Cabinet office minister Francis Maude has said there is ‘much more’ scope for the use of personal budgets in health and social care.

He also strongly defended the use of staff owned mutuals in the provision of public services. He said they were the best innovation he had seen in government and could improve performance “almost overnight”.

Mr Maude said: “There’s much more scope for much more personal budgets, particularly in social care, and particularly for people with chronic health conditions.

Man looking at pills

‘No one knows more about the conditions they suffer from than patients,’ Francis Maude said

“In my experience no one knows more about the conditions they suffer from than patients and their families.

“Giving them the scope to buy the care that works the best for them has a huge benefit, both in terms of money being spent better but also in terms of human happiness.”

Mr Maude, a keen advocate of public sector mutuals, where groups of workers “spin out” of the public sector, said they encouraged entrepreneurial thinking and instilled commercial discipline in providers.

The Conservative MP cited the NHS as an example of where staff owned mutuals produced “extraordinary” improvements in performance.

He said: “With all these mutuals we have seen this extraordinary and ­– almost overnight in many cases – improvement in productivity”.

“People who are genuinely and legally owners of the enterprise, even where it’s a non-profit, all talk about how important the ownership is. It’s the psychological and emotional ownership – they feel they own the responsibility to make it work and they have the power to make it work and that’s profoundly influential.”

There are 53 mutual organisations providing some form of service to the NHS, according to Cabinet Office figures.

Addressing an event organised by the Reform think tank this week, Mr Maude said: “With the public service mutual you bring together an incredibly powerful cocktail of forces.”

He cited these as entrepreneurial leadership, a “liberated” workforce, commercial discipline and a public service ethos.

Mr Maude said: “There are many entrepreneurs [in the public sector]; they have all the best qualities of wanting to invest their time, their energy and their skills, their knowledge and their initiative into an enterprise.

“This can be brought together with liberated a workforce, which is trusted and empowered.

“Everyone in these mutuals will say: ‘We know we have to succeed as business. We know we have to make a surplus. We won’t distribute it to ourselves, but to be sustainable, we know we have to make a surplus.’”