Hutton to chair mutual pension scheme
Chaired by Lord (John) Hutton, a former work and pensions secretary under Labour, employees will have a 24 per cent stake in the service, called MyCSP, which will administrate the civil service pension scheme.
Cabinet minister Francis Maude said: “We no longer face a binary choice between public services delivered by state monopoly and straight privatisation. That is why I am a passionate supporter of mutuals which will help Britain grow a more diverse economy.
“As a mutual, MyCSP will deliver better services for its pension scheme members, millions of pounds of savings for the taxpayer and a real sense of ownership for employees over what they do.
“We are transforming a neglected back-office operation into a new competitive and responsible business – the rest of the world is watching.”
Mr Maude said it would create annual savings of 50 per cent by 2022, while improving the service. The Equiniti Group’s Paymaster business will also have a 40 per cent stake, with the government retaining 35 per cent.
The government said in its coalition agreement in 2010 that it was committed to promoting the mutual sector.
Dan Clayden, director of Devon-based Clayden Associates, said: “It is a different approach and a middle ground between full privatisation and being state run.
“In some respects, you can see the reason why the government would try a mutual approach, because a lot of the time, state-run schemes have been criticised for wastefulness and poor management.”