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Mutuals missing Government targets

While the number of public sector mutuals has risen from nine to over 50, it still falls short of Government targets. A new report, commissioned by the Cabinet Office, has analysed the mutuals that have been set up since 2010.

The Government aims to have a million public sector workers owning their own mutuals by 2015, but so far only 50,000 have done so. There are now 58 mutuals, with 40 projects in the pipeline.

The services in which mutuals are developing has diversified from four – health, social work, education and leisure – into 12, including fire services, housing and libraries.

The report was compiled by the Mutuals Taskforce and demonstrates improvements to conditions and wellbeing of staff, as well as in service quality, efficiency and effectiveness.

However, Julien Le Grand, professor of social policy at the London School of Economics and chair of the taskforce, acknowledged the barriers to creating mutuals in the public sector.

He said: “There’s this granite layer of middle management which can just veto proposals and that is why giving employees a right to form a mutual is important. Then once you have formed a mutual and spun it out of the public sector then you need to exempt them from competing with Serco or Capita for the first few years. For example they can’t raise cash for a bond that some government contracts require. It’s nothing for a corporate.”

Le Grand added that 25% employee ownership should be a minimum for new mutuals: “I would like a substantial degree of employee ownership with government or users also having a stake.”

To view the report, visit:

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