Many public workers fear that the mutuals agenda amounts to privatisation by stealth. But Francis Maude tells Joshua Chambers that it will be up to new mutuals’ staff to decide whether to stay mutual – or to cash in.

Sitting on an uncomfortable sofa after yet another Conservative Party Conference fringe meeting, Francis Maude is pressed for time. He has just been mobbed by a gaggle of attendees, many of whom are trying to publicise their business and explain how it fits in with the government’s planned reforms.

Maude’s interest in these businesses may well be genuine – but he also plans for the public sector to start running its own businesses, with groups of government workers spinning off as mutualised contractors. Before this gets fully underway, though, government will have to decide exactly how to implement the mutualisation plans sketched out in the Open Public Services white paper.

“We’re working on a whole lot of the implications at the moment,” he says. “We’re debating whether we should have a third wave of pathfinders, or whether actually we have learned enough from these two waves and the experience to simply encourage [mutualisation] more widely. Hothouse support to a small group is great in terms of working out what we need to do for the future, but it would be very restraining if that were all we were doing.”

The language of the government’s mutualisation policy implies that ordinary public sector workers will set up mutuals of their own volition. However, the government’s flagship mutual, MyCivilServicePension (MyCSP), was set up on the initiative of management with the encouragement of the Cabinet Office. Does he expect that public sector workers will set up their own mutuals? “Yes. Certainly in the health and social care sector, there are a lot which are developed in that way, but it will always need some leadership – which may be existing managers, or may be someone from outside stimulating interest in the workforce.”

As government starts to develop more mutuals, does he think it will have to bring people in to manage that process? “There’ll be some; we need to make sure we’ve got the right skills,” he admits. However, he adds that “most existing civil servants want to develop other skills, and I do not take the view of the last government that if there’s anything difficult we hire consultants to do it or hire someone externally. I think we can build up a lot of these skills in-house.”

One question asked about Mr Maude’s mutuals is whether he thinks mutualised workers should be able to sell their stakes to the private sector – effectively privatising parts of the public sector. “One reason I was very keen that in MyCSP the staff should have a 25 per cent stake is because that gives them a blocking minority as shareholders, so the employee benefit trust can prevent [a private sector takeover] from happening,” he says. However, he then adds: “You wouldn’t want the staff to be excluded from the ability to benefit from the sale of the entity. In the mutuals which are for-profit, rather than not-for-profit, you want people to feel that there’s a possibility at the end of it that they may be able to cash out, which is fine.”

Francis Maude has set his face against the ‘asset lock’ demanded by Labour figures and social enterprise champions – and this will heighten some public servants’ fears that mutualisation is simply a step towards privatisation. Others, however, may be attracted by the chance to win a cash reward if their successful mutual is bought out by private investors.

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Written by Joshua Chambers, CSW