Tag Archives: Financial Times

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

Mutuals regain recognition as form of business ownership

By David Bicknell

The rebirth and acceptance of mutuals as a form of business ownership has been recognised in an article by Charles Batchelor in the Financial Times published yesterday.

In a piece headlined “Different kinds of company ownership are gaining in popularity” as part of a special report ‘The Future of the Company’, Batchelor listed mutuals alongside family businesses, publicly quoted joint-stock companies and sole traders and partnerships as forms of ownership.  

On mutuals, Batchelor said this:

“Mutuals, represented mainly by building societies in the UK, were a popular form of ownership in previous years, although their numbers have shrunk dramatically as many societies have demutualised in recent decades. One mutual that is thriving, however, is John Lewis, the owner of the John Lewis chain of department stores as well as Waitrose, the upmarket grocery store. The employee-owned company has been extremely successful in weathering the retail downturn that has affected the rest of the UK high street, and in the process has shown that mutuals do, perhaps, have a place in the future.”

Admittedly for those already in or in the process of creating mutuals and social enterprises, it may not mean much, but it is perhaps a sign of the times to see the prospective growing role of mutuals specifically recognised by the FT in this way.

Mutuals: Financial Times report says the Coalition’s Public Service Reform Plan is On Hold until July

By David Bicknell

A report in the Financial Times has suggested that David Cameron’s plan to free public services “from the grip of state control” has been put on hold until July, in the face of opposition from the Liberal Democrats and public concern over the privatisation of health and social care.

The positive aspect of this story, however, is still that the White Paper has been delayed, not shelved, and that  ‘mid-July’  is still only a few weeks away.

The report says the plan to transform public services through greater use of private providers, mutuals and social enterprises has already been cut back and is now the subject of coalition wrangling.

The FT report says: “Downing St insiders confirmed on Wednesday that the vaunted white paper on reform – originally set for publication in January – is now unlikely to be published until mid-July.

“Mr Cameron has already been forced to abandon a proposal in last year’s comprehensive spending review that the white paper should set quotas for handing over public services to independent providers.

“In February, he promised to create “a new presumption” for public services to be open to a range of providers competing to offer a better service.

“Conservative officials said work was under way to create a white paper that set the framework for the coalition’s approach to the public services, including opening up opportunities for small and medium-sized companies and mutuals.

“An earlier draft largely set out existing government plans, including cutting the cost of Whitehall procurement by centralising much of it, encouraging a million public sector employees to form social enterprises and using payment by results for welfare-to-work and offender rehabilitation.

“Nick Clegg, deputy prime minister, is insisting the final white paper does not pave the way for the wholesale privatisation of public services – resisting a push for a big expansion in independent provision by Mr Cameron’s policy adviser Steve Hilton.

“Nick does not want there to be any sense that the public sector can’t be a provider of good quality public services,” said one Lib Dem official.”