Question to the Ministry of Housing, Communities and Local Government:

To ask the Secretary of State for Communities and Local Government, if he will assess the effectiveness of staff-led mutuals in providing value for money for local authorities; and if he will make a statement.

It is for locally elected council leaders to decide how best to deliver the services that their communities rely upon. If council leaders decide to deliver services using staff–led mutuals or other staff-led initiatives than they must ensure they clearly demonstrate that they offer good value for local taxpayers and provide the best outcomes for services users.

The Government is encouraging the development of public service mutuals because of the benefits they bring to public sector staff, local commissioners and service users. By freeing employees to deliver and improve their services as they know best, mutuals enable innovation and because they feel more engaged, staff are likely to stay longer with the organisation and miss fewer days of work. Research shows that absenteeism and staff turnover fall 20% and 16% respectively after an organisation has spun out.

Mutuals are proving successful at generating new business, expanding into more areas and winning additional contracts, acting as engines for small business growth in their local communities. Our latest data shows that mutuals have average projected revenue growth of 10% over the next year.

The Community Right to Challenge complements the work to support formation of new staff-led mutuals in local government by providing a mechanism for local authority employees to set out their proposals for delivering services as a mutual or other service spin–outs. Information from the Programme suggests it has helped 30 groups of local authority employees to explore using the Community Right to Challenge to help them mutualise a service and has given advice to 10 local authorities.