Headlines: May 1st, 2012

The first mutual for delivering central government services has been launched. MyCSP Ltd is a ‘John Lewis style’ business which will manage the payment of Civil Service pensions. Mutuals are well established in the health service where they deliver £1b of services.

MyCSP Ltd gives employees a 25 per cent ownership stake, representation at board level and a share in profits. It will cut costs for taxpayers, reaching annual savings of 50% by 2022, while improving the service. The savings will be achieved partly through investment in new technology.

MyCSP Ltd has 500 Employee Partners in offices in Cheadle Hulme, Liverpool, Newcastle, Worthing, Basingstoke and Leeds. The 25 per cent employee stake is managed by the MyCSP Employee Partnership Trust. The Trust appoints a Non Executive Director onto the Board of Directors and will pay employee partners a dividend from profits annually.

A key feature of the Open Government White Paper published in 2011 is the drive to open public services to competition from a diversity of providers. It is predicted that by 2015 up to one million current public sector workers, 15 per cent of the existing workforce, will be employee owners and partners in mutuals delivering public services.

Evidence suggests that employee ownership can boost productivity by up to 19%. John Lewis, one of Britain’s best known mutuals, continually tops customer satisfaction polls and has half the average staff turnover and sickness absence of the retail sector. The Government is supporting public servants who want to form mutuals with a £10million Mutuals Support Programme and Mutuals Information Service.

Pioneering better business models, such as the Mutual Joint Venture, is critical to keeping Britain’s public service industry ahead of global competition. Growing demand for public services in economies such as China, India and Brazil, will create significant new opportunities in a market which British businesses lead. In 2010, the UK public administration, education and health industry sector balance of trade switched from a deficit of £154 million in 2009 to a surplus of £304 million.