Tag Archives: DWP

MyCSP becomes first public sector mutual spin-out

By David Bicknell

An article on the Daily Telegraph website suggests that this week will see the creation of the government’s first public sector mutual spin-out. 

MyCSP will be spun out from the Department for Work and Pensions (DWP) and “transformed into an independent mutual that will give staff an unprecedented say in how the business is run and the chance to share in the new company’s profits.”

A 25% stake in MyCSP will be divided between the agency’s 500 staff, with a 40% sold off to a major player in the financial services industry. The company will try to win new business from the public and private sectors.

The Telegraph reports that ministers believe mutualisation will halve MyCSP’s administration costs. Although staff will become members of the private sector, they will retain their public sector pensions.

MyCSP has signed a 10-year contract to administer the civil service pension scheme, which has around 1.5 million members. At the end of this contract, the new mutual will have to compete against other private sector pension adminstators to run the scheme.

Lord Hutton of Furness, a former Labour minister, will be the chairman of the MyCSP. He said he hoped this was the “first of many” mutuals to be spun out of the public sector.

“Creating mutuals are a very exciting way for people on the front line of the public sector to take ownership and responsibility for the services they provide,” said Lord Hutton.

“They get a voice on the board and a share of any profits. I hope this model will lead to better performance and better value for the taxpayer.”

He argued that the old model of public sector monopolies were “not fit for the 21st century”, and added that the greater squeeze on taxpayers’ money ensured that poor performance in the public sector could “no longer be tolerated”.

“There is no such thing as a status quo in the public sector worth defending – we must have a relentless pursuit of excellence,” he said.

“I am a very strong supporter of what this Government is trying to do with public service reform particularly with a view to mutualisation.”

MyCSP’s private sector partner will be the Equiniti Group’s Paymaster business, which will hold a 40 per cent stake, with the government holding 35 per cent and the employees 25 per cent under a model based on the much-quoted John Lewis model of mutual ownership , which rewards employees with profit-related bonus schemes.

Related articles

Mutualised civil service pension service is launched

Hutton to head up Whitehall mutual

Equiniti Group’s Paymaster business partners with first central government mutual

DWP civil servants get ready for MyCSP mutual leap

By David Bicknell

An article  published yesterday in the Financial Times has focused on the move of 500 civil servants to form a mutual.

The 500 staff, currently in the Department of Work and Pensions (DWP), will leave the public sector in March and become stakeholders in MyCSP, a privately held company that will handle the retirement funds of 1.5m civil servants.

The FT calls the move to create a so-called John Lewis-style mutual, “one of the biggest experiments in public sector reform.”

It writes that under the MyCSP model, profits will be shared between a private sector provider, which will hold a 42 per cent stake; the government, with 33 per cent; and employees, who will own 25 per cent of the shares. 

A shortlist of 16 private sector providers has been whittled down to four – Xafinity, Capita, JLT and Wipro – with the winner due to be announced next month.

In light of the ongoing row over executive pay, the FT points out that the chief executive’s compensation will be capped at 8 per cent above the average employee’s salary while 1 per cent of net profits will be paid to charities and a further 1 per cent used to create apprenticeships.

You can read the full FT article here (subscription required)

Stephen Kelly – the man at the coalface of the Big Society

Cameron needs to ride out Murdoch affair


By David Bicknell and Tony Collins

It would be a pity if David Cameron were forced to stand down over the phone hacking affair. Cameron is the force behind Francis Maude’s reform plans for central government, in particular the plans for finding and implementing innovative ways of cutting costs, mutualisation, simplifying and standardising ways of working and breaking the stranglehold  of the few big IT suppliers to government. Cameron and Maude are trying genuinely to find ways of giving creative SMEs more government work.

Were Cameron to go, Maude would probably be much more isolated. As it is permanent secretaries would be more than happy to see Maude’s reforms melting away, though they would continue to express support for radical change. As the Cabinet Secretary Sir Arnold says in the first episode of “Yes Minister” on Open Government:  “The less you intend to do about something, the more you have to keep talking about it.”

The signs we have seen are that Maude and his team are full of good ideas that some senior civil servants in departments would rather talk about than implement. We’ll shortly be publishing a piece on how officials at the Department for Work and Pensions still default to secrecy despite Maude’s attempts to change the mindset of the civil service.

Cameron will make some mistakes. Nobody is perfect. And prime ministers are always at the mercy of a previous Conservative prime minister, Harold Macmillan’s warning of “events, dear boy”.

Even Churchill made mistakes such as the Dardanelles landings. The media loves scalps and Cameron’s opponents will make the most of Murdoch’s woes. We hope for the sake of the reforms of central government – and the huge savings to be made – that Cameron stays.

David Cameron is an asset. His would be a resignation too far.