How employee ownership aligns with the Government’s ambitions to ‘Level Up’ the UK
The Employee Ownership Association (EOA) has welcomed the Government’s Levelling Up plan announced by minister Michael Gove in Westminster.
The drive to boost opportunity and productivity in the regions aligns with our own regional plans to grow employee and worker ownership, thereby driving increased business performance, innovation and resilience.
Anything that makes sure more people can take advantage of improved opportunities, wherever you live in the UK, is to be welcomed.
As a national organisation once based in London, but for the past eight years based in the East Riding of Yorkshire, one of the nine regions invited to discuss county deals to extend devolution of powers further, we can vouch that you can have a national presence from anywhere in the country.
The idea of the imbalance of wealth and power focused in mainly one place also seems even less relevant to how things need to work in the future in a world where employees have been keeping businesses and organisations afloat during the pandemic from home offices across the country.
Mr Gove’s long-awaited strategy sets out a plan to “transform the UK by spreading opportunity and prosperity to all parts of it” by 2030, with the White Paper setting out 12 missions to achieve this.
Giving the regions more power
Mission 12 states that every part of England that wants one will have a “devolution deal with powers at or approaching the highest level of devolution and a simplified, long-term funding settlement”.
The EOA believes that the shift of power to the regions mimics the shift of ownership in an employee-owned business.
Putting power into the hands of those who know the business – or in the case of levelling up, the region – best and empowering and enabling them with authority and resources is proven to deliver.
Like when giving employees a stake and a say, this unlocks extra discretional efforts by everyone being clear on the direction of travel, how they can contribute and how it is going to be financed.
Employee ownership is already an important contributor to regional economic prosperity as when used for ownership succession, it roots businesses in their local area and preserves jobs – preventing businesses from being sold to the highest bidder who may strip the assets or move the business elsewhere, like to London or out of the UK.
The role of pay, employment and productivity
The most pertinent of the 12 missions, number one – that “pay, employment and productivity will have risen in every area of the UK, with each containing a globally competitive city, with the gap between the top performing and other areas closing” – is a key area of interest for the EOA.
Pay, employment and productivity have a clear role for different forms of shared ownership.
Where the ambitions of levelling-up and ours meet is the need to make sure these benefits – more engaged employees, empowered to deliver higher levels of productivity, innovation and performance, and access to a greater share of the wealth that they create – are felt in economic regions.
Having more employee and worker owned businesses in every region of the UK will support the creation of more sustainable and inclusive businesses both at start-up and through ownership succession, thereby spreading the proceeds of success wider into the population.
More businesses choosing employee ownership at the point of succession will root jobs, more resiliently, in those economic regions for the longer term.
Restoring pride in places
A key priority of the levelling-up plan is to restore pride in places – for example by increasing people’s satisfaction with their town centre and engagement in local culture and community.
Undoubtedly some of this will hinge on more shared ownership of enterprises and assets, with employee and worker ownership as part of that.
We agree that empowering local leaders, with devolved funding and plans to drive better outcomes, driven by metro mayors, is an essential ingredient.
It is also clear that more employee and worker ownership as part of more shared ownership will help to impact on many of the other missions, especially around skills and innovation.
The more devolved areas there are, the more chance that the learning and evidence from our Ownership Hub pilots can be shared and replicated in other regions, to grow the number and benefit from more employee and worker ownership.
This natural fit is something the EOA will work with our partners, Co-operatives UK, to champion as part of the #1MillionOwners, while the Ownership Hub begins its work in South Yorkshire and brings to life two more regions to evidence the case to grow the project further.
At the EOA, we commit to working with regions and other stakeholders in the shared ownership space to support better outcomes for people, businesses, economies, and communities.
But to make these joined aims a possibility, we need cross-party support for employee and worker ownership and a commitment to look at the evidence, funding for regions to support more employee and worker ownership, and for the employee ownership trust (EOT) to continue to be supported and not open to future misuse.
EOA welcomes debate by MPs on contribution of co-ops and mutuals