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First local government mutual sees lift-off

A new public sector mutual – claimed to be the first led by council staff – was launched today (24 April) with a focus on providing education services.

Staff from Hammersmith & Fulham, Kensington and Chelsea and Westminster councils have joined the mutual, 3BM.

The organisation has a private sector partner, Prospects Services, which was itself a spin-out from the public sector.

The mutual was set up with the backing of the Cabinet Office, and is expected to save £1m over four years.

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3BM will provide a range of education services, including financial management and budget planning, IT and building development projects. It will also offer strategic advice to councils.

Minister for Civil Society Nick Hurd said: “The Government is supporting entrepreneurial front line staff looking to form mutuals, mutual joint ventures, social enterprises or whatever business model that allows organisations to continue delivering top notch public services – as well as provide growth to the economy.

“These new businesses allow staff a much greater opportunity to show off their skills – and get more reward – while at the same time giving the taxpayer a better deal.”

Andy Rennision, 3BM’s managing director, highlighted the procurement process to find a private partner as challenging.

Prospects was chosen in a ‘dragons den’ process but with the partner’s shareholding capped at no more than 25%.

Rennison said: “Being the first to do anything is always a challenge. As the pilot, leading a new agenda of opportunity, we are excited by the prospect of setting the benchmark for future ventures.”

Cllr Nick Botterill, Leader of Hammersmith & Fulham, said: “Our local taxpayers will benefit from savings of more than £1m, our schools will benefit from more responsive and innovative services, and the staff will take full control of the direction of their new business with a stake in its commercial success. They have taken a bold and enterprising step and I would urge other councils to take advantage of their experience to do the same.”

Law firm Trowers & Hamlins advised Hammersmith & Fulham Council.

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