The new enterprise will be contracted by the Government to administrate pensions for the 1.5million members of the Civil Service scheme. It will cut costs for taxpayers, reaching annual savings of 50% by 2022, while improving the service.
The Equiniti Group’s Paymaster business has been announced as the winner of the hotly contested tender to join the venture with a 40% stake. Paymaster brings business expertise and capital investment. The Government retains a 35% stake so taxpayers benefit as the business grows in value.
Francis Maude also announced today that former Cabinet Minister, Lord Hutton of Furness, will be the first Chairman of MyCSP Ltd. As such, Lord Hutton takes a leading role in the Government’s plan to hand greater ownership, responsibility and power to the people running public services. Mark Lund, the former Chief Executive of St. James’s Place Capital PLC, will Chair the MyCSP Ltd Employee Partnership Trust charged with protecting the employees’ interests.
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.
“Lord Hutton brings a real wealth of experience to his role as Chairman and I’m delighted he has accepted this role”.
Lord Hutton, Chairman of MyCSP, said: “I am a firm believer in the power of engaging employees to drive innovation. MyCSP Ltd builds a powerful partnership that will drive up standards and reduce costs. Providing a high quality service to scheme members will be vital to ensuring they never lose sight of the true value of their pension. I am proud to accept a role in this ambitious project.”
Paul Bingham, Managing Director of the Equiniti Group’s Paymaster business said: “The mutual model is a great idea, with a great future, and one which Equiniti Group is excited to be part of. Our experience looking after 2.9 million pension scheme members and working with more than half of the FTSE 100 makes us the ideal private sector partner in this ground breaking arrangement. We share the same desire as MyCSP to offer a fantastic service to customers and to make our mutual joint venture a template for others to come - a focus which will make this business a commercial success.”
Stephen Kelly, former CEO of successful FTSE and NASDAQ companies was today appointed as the Government’s nominated Board Director, said: “With Lord Hutton’s leadership I have complete confidence that My CSP will succeed. The mutual joint venture model can open up employee ownership as an option for thousands of public services which would simply not be viable as a traditional mutual. Forming partnerships with the private sector can give mutuals the capital backing and business expertise they need to thrive and grow. This means more benefit from the improved productivity and customer satisfaction mutuals are proven to generate.”
Phil Bartlett, CEO of MyCSP Ltd, said: “The launch of MyCSP Ltd is an extraordinary achievement and paves the way to meeting the challenges, and grasping the opportunities that lie ahead. We have a lot of work to do but for the first time we have the backing and resources to build the excellent service that we’ve always aspired to. I welcome Paymaster to our new partnership and thank the employee partners who have over the last year delivered real improvements despite the pressures of reform.”
MyCSP Ltd is a pathfinder at the cutting-edge of public service reform. Such innovations are vital to protecting frontline services while helping to bring public spending back under control. A diverse and innovative marketplace will increase competition and outcomes. Research shows that competitively tendering public services typically produces between 10% and 30% savings, while maintaining or improving standards.
Pioneering better business models, such as the Mutual Joint Venture, is critical to keeping Britain’s public service industry ahead of global competition. Growing demand for public services in economies such as China, India and Brazil, will create significant new opportunities in a market which British businesses lead. In 2010, the UK public administration, education and health industry sector balance of trade switched from a deficit of £154 million in 2009 to a surplus of £304 million.
MyCSP Ltd is the first central government mutual but many already operate successfully in the wider public sector. Over £1billion of health services are provided by mutuals. Evidence suggests that employee ownership can boost productivity by up to 19%. John Lewis, one of Britain’s best known mutuals, continually tops customer satisfaction polls and has half the average staff turnover and sickness absence of the retail sector. The Government is supporting public servants who want to form mutuals with a £10million Mutuals Support Programme and Mutuals Information Service http://www.mutuals.cabinetoffice.gov.uk/ and hotline 0845 5390543.