Ministers have called on councils to develop staff-led mutuals as an alternative to conventional outsourcing, following the launch of the first mutual 'spin-out'last week.

Minister for civil society at the Cabinet Office, Nick Hurd, oversees the coalition's mutual programme. He praised 3BM, the west London tri-borough initiative aimed at providing support services for schools, as an 'ice-breaker' which would lead to further local government employee-led enterprises.