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Employee-led Mutual Organisations

Volume 518: debated on Wednesday 17 November 2010

Today, I am setting-out the steps the Government are taking to support workers to establish employee-led mutual organisations.

Every Government Department will put in place a “Right to Provide”—a right for public sector workers to take over the running of services.

These rights will not be uniform across Departments because each Department’s requirements will be different. The rights will be as far reaching as possible, but we accept there will be areas where it will not be possible to mutualise, for example, because of security or operational stability concerns. It will be for Departments to set these areas out.

Cabinet Office will work with Departments to explore where public procurement processes allow for staff forming a mutual to be awarded a contract to continue providing services. Mutuals will have to negotiate contracts with the applicable Department or local commissioning body, which show how they will provide services while minimising administration and overheads.

In developing and implementing these new rights it is important that central Government lead by example. I will announce today that the Government will develop a right for civil servants directly employed by Departments to form mutuals. In the wider public sector workforce, it will be necessary for Government to work with local public sector bodies and employers.

The Government will not seek to dictate what is best for employees and for the users of services; rather the precise model of mutualisation should follow the service being provided; this could for example include joint ventures.

I am establishing a “challenge group” in Government to advise me and other ministerial colleagues about how we can best enable the success of this policy. This group will convene key policymakers and experts to drive the changes to policy and process necessary across Whitehall.

From spring 2011, the Government will invest over £10 million to fund a programme of support for some of the most promising and innovative mutuals so that they reach the point of investment readiness. This will build on the work of leading organisations in the sector to develop a network within which public sector employees, investors and public service commissioners can develop viable businesses.

The new suite of Rights to Provide are part of the Government’s broader commitment to ensure that a much wider range of organisations can deliver excellent and efficient public services. The Government will publish a White Paper on reform early next year, setting out where we can go further to shift power away from central Government to citizens, communities and independent providers.