The news may be dominated by the UK’s upcoming divorce from the EU, but that’s not the only way to separate as many public services can attest. Over the past seven years, more than 100 diverse public services have quietly been consciously uncoupling.

Mutualisation is the process of ‘spinning out’ public services into new organisations that have a significant degree of employee control. Size doesn’t matter, with existing public service mutuals ranging from 1 to 6,000 people. A key to success is retaining the values that underpin the service whilst becoming more agile.

Is it time to separate?
Spending cuts, outsourcing, moving from provider to commissioner, harnessing new technological innovations and defining and measuring outcomes are just a handful of challenges severely affecting the operating environment for both commissioners and public services. Looking towards mutualisation can lighten the load.

Our experience advising public service mutuals and commissioners through their spin out journey – from creating a business case to post-implementation – has highlighted three key benefits:

• Being more efficient and responsive
• Being outward looking and innovative
• Having higher workforce engagement

Firstly, public service mutuals are seen to be less bureaucratic than their former selves, allowing them to make decisions faster and be more agile (supported by a survey conducted by CIPFA showing 78% of public service mutuals are more responsive). In an age where the political landscape is ever changing alongside increasing pressures on public services, being more responsive is not only necessary but essential.

Secondly, rather than relying on original contracts, public service mutuals are now able to think outside the box, with many expanding their horizons to new public service contracts and areas of operating.
In health and social care for example, we see spin outs establishing new partnerships with other public service mutuals and voluntary, community sector and social enterprise (VCSE) organisations to deliver collaborative person-centric care in innovative ways.

Lastly, spinning out into public service mutuals creates higher workforce engagement. CIPFA’s survey showed that 78% of respondents had seen a more engaged and happier workforce, which could be linked to the benefits already highlighted, as well as the fact that 79% of these respondents also said they had staff representatives on their board. When we supported Remploy Employment Services in spinning out, we not only helped them create a £50m social business but ensured employees held a 30% stake.
Becoming more forward-thinking in the areas they work leads to staff feeling more engaged, increases retention rates and reduces missed days of work. Employees have room to manoeuvre so they can deliver public services in the most effective manner.

Read more about how we helped Remploy spin out their £45m service.

Getting over the split
Despite the clear benefits, spinning out is still a challenging process. Communications, commercial skills and the development of a strong business case are just a few obstacles public services must clear.

Our experience has allowed us to assist in all stages of the mutualisation process and help address these challenges: conducting market analysis, developing business and transition plans, navigating the procurement process to find a joint venture partner and supporting mutuals in marketing their services and new culture to stakeholders.

If you’re curious about how spinning out might breathe new life into your organisation, get in touch with our Public Sector lead, Saimah Heron, on saimah.heron@baxendale.co.uk.