A Positive Pause
August owes its position in our calendar to a desire to reflect on the conquest of Egypt by Augustus. It remains to this day a month in which many of us pause, often on holiday, to look back and assess progress achieved during the year to date. It is insightful to do this for employee ownership. Insightful and tremendously energising too, because 2014 is proving to be an absolutely pivotal year in what I have been describing for some time now, without hyperbole, as the decade of employee ownership in the UK.
General awareness of employee ownership, particularly amongst businesses, advisors, funders and politicians has risen to unprecedented levels. Familiarity with the long termism and high productivity it delivers is also rapidly rising, buoyed by the phenomenal success of UK Employee Ownership Day 2014 last month. EO Day 2014 was the most successful single initiative ever mounted in the UK to profile the extent and benefits of employee ownership.
Critically, the evidence base about employee ownership has been getting stronger throughout this year as well. The number of employee owned businesses in the UK is growing at an annual rate of 9%. The productivity of employee owned businesses is increasing at an average of 4.5% year on year. The annual profitability of employee owned businesses continues to significantly outperform that of externally owned companies by some 7%. The much better service quality, service outcomes and value for money achieved when public sector purchasers place service delivery contracts with employee owned businesses is being demonstrated more and more.
And in addition to this growing employee ownership evidence base, in a really powerful new development, the recently completed Ham Review has increased the possibility of getting more employee ownership into acute health care. Now that really would push employee ownership right into the forefront of people’s daily lives. It seems absurd that parts of the NHS including Foundation Trusts have obligations to involve local communities and patients in all of their work, but have no duty in addition to deeply engage employees or to create ownership routes for them. The recommendations of the Ham Review offer a chance for people to escape from what is a moribund paradigm. And perhaps above all else they create the opportunity across the entirety of the NHS to promulgate a brand new modern language that advocates employees and employee owners working with patients and service users to design care and to create integrated care delivery.
On top of all of this progress the EOA’s successful campaign to secure new tax incentives for employee ownership will see all of the measures we called for being introduced in 2014, with many of them already live after the UK Finance Bill 2014 recently received Royal Assent. These new measures will play a very significant role in the future growth of employee ownership in the UK.
We warmly appreciate the steps taken by the Coalition Government, and the work of civil servants, to implement these new tax changes. Let us be clear though that the employee ownership agenda is not mainly about Government. Whilst the EOA will continue to campaign for taxation, funding and regulatory reforms when appropriate, we do not look to Government to create growth in employee ownership. The main impetus behind the recent and current growth in employee ownership is being and must continue to be created by those in the business community, those in the real economy. I am hugely proud of the wonderful contribution that employee ownership is making to our economic recovery and long may that continue.
So even this cursory Augustan glance back at the year so far emphasises just what an exciting time this is for employee ownership. Employee ownership is a movement for positive change, for a better way of doing business. We are heading quickly in the right direction. But for the rest of 2014 and then beyond there is still so much more to do. And as we start to look ahead to the end of the holiday season, raising awareness will continue to be a vital theme for employee ownership. Although the doubters are in a minority there are still too many of them! So I encourage everyone who supports employee ownership to keep communicating and advocating the evidence of its value to the economy and to society every single time there is a chance to do so. Campaigns for progressive change need the oxygen of publicity.
Finally for now I will end on a very practical note. I am delighted that the EOA Annual Conference this November will again host the UK’s most important employee ownership awards, the Philip Baxendale Awards. The closing date for receipt of entries for the various categories is 11th September 2014, and details of how to enter are available here. The Conference Gala Dinner at which the Awards are presented is always a very special evening in the employee ownership calendar, so please do not miss the Awards deadline if you want the chance to win!
Iain Hasdell is Chief Executive of the EOA