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Francis Maude Launches Pathfinder Mutuals

CAB 137-10

12 August 2010

The first wave of Pathfinder mutuals, to be run by entrepreneurial public sector staff, who want to take control of their services, has been announced today by Minister for the Cabinet Office, Francis Maude.

As part of the Government's commitment to support the innovation and entrepreneurialism of front line staff, twelve fledgling public service spin-offs have been chosen to be Pathfinders for the mutuals initiative. These pathfinders will be trailblazers for the rest of the public sector – helping Government establish, by learning from the front line, what type of support and structures will best enable the development of employee-led mutuals on an ongoing basis.

The pathfinders will be supported by expert mentors from some of the country's most successful businesses and leaders in employee ownership models. All the mentors have offered their support for free and will work with staff in the Pathfinder projects to help them develop a range of sustainable, efficient and pioneering employee-led services.

The mentors will include staff from the John Lewis Partnership, probably the country's best-known co-owned business, as well as from PWC, KPMG, Tribal, Baxi Partnership, Care and Share Associates, Sunderland Home Care Associates, Central Surrey Health, Local Partnerships, Godrevy, GLL (Greenwich Leisure), and The Office for Public Management will also be providing mentors. Also, leading lights in this field, like Lord Victor Adebowale of Turning Point, have offered to be mentors.

Minister for the Cabinet Office, Francis Maude said:

“Today's announcement is the first step in creating a genuinely ground-up movement where staff, who are the real experts, can come together to take over and deliver better services. I know that across the country there are literally thousands of front line employees who can see how things can be done better, but at the moment, with the existing constraints, they just can't get it done. Now this is going to change.

“The potential for public sector staff to spin out is enormously exciting. The new models will show us how we best support mutuals, tackling problems when they first arise not expensively managing them over many years.

“This is a Big Society approach, decentralising power so people can deal with the issues that concern them. We must not be afraid to do things differently if we are to provide better services for less money. The Pathfinders show that this vision is possible but it won't happen without real commitment and support. We are incredibly grateful for the offers of support we have received from a wide range of experts in business and employee ownership; the involvement of these successful employee owned businesses further demonstrates the viability of public sector mutuals and I am excited about what this initiative has the potential to achieve.”

Chairman of the John Lewis Partnership, Charlie Mayfield, said:

“The John Lewis Partnership is delighted to offer our practical insight and experience to support a new generation of public sector organisations exploring an employee-led approach.

“Being employee-owned is an approach that has served our business well for over 80 years. Whilst not a guaranteed solution to today's challenges, the strengths of an employee-led model – such as an empowered and informed workforce and a close alignment of motivation between managers and employees - has helped us create a strong culture of trust, innovation and customer service.”

The Pathfinders have a range of different innovative business models. In Swindon, staff are developing plans to integrate Community Health and Adult Social Services into a cooperative social enterprise. Joining these services together will mean that health and social needs, which are often related, will not be treated in isolation. This model has potential to help services intervene earlier to tackle problems before they get out of control and create significant efficiencies.

Another very different Pathfinder is the 157 Group, a consortium of 28 further education colleges working to set up a qualification awarding body. Setting up as a mutual will give the 157 Group much greater influence, flexibility and control over the way in which qualifications are developed and awarded. It also offers major financial efficiencies.

The Pathfinders are:

Mr Maude added:

“The Spending Challenge unleashed a torrent of pent up ideas and comments from public sector workers frustrated by the difficulty of implementing their suggestions. If only a fraction of these 63,000 people are latent entrepreneurs, who itch to put their ideas into action, then our ambitions for public sector mutuals will be amply met.”

Notes to editors

  1. Further information can be found at www.cabinetoffice.gov.uk (see related links).
  2. A full list of businesses that have agreed to be mentors for this first wave of mutuals are: John Lewis, KPMG, PWC, Tribal, Local Partnerships, Baxi, Care and Share Associates, Sunderland Home Care Associates, Central Surrey Health, Godrevy, Victor Adebowale, Office for Public Management and GLL (Greenwich Leisure). In addition, the Employee Ownership Association (EOA) has offered to be part of the mentoring process, linking public service organisations to mentors and others, and playing a brokering role.
  3. The pathfinders are exploring a variety of legal forms and methods of employee leadership. The focus of this project is on embedding the principles of cooperation, rather than the particular legal form used to achieve this, which will be decided by each pathfinder.
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