Press release: UK GOVERNMENT URGED TO INVEST IN EMPLOYEE AND WORKER OWNERSHIP
New campaign launched today calls on the government to set a target for #1MillionOwners by 2030
LONDON, UK – July 22nd 2019 – The Employee Ownership Association (EOA) and Co-operatives UK are calling for the UK Government to invest £2million in the upcoming Spending Review and create a clear national policy objective to support a voluntary expansion of employee and worker-owned businesses.
Research from the EOA and Co-operatives UK shows that growing employee and worker ownership – businesses that give employees a stake and a say – would help Government achieve its objectives for a more productive, inclusive and balanced economy, supporting its own aims in the Good Work Plan and playing a key role in the Industrial Strategy.
The #1MillionOwners campaign launched today calls for £2.17million to be allocated over the next three years with an ambition to create one million worker and employee owners by 2030, addressing some of the challenges currently facing the UK economy.
The £2.17million would help five local enterprise partnerships (LEPs) pilot an intervention to address the biggest barriers to employee and worker ownership – awareness, practical understanding and advice amongst entrepreneurs, business owners, workers and professional advisors.
Ed Mayo, Secretary General of Co-operatives UK said: “When it comes to reducing wealth inequality, driving employee engagement and tackling regional resilience, employee and worker ownership offers a proven solution.
“The UK’s best employee owned businesses and leading worker co-ops can be the answer to a more inclusive economy at a time of great economic uncertainty, and we’re urging Westminster government to match the Scottish Government’s ambition for a fivefold increase in the number of employee and worker owned businesses by 2030.”
Deb Oxley OBE, Chief Executive of the EOA said: “Now is the time for UK government to invest in creating more businesses that have a proven record of accomplishing and sustaining higher productivity, greater economic resilience and having a wider impact on the regions they operate in.
“Not one dissenting voice has followed recent high profile employee ownership transitions such as Riverford, Aardman and Richer Sounds. In fact, there was universal political support as well as a positive endorsement by commentators in tabloids and broadsheets. We have great examples from across the UK of employee and worker owned businesses doing well while doing good – it is very clear the UK would benefit from having more of them.”
Julian Richer, former owner of Richer Sounds, recently handed over control of the business to its staff by placing 60% of the company into an Employee Ownership Trust (EOT).
The EOT model is a key driver supporting the conversion of SME and family-owned businesses and has helped support the growth of more employee-owned businesses since Government introduced it into the 2014 Finance Act.
Julian Richer, founder of Richer Sounds, who is supporting the #1MillionOwners campaign, said: “To me, the decision to sell the company to my colleagues was an obvious one. Nobody knew my business better than the people in it and we’d created a culture together. To sell to the highest bidder would have created wealth for one or two people, instead, using the EOT model we will sustain the value we create for the individual, the business and the economy for the longer term.”
As one of the largest worker co-ops in the UK, winner of a Queen’s Award for Enterprise, with a £55m turnover and 200 worker owners, Suma is also backing the #1MillionOwners campaign.
Ross Hodgson, Suma member said: “Worker ownership has been the key to our success over the last 40 years. All our members are paid the same and are given an equal say in how the business is run, with each carrying out a range of jobs across our co-op. We support the campaign to create and support more worker owners and urge the government to commit funding to grow the sector.”
The regional pilots will help the UK to increase its pipeline of worker co-operatives particularly at start-up or early evolution stage, as well as increase the number of conversions to employee ownership at the point of succession.
Scottish Government currently invests around £500,000 each year plus the wider costs of infrastructure through Scottish Enterprise. This demonstrates how modest funding, properly spent to improve awareness, practical understanding and provide expert advice, can help expand employee worker ownership.
An independent evaluation for Co-operative Development Scotland cited a tenfold return on investment in gross value added for every pound invested in on-the-ground support to grow employee and worker ownership.