As part of my regular visits programme I spent last Friday afternoon at the offices of 3BM, an employee-owned mutual that delivers services such as financial management, IT and building development to schools allowing them to focus on education.
I was keen to hear about how the Mutuals Programme works in practice given that the Government wants to empower more public sector workers to become their own boss and, through this, to deliver better services.
Unique to 3BM is the fact that it is the first ever mutual joint venture to spin out of local government – the business is owned by a partnership between its employees, who own 75.1% of the business, and Prospects, the education employment company which brings the capital and business expertise needed to help the business grow.
The need for support in the early stages
Through the course of my visit, what became very clear to me was the importance of early support to 3BM’s success, both managerial and commercial as well as political.
The council were highly supportive of the spin-out, as demonstrated by their commitment to four years of business with 3BM. This was underpinned by the assistance provided by both Prospects and our very own Mutuals Support Programme (MSP).
3BM was the first project to be supported via MSP with around £55,000 worth of support for legal advice throughout the procurement process. The support also enabled 3BM to set up as a company, with staff shares held in an employee benefit trust.
Mutuals
The visit gave me the opportunity to hear from individuals with first-hand experience of a mutual but, just as importantly, it provided me with the opportunity to gain a real, in-depth insight into the Programme more broadly.
The case for public service mutuals is a strong one because of the potential benefits they bring to public sector staff and service users. By freeing employees to deliver and improve their services, mutuals enable innovation and improvement.
What’s more, because staff feel engaged, they are more likely to stay longer with the organisation and miss fewer days of work. The latest data shows that absenteeism and staff turnover fall 20% and 16% respectively after an organisation has spun out.
This has understandably led to growing enthusiasm for the model. The number of public service mutuals has increased from 9 in 2010 to around 80 today, with mutuals appearing in 14 different sectors, from youth services to social care. These 80 projects are part of a pipeline of around 140 emerging and established public service mutuals.
Encouraging signs
From what I saw on Friday it is clear that 3BM is an exemplar, demonstrating just how beneficial a model of service delivery this can be.
The organisation has already proved itself a successful growing business, winning 10 new contracts in the first 6 months of operating as a mutual business. And as a result of 3BM spinning out, the local councils will see £1m in savings over the next four years.
In short, 3BM’s mutual journey has got off to a great start, and I look forward to following its progress.
Conclusion
Perhaps the key benefit of the mutual model is that it enables entrepreneurial public sector staff to combine their passion for public service with more scope to improve delivery. It was fascinating to learn more about the Programme first-hand from the people who work on the front-line - four days later and I still feel buoyed by their optimism.