Members of staff from Hammersmith & Fulham, Westminster and Kensington & Chelsea LAs will run their school support services through an employee-led mutual as part of an initiative to test alternative ways to run public services. The mutuals will be supported by a sponsor from the private sector.

Half of the profits made by the mutual will be put back into the education budgets for each borough. The other half will remain with the staff involved and their private sector partner. Staff will be able to decide what to do with their share of the money: options include investing it back into the service, or paying themselves a dividend.

Andy Rennison, assistant director of Hammersmith & Fulham children’s services, said: ‘We feel that having more control, flexibility and being able to develop a more commercial approach will benefit schools, the mutual staff and the three councils.’