First major Government mutualisation announced

Cabinet Office minister Francis Maude, has today announced plans for the mutualisation of the 400-strong My Civil Service Pension , which administers the delivery of Civil Service Pension schemes.

This will be the first major mutualisation of a central government service. Mutuals, as they are known, give employees a financial stake in a business whose ownership is shared between the public and private sectors.

The Cabinet Office is also considering the potential for offering a stake to 1.5 million pension scheme members. 

Maude said:  “Too often there’s been a binary choice between the Government providing a service itself, or outsourcing it to the private sector. These choices have historically been driven by a belief that services have to be controlled centrally – with a one size fits all approach that has left little room for innovation.

“We are looking for more innovative ways to structure services. We know that employees who have a stake in their business, or take ownership of it completely, have more power and motivation to improve the service they run. They can also benefit from partnerships with private or voluntary sector organisations which can bring in capital and expertise.

“For the private sector, which can no longer expect the generous margins of the past, tapping the talent of frontline staff to improve efficiency will be a priority. The state too can keep a stake so that taxpayers benefit from the rising value of an improved service.

“I’m impressed with entrepreneurial zeal of Phil Bartlett and his team at My Civil Service Pension. They are pioneering the mutual joint venture model and the Government is committed to ensuring they have they right support to succeed.”

Phil Bartlett, CEO My Civil Service Pension, said: ” By taking the opportunity to mutualise we can better acknowledge our people and their expertise – and access valuable additional resources and expertise in the private sector.

“This new and innovative structure will give us the agility to exploit opportunities in the changing pension landscape and grow our business, and the taxpayer will benefit from the increased value of an improved and more efficient service.”

Mutualisation is being supported by dedicated resource within the Cabinet Office. Earlier this month Maude announced that the entrepreneur and business leader, Stephen Kelly, has been appointed as the Crown Representative to support the creation of mutuals from existing service teams within central government departments.

He also announced the establishment of an Enterprise Incubator to help civil servants create successful enterprises from within central government, including employee and management teams who wish to form mutual companies under the Right to Provide previously announced by the Cabinet Office.

The Government is developing mutual models through the Mutual Pathfinder programme which is supporting 21 existing and potential mutuals with mentoring and advice from experts in employee ownership.

Every department will put in place ‘rights to provide’ giving staff new rights and support to form mutuals.

The Cabinet Office has appointed Professor Julian Le Grand to head the Mutuals Taskforce which will support staff interested in mutualising their service.

Links:

Government signs over civil service pensions to private sector mutual.

 FSA Mutuals public register.

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