Acevo has warned that new public services mutuals which have spun-out from government, risk inhibiting other providers in the voluntary and private sector, as they are guaranteed business from the state to support their incubation.

Sir Stephen Bubb, chief executive of Acevo makes the warning in a letter to Professor Julien Le Grand (pictured), who is leading the Cabinet Office’s Mutuals Taskforce.

The government is currently encouraging and supporting the development of employee-led mutual delivery organisations to increase innovation in the public sector.

In his letter to Professor Le Grand, Sir Stephen says Acevo is excited about the possibilities for partnership between voluntary sector organisations and these new public services mutuals over the coming years.

But, he says, there are challenges that still need to be addressed.

Sir Stephen warns that new spin-outs from government have guaranteed business from the state to support their incubation, so risk inhibiting competition:

“Care must be taken to ensure that mutualisation does not block or slow down potential service providers from other sectors,” he says. “And the Taskforce should seek evidence that this is not happening with any of the pathfinders or their predecessors in the NHS.”

Sir Stephen also says that there is a danger that some public sector agencies may see mutual spin outs as a way to get wages and costs off their books. “Public service mutualisation must mean more than just a re-branding of existing provision,” he urges.

Open Public Services 

Meanwhile, Sir Stephen has received a letter from Prime Minister David Cameron, in which he promises to work with Acevo on taking forward its plan to open up public services to a variety of providers, especially smaller organisations.

The Open Public Services White Paper was launched in July, and provided a framework around which the government plans to make it easier for providers to run public services. Key points included, encouraging competition amongst a range of providers to improve service quality, giving people direct control over the services they use and decentralising power to the lowest appropriate level.

In the letter to Sir Stephen, which was sent last week, Cameron thanked Acevo for its contribution to the development and launch of the White Paper and said it would want Acevo to play an active role in driving the debate and shaping the proposals over the months to come.

Ministers will set out plans for taking forward Open Public Services in November.