Charitable trust Power to Change: How we share a vision with the EOA to ensure businesses and jobs are rooted in communities
Independent charitable trust Power to Change believes its work aligns with the Employee Ownership Association (EOA) when it comes to ensuring businesses and jobs are rooted in communities.
The two bodies exist to champion community businesses and employee ownership respectively, but have a shared vision to help businesses and jobs stay local and accountable.
The EOA believes that, among other benefits, employee ownership “roots businesses in their local area and preserves jobs, putting the direction of the business in the employees’ hands – preventing businesses from being sold to the highest bidder who may strip the assets or move the business elsewhere”.
Power to Change, which was set up with an endowment from The National Lottery Community Fund in 2015, is about “strengthening local communities and making places thrive through growing community businesses”, says Chief Executive Tim Davies-Pugh in relation to its role as an enabler and a funder.
“We try not to be too prescriptive in defining what community business is, but in essence they are trading to meet a local need and accountable to the people who live and work in the place – it’s the ability to build community power and resilience that we see as most important.”
Alongside helping community businesses, Power to Change also recognises the value of having plural economies in a community and seeks ways to build bridges between alternative economic approaches so they can reinforce one and other for the benefit of that area.
“Power to Change sees community businesses as one tool in the toolbox, we feel they can play an important part in rebalancing power in the economy and building local wealth,” adds Tim.
“They can’t provide an answer to all our ills on their own, but alongside other models, such as employee ownership, multi-stakeholder and worker co-ops, they can provide opportunities for people to have a genuine stake in the businesses where they live and work.
“We’re really interested in the work of the EOA in terms of businesses transferring into employee ownership. It’s intriguing to consider how these two things might start to come together when we think about employee and community ownership, where appropriate, because businesses operating in and for communities very often also employ people from those communities.
“I think employee ownership is probably more relevant today than it ever has been. We’ve seen communities rallying together to face a lot of challenges and that isn’t disappearing anytime soon.
“So, if different stakeholders are starting to work together to strengthen and grow the social economy in a particular place that can only strengthen a community’s ability to help itself, ensure everybody has a say in what’s happening, and to manage what is going to clearly be a tough few years ahead.”
Communities feeling ‘sense of ownership’
An example of the ongoing work to promote a mixed economy is the support Power to Change provides to the Ownership Hub.
Power to Change recently became the custodian of funds – previously granted by the Open Society Foundation Economic Justice Programme to the EOA and Co-operatives UK to deliver the Ownership Hub, which is the partnership that aims to grow employee and worker ownership with a number of pilots emerging in the regions, including the South Yorkshire Mayoral Combined Authority.
“We want to explore how we build a better, fairer economy and within that we feel there are different ways of exploring how that might happen,” Tim told the EOA Podcast.
“That notion of trying to understand how to encourage people to think about ownership in a slightly different way has been our primary reason for getting involved in the Ownership Hub project.
“Communities feeling there’s a sense of ownership and these enterprises belonging to them, rather than companies parachuting staff in and extracting wealth out, means that communities really experience the benefits of a locally rooted economy.
“This kind of work can really help with local wealth building and moving people on in their development, so it’s not just about salaries and profits disappearing, there’s actually that contribution to the wealth of a community, self-belief and power – helping people to really understand what they can do.”
Employee ownership ‘safeguards jobs and businesses’
Across England there are more than 11,000 community businesses. Employee ownership, meanwhile, is one of the fastest growing business succession solutions in the UK – there are now more than 1,000 employee-owned businesses, with the sector more than doubling in the past three years.
Among its many benefits, employee ownership roots jobs in a community for the longer term, with a good example of why this is so important being provided by a Welsh company that recently transitioned to EO.
Branwen Ellis, business advisor on employee ownership with the Social Business Wales team at Cwmpas, told the EOA Podcast: “Historically, when some of the iconic Welsh businesses have done well, the owners have come up to retirement and unfortunately those businesses have been sold to third parties not based in Wales.
“So, all that wealth that has been created over the years by the employees has haemorrhaged out of the country, whereas if we manage to keep those iconic companies in Wales then we manage to keep the money circulating in the economy.
“Melin Tregwynt is a good example of that, a woollen mill which had been run by three generations of the same family. It would have been a shame to lose that business in Wales, so actually having it transition to employee ownership earlier this year is a great way of making sure that very rural location is able to safeguard a business and those jobs.”