The Mutuals Taskforce, the body set up to advise the Cabinet Office on public sector employee spin-outs, has called for a raft of new measures to make mutuals a “mainstream option for public service delivery”.

In a report called Public service mutuals: the next steps, the group, chaired by professor Julian Le Grand, says public service mutuals should be allowed temporary exemptions from EU competition rules. This would “enable them to be established before being subject to full and open competition”, and encourage more public sector workers to set up their own spin-off groups, it says.

It calls for several government departments to include in their business plans a strategy for “developing and implementing mutualisation policy, including Rights to Provide”.

However, the Department of Health was commended for its “pioneering” policies in this area.

Departments should also set out clear routes for their own staff to set up spin-off services, it says.

The report also asks the government to ensure that “in house” provisions under EU laws, which allow contracts between public authorities to be exempted from the public procurement rules, can “continue to provide a route for the development of mutuals”.

It says some public sector employees considering setting up mutuals face “an anxiety about the threat they might pose to long-established ways of doing things and indeed to long-established jobs and positions”.

“Public services are traditionally delivered by large, state-operated bureaucracies, or outsourced, or privatised and run by for-profit companies…It is the view of the taskforce that mutuals do offer a real and potentially transformative alternative,” it says.

“Experts and professionals work best when they have a broad freedom of action; when they can make their own judgements as to how to provide a good service.”

The report says the number of public service mutuals has risen to 58, from 9 in 2010.

In a foreword to the report, Cabinet Office minister Francis Maude said: “I look forward to seeing an expansion of mutuals and urge public sector workers to challenge and seize the initiative to take control of their services and have accountability and responsibility for what they do.”

Mr Maude said in a statement: “We will now consider how to take the recommendations forward but in particular I am already aware of the problems with EU procurement regulations and will push for reform.”