ONE hundred new British businesses have spun out from the public sector and are delivering nearly £1.5 billion of public services, Minister for the Cabinet Office Francis Maude has announced.

Speaking at a Downing Street reception to mark the milestone, Mr Maude described how mutuals now employ 35,000 people and have generated more than 3,000 additional jobs in the last three years alone.

Public service mutuals are organisations which have left the public sector but continue to deliver public services. Employees play a significant role in their operation. Employee control is said to improve productivity, staff morale and innovation, which leads to better services for users, greater value for money for taxpayers and drives local growth.

The Cabinet Office has a modest £10 million programme, which, it is claimed, has helped secure the UK’s status as a global leader in mutuals. The programme offers public sector employees professional expertise and advice to help them spin out.

Mr Maude said: “As part of our long-term plan for a stronger economy, we are determined to drive up public sector productivity, which flatlined from 1997 to 2010. We need innovative new ways of delivering better services for less money, so we are helping public sector workers spin out to form mutuals.

“There are now 100 public sector mutuals across England and Wales. These are new businesses, employing 35,000 people and delivering services from community health to libraries. We know this is just the beginning of a massive transformation - we have even had interest from a fire service looking to mutualise.”

Attending the celebration were chief executives of successful mutuals, including the public sector pension provider MyCSP, where staff have raised their productivity by 15 per cent, year on year, City Health Care Partnership, where over 90 per cent of staff "feel trusted" in their jobs and the recently established Behavioural Insights Team - often known as the Nudge Unit - which has more than doubled its headcount in just six months of trading as a mutual joint-venture.