to deliver public services such as unemployment support, rubbish collection and social care.

“The Cabinet Office’s announcement opens a door through which many of the five million public sector employees could become business owners,” he said.

“These ten pilots which will give public servants the means to generate not just income but wealth through employee-ownership, could fundamentally change the culture of the public sector and reenergise maligned public servants."

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