Press release

New rights and support for staff mutuals

Employers will be expected to accept suitable proposals from front line staff who want to take over and run services as mutual organisations.

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


The government is set to roll out new “Rights to Provide” across public services so that employers will be expected to accept suitable proposals from front line staff who want to take over and run their services as mutual organisations, Francis Maude, Minister for the Cabinet Office announced today.

Prisons, Sure Start Children’s Centres, hospitals and the civil service are just some of the services in which professionals could soon take power from Whitehall bosses and have the freedom to do things better. Evidence shows that when employees have a stake in their organisation absenteeism plummets and productivity soars by as much as 19%. Services will also be answerable to the people who use them, not a distant official.

In a landmark speech at The Royal Borough of Kensington and Chelsea, where staff are developing plans to mutualise youth services, Francis Maude also unveiled new support for public service ‘spin-outs’ building on the Government’s Pathfinder programme. Including:

  • over £10million to help the best fledgling mutuals reach investment readiness;
  • a new information line and web service for interested staff, provided by Local Partnerships, the Employee Ownership Association and Co-ops UK; and
  • a ‘challenge group’ involving employee-ownership experts including, John Lewis Partnerships, to investigate ways to improve regulation. 

In addition, Francis Maude, announced a new member of the Government’s Pathfinder programme. Circle Healthcare, an employee-owned social enterprise and Europe’s largest partnership of clinicians will join the programme giving 900 NHS staff on secondment the chance to become co-owners of Circle without losing their NHS employment rights.

Every Government Department will put in place a far reaching right to for public sector workers to take over the running of their services. However, services in areas such as defence and security may be exempt. The new right will only apply if appropriate guarantees are met, mutual proposals will be expected to deliver savings to the taxpayer maintain or improve the quality of services. Where public procurement processes allow and savings are properly agreed, staff forming a mutual will be awarded a contract to continue providing services rather than going through the full tender process. 

Francis Maude, Minister for the Cabinet Office, said:

This is part of the Big Society approach to public service reform, devolving power to people on the front line who know how things can be done better. The right to provide will challenge traditional public service structures and unleash the pent up ideas and innovation that has been stifled by bureaucracy. It will also put power at a local level so public services will be answerable to the people that use them.

“When staff are given a stake in shaping services productivity and efficiency has been shown to improve dramatically. We must not be afraid to take bold decisions that will help create better public services at a time when there is less money to go round.

“I’d like to thank the John Lewis Partnerships, the Employee Ownership Association, Co-ops UK, Local Partnerships and all the supporters of our mutual Pathfinder programme for the energy and vision they are brining to this exciting policy. I believe that in a decade’s time employee-owned mutuals will be one of the major types of organisation providing excellent public services.

Employee Ownership Association director Patrick Burns said:

Giving public sector workers the right to take a meaningful ownership stake in the services they provide is a welcome opportunity to bring significant benefits to frontline staff and services users alike, from enhanced productivity to increased innovation. To help ensure transition to a mutual approach is successful, it is vital that staff are properly supported throughout. We strongly urge employees thinking of taking up this right to use the new mutuals hotline and advice service launched today.

Councillor Sir Merrick Cockell, Leader of the Royal Borough of Kensington and Chelsea, said:

We have officers who understand the challenges and are dedicated to looking after the young. Our role as the Council should be to keep a watching brief and put the experts in the driving seat to work alongside young people. That is what the pathfinder programme is all about.

Published 17 November 2010