Dozens of services and 75,000 staff set to be transferred to private sector

Unions denounce sale as ‘privatisation by stealth’

Ministers are preparing to spin off “dozens” of state-owned services into independent companies in what could be one of the largest privatisation programmes since the 1980s.

Under plans being rolled out by the Cabinet Office, millions of pounds’ worth of state-owned services will be spun off into independent companies – jointly owned by private-sector investors and their employees – within the next two years. Eventually as many as one in six civil servants – or 75,000 staff – could be transferred into the private sector with the Government maintaining a minority stake and offering long-term contracts to the new companies to encourage investment.

Today the Cabinet Office minister Francis Maude will announce that the Government’s Behavioural Insights Team – known as the “nudge unit” – will become the most high-profile area of Government to be “mutualised”.

It will be turned into a profit-making joint venture with private companies being invited to bid for a stake of up to 50 per cent in the new business. Under the plan, the Government would guarantee contracts for a number of years – with the business free to sell its services outside Whitehall.

But the move will herald a much wider sell-off of government functions and assets over the coming months.

Among the areas under active consideration are Whitehall’s IT, personnel and legal functions. Cabinet Office sources said they hoped to support “dozens of such spin-offs” in a programme which is expected to raise millions of pounds for the Treasury. It will leave a dramatically slimmed-down Civil Service providing only core functions of policy advice and implementation.

Eventually other government bodies such as the Land Registry and the Office for National Statistics could also become candidates for mutualisation, although government sources stressed that these were not under consideration at present.

The move has been condemned by public sector unions which fear it will lead to job cuts and erosion of services as the private outsourcing companies that are expected to take stakes in the new ventures look to cut costs.

Dave Prentis, the general secretary of the public sector union Unison, said the plan amounted to “privatisation by stealth”.

He said: “The involvement of big private companies makes mutuals just another Tory party ploy to sell off public services. The Government is stretching the definition of mutuals to the limit – genuine co-ops and mutuals will be up in arms.

“Staff will be plunged into confusion and could face being taken out of public sector pension schemes and having their pay and conditions seriously harmed.”

Crime Commissioner blogs on 'huge potential benefit' of police sponsorship

A police tsar has held talks with a possible sponsor for his force in a bid to survive "austere times with a shrinking budget and workforce".

Police and Crime Commissioner (PCC) for Dorset, Martyn Underhill is considering private sponsorship, on an arrangement involving all five PCCs in the south west region.

The former detective chief inspector for Sussex Police wrote on his blog that he could see a "huge potential benefit to forming appropriate sponsorship relationships with reputable organisations".

The 43 police forces across England and Wales face funding cuts of up to 20% by 2015.

Mr Underhill, who was second-in-charge in the Sarah Payne child murder case, said:

The police family in Dorset is living in austere times with a shrinking budget and workforce.

Despite those challenges, we are maintaining an efficient and effective service for Dorset.

However, our funding needs to be readdressed and I continue to lobby the Government for extra funds. We are the lowest- funded force and have seen the worst cuts.

At a crime reduction event last Friday Mr Underhill met a possible sponsor, and will ask for the issue to be added to the agenda at the next regional PCCs and chief constables meeting.

He went on:

I can see huge potential benefit to forming appropriate sponsorship relationships with reputable organisations. They will give Dorset Police greater funding to maintain a high-quality service.

They will also ensure that we have the funds to help us to combat crime and provide reassurance to communities.

But he added:

I need to be clear that we are looking for longer- term business support, rather than one-off sponsorships. This will help us to plan and sustain projects that might otherwise not have been possible due to the ongoing financial constraints.

I also need to stress that neither myself as police and crime commissioner for Dorset, nor the force, will ever allow operational functions to become dependent on, or to be influenced by, sponsorship agreements.

PCCs, which replaced existing police authorities in 41 force areas across England and Wales, were handed the power to set force budgets and even hire and fire chief constables.