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Public service mutuals in social care

In January, the Government announced it was offering a funding pot of up to £1.7m to support and create more public service mutuals. With Government funding to help local authorities to spin out services, Rachel Law explains more about public service mutuals in social care and what her organisation has been able to achieve since it spun out.

Public service mutuals is perhaps not a term most people in the social care sector are familiar with. I certainly wasn’t aware that these types of organisations existed during my time working as Head of Learning Disability Services at Rochdale Borough Council. It’s for this reason that I’m most proud of the success that my team has enjoyed since we embarked on our journey to become a public service mutual four years ago.

Public service mutuals

Public service mutuals are organisations that put staff at the heart of decision-making and service delivery. Often referred to as ‘mutuals’, they are organisations that have left the public sector but continue to deliver public services, typically as social enterprises. They aim to have a positive social impact with employees that have a significant degree of ownership, influence or control over the way the organisation is run.

There are approximately 115 mutuals that operate across England, of which more than a quarter are in social care, including my organisation, PossAbilities. We are a social enterprise that supports vulnerable adults across the North West of England including those with learning disabilities, dementia, brain injuries and young people leaving care. Once a part of Rochdale Borough Council’s Adult Social Care services, we decided to become a mutual in 2014 through the Government’s Mutuals Support Programme.

Business as a mutual

While we were part of the local authority, we had limited funding to improve service delivery but now our profit can be reinvested back into the services we offer. Everything we do improves the services for the people that we support, and that’s our main objective as an organisation.

Since spinning out, we have been able to realise the benefits of being independent, such as being able to make faster decisions and opening up more opportunities to use innovative services. More importantly, it’s meant we’ve been able to target new commercial opportunities and move away from being reliant on a single funding source.

The transformation from public sector to a public service mutual has been challenging at times. At first, staff were concerned that the added responsibility of running a business might distract from their primary objective of providing care. Despite these initial worries, giving people greater control of how the business is run has actually had an empowering effect on the workforce.

I’m unbelievably proud of the fact that staff made a leap of faith and believed in PossAbilities right from the start. This journey has meant we’ve had to grow as people, but we’ve grown together. If we make a profit, then we ask staff and the people we serve what they would like us to spend it on – so people have a genuine say on how the organisation is run. Staff feel really engaged and want to make the business work, which is probably one of the reasons why we’ve enjoyed so much success since spinning out.

Mutual workforce

It’s not just us who have seen a positive impact on the workforce. A recent report by Social Enterprise UK for the UK Government showed that across the mutuals sector, 85% of organisations have a happier and more engaged workforce since the move out of the public sector.

As independent organisations, mutuals can offer more flexible working patterns, such as job sharing, term-time working and nine-day fortnights. These changes are not just nice to have, but have a positive impact on productivity and the bottom line.

Our staff absences have fallen by more than a half since leaving the public sector. This decline can also be attributed to the way in which we now recruit our staff. It’s more important for us to make sure our staff have the right values to fit in with what we want to achieve, as we can teach them the skills they need along the way. We offer a comprehensive learning and development programme to ensure staff can develop a career in the way they want to, and at a pace that works for them.

In addition to this, as we’re not tied to the local authority pay and reward policies, we can also reward our staff in other ways. Given the nature of our work, we have little flexibility on pay, but we’re able to reward staff in ways which mean something to them. For example, staff with excellent attendance records are rewarded with a ‘duvet day’, and every Christmas, dependent on company performance, all staff receive a £150 gift voucher as a reward.

Public Service Mutuals should have a ‘significant degree of employee ownership, influence or control’. The way in which mutuals fulfil this requirement varies widely, as it needs to work for each individual organisation. It could be through staff ownership or membership, as with a co-operative model, or through having a staff council and elected staff members on the Board of Directors.

We have a Staff Director who is elected by the workforce to sit on our Board and represent them. With all mutuals, regardless of the mechanism, staff are empowered and encouraged to come up with new and different ways to deliver services better.


This way of operating has led to us to introduce Cherwell Wellbeing Garden and Farm, which we launched following suggestions from our staff and service users. It provides opportunity, support and encouragement for people to learn new skills and improve their existing ones to help pave their way into employment or voluntary opportunities. The initiative is run collaboratively between local people with learning disabilities, with support from our staff and community volunteers.

As well as allowing us the freedom to be more innovative, being a mutual has enabled us to put all of our energies and resources into helping provide a better service for our customers. We might not have been able to secure timely approval for the wellbeing garden and farm while part of the council as we had so many other priorities. Now we’re independent, when our staff and customers come up with good ideas we’re able to make them a reality quickly.

Commercial success

Not only are we helping to ensure happy customers and staff, but we’re proving to be commercially successful too. In the four years since PossAbilities was formed, we’ve increased our turnover from £6m to £11.5m, and more than doubled our workforce from 220 to 550 staff.

In 2016 alone, we won £10m worth of new business contracts. Our commercial success has been echoed at industry level with the team winning a host of sector awards and the organisation being rated Outstanding by CQC for our supported living and shared lives service in Rochdale.

We’re not alone in this success. The mutuals sector as a whole is estimated to be delivering £1.6bn of public services, and this figure is expected to rise with the sector growing by 7% over the last year alone.

Crucially, 92% of the organisations surveyed by Social Enterprise UK were making a profit, proving that mutuals are commercially viable organisations. Perhaps even more importantly, as mutuals are typically social enterprises like us, these profits are almost always reinvested back into the organisation, cause or local community.

We knew that leaving the public sector was the right thing to do, but we could never have predicted the success we have had since spinning out. There have been challenges but, overall, it’s been an incredibly rewarding journey. We have come out the other side with better quality services, a happier and more engaged workforce and we’re helping more people than ever before across the North West.

‘Mutuals are delivering fundamental public services to communities across the country. PossAbilities shows how adopting this type of business model can have such a positive impact on an organisation’s services, staff and the people who they support.

‘We launched our £1.7m mutual support programme earlier this year to help the sector thrive by delivering training and mentoring to expand the high-quality services mutuals provide.

‘A total of £1.2m is available to create new mutuals, or strengthen existing ones, providing access to advice across areas including legal, financial, marketing, human resources and business planning.

‘The remaining £500,000 will be used to pilot support programmes to help mutuals collaborate with voluntary, community and social enterprise organisations and others to broaden the service they offer.’

Tracey Crouch, Minister for Civil Society

Rachel Law is Chief Executive of PossAbilities. Email: Twitter: @Poss_Abilities

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