Press release

£19 million for social enterprises as Department of Health and Cabinet Office join forces to back public service mutuals

This news article was published under the 2010 to 2015 Conservative and Liberal Democrat coalition government

The Cabinet Office and Department of Health have committed to help fund and assist more doctors, nurses and other public sector workers run community-tailored services.

Today the Cabinet Office and Department of Health committed to help fund and assist more doctors, nurses and other public sector workers to run services that are tailored to their local community.

The Department of Health was the first department to give staff new rights to form social enterprises, or mutuals. Now the team from Department of Health will bring their expertise on supporting the development of these organisations as they join the Cabinet Office mutuals team to help roll out similar rights across all government departments.

Alongside this work, the Department of Health is also announcing a further investment of £19 million over the next year for social enterprises, on top of the £100 million already invested by them over the last 5 years. The money will be used to support frontline staff to run services that provide what their local population really need.

On the extra funding, Andrew Lansley, Secretary of State for Health, said:

The NHS is full of people with new ideas about giving patients the care they need. Social enterprises are able to harness these innovations and provide services that will greatly help patients.

We have already seen 600* social enterprises within the NHS offering staff more freedom and giving patients more tailored health care. The extra funding announced today will help roll out more of these services across the health service and shift power and control to frontline workers.

Francis Maude, Minister for Cabinet Office, said:

There is a real pent up frustration among frontline public servants who are fed up with constraints imposed by the monolith within which they are imprisoned. Spinning out into a mutual gives them a chance to do things in ways they know are best.

The team from the Department of Health know how Rights to Provide work and will bring valuable expertise to the Cabinet Office as we roll out these rights across government. Now is the time for entrepreneurial public servants to take the initiative and push for ownership.

Many health services have experienced a range of benefits from becoming social enterprises. For example Inclusion Healthcare, a multi-agency one-stop-shop for homeless people in Leicester, has reported better motivated staff who feel an ownership of the business. Patient experience is enhanced through being able to offer a more flexible, responsive service, like visiting agencies who provide classes in numeracy and literacy skills for working life, plus computer training, art and home economics sessions.

Public sector staff who are interested in forming a social enterprise or a mutual can work with the cross-government team to see if their idea for a service can get support to set up their business. A £10 million ‘mutuals support programme’ has been put in place by the Cabinet Office to help develop the next wave of public sector worker-run services.

The Employee Ownership Association CEO, Iain Hasdell said about the announcement:

It is really encouraging to see this latest move to further integrate the work that government is doing to support public sector mutuals.

It is both the latest part of the infrastructure needed to support the emerging growth in such spin outs, and a good time to reflect on the opportunities there are within some parts of the public sector for entrepreneurial managers and staff to create new businesses in which there is full or a high degree of employee ownership.

Please note this press notice was edited on 08/06/12 to revise the figure of 6,000 to 600.

Notes to editors

For more information on the Mutuals team visit the Mutuals Information Service pages on GOV.UK. Frontline staff can access support from the Mutuals Information Service via GOV.UK or the hotline on 0845 5390543.

Find out more about funds on the Social Investment Business website.

The Employee Ownership Association published the guide ‘How to become an employee owned mutual’ in March 2011.