A pilot scheme overseen by the Cabinet Office seeks to create an employee-led mutual company to provide shared servies to schools in three London boroughs.
The mutual company, a co-operative in the mold of building society Nationwide or retailer John Lewis, will take over services currently being supplied by the London Borough of Hammersmith and Fulham (LBHF), the Royal Borough of Kensington & Chelsea and Westminster City Council – known collectively as a "super council" due to their merged services.
The company will provide IT, construction, engineering and security services that are currently supported by the councils themselves. Staff that work on those services will be transferred into the mutual company under TUPE regulations.
It will be a joint venture with an "Independent Sector Partner (ISP)", that may itself be a consortium of commercial suppliers. Share ownership will be split between the ISP and mutual company’s employees.
Lead council LDHF has issued a tender for the ISP contract, which it says will be worth between £12 million and £22 million over four years. It envisages between three and five separate companies making up the ISP.
Andy Rennison, who led the project and is the assistant director for Hammersmith & Fulham children’s services, said that the the councils would receive half of the mutual company’s net profits if the venture is succesful. Those profits will be reinvested in services.
"Staff in these areas have experience of trading with schools and are excited about the new challenge. We feel that having more control, flexibility and being able to develop a more commercial approach will benefit schools, the mutual staff and the three Councils," he said.
The plan falls under the Cabinet Office’s Pathfinder initiative, which seeks to hand control of public services to the staff which work at them. Cabinet Office minister Francis Maude said the super council’s plan is "is particularly groundbreaking as staff are forming a ‘joint venture’ with a partner organisation that will help to develop the business further."