Press release

Mutuals get go ahead

A new Co-operatives Bill will provide new rights for public sector workers to create mutuals and own a stake in their success.

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

A new Co-operatives Bill, announced today (19 January 2012) by the Prime Minister David Cameron, will provide new rights for public sector workers to create mutuals and own a stake in their success.

The Co-operatives Bill, to be put before Parliament before the next election, will cut red tape and help to build a fairer economy.

Francis Maude, Minister for the Cabinet Office, said:

Today, the Prime Minister confirmed our commitment to a fairer market, with diverse and vibrant enterprises. This is as vitally important for the public sector as it is for the rest of the economy. The evidence is clear, mutuals can provide better, more efficient public services, and so we are giving frontline staff, across the public sector, real power to make things better.

We have developed new Rights to Provide for public sector workers to create mutuals in health and social care services. In health services alone, employee-led mutuals are already delivering almost a billion pounds worth of services. We will extend these rights as far as possible across the public sector. The new Co-operatives Bill will make it even easier for these organisations to become co-operatives by cutting red tape and helping to build a fairer economy.


Evidence shows that productivity can be up to 19% higher in organisations where staff feel they have a stake in success.

In December, Francis Maude, Minister for the Cabinet Office, launched the £10 million mutual support programme, which will provide business and professional services (such as HR, legal, financial, tax and business planning) to groups of staff or existing mutual organisations in the public sector.

In addition, public sector staff who want to take control of the services they run can access information and support through the new mutuals information service and hotline 0845 5390543.

To empower staff to pursue these opportunities, the government is rolling out new ‘Rights to Provide’ across public services, so that employees can request or bid to take over the services they deliver.

The Department of Health is at the forefront of with ‘Rights to Provide’ in health and social care.

The government is following the progress of 21 pathfinders, supported by expert mentors including John Lewis, A4e, KPMG and PWC, and will address the barriers that can constrain open public services - this includes encouraging public service commissioners to disclose TUPE liabilities at an early stage during a commissioning process or when the Right to Provide or Right to Challenge has been invoked. As public services become more open, the government will keep under review VAT barriers which impede public, private or Voluntary, Community and Social Enterprise organisations, from delivering public services.

My Civil Service Pension (MyCSP), which administers pensions for 1.5 million civil servants, is leading the way in developing the mutual joint venture model. The staff will share ownership of the organisation with a private partner and the government, who will also retain a stake to ensure tax-payers benefit as improvements are made.

Pre-qualification questionnaires (PQQs) for all central government procurements under £100,000 have been eliminated.

Published 19 January 2012