Mayor of London commits to boosting city’s economy through promotion of employee and worker ownership
The Mayor of London, Sadiq Khan, has today announced an exciting new partnership with Co-operatives UK and the Employee Ownership Association (EOA) to empower employee and worker ownership of businesses in London.
Image: Greater London Authority
This London Ownership Hub builds on the Mayor’s manifesto commitment to ensure London’s recovery from the pandemic results in ‘more of the prosperity created locally being captured within the local community’. To drive this forward, the Mayor committed to supporting democratic businesses like co-operatives, mutuals, social enterprises, employee-owned, municipally-owned and community-owned businesses.
The Mayor’s team will work with Co-operatives UK and the EOA to develop the networks, resources and conditions to help worker co-operative and employee-owned businesses across London thrive.
There are more than 1,600 worker and employee owned businesses in the UK, with around 30 per cent of these in London. Together they contribute over £40 billion to the UK economy, providing more than 200,000 jobs.
The announcement comes at a crucial time in the current climate of economic turbulence. Employee and worker-owned businesses engage and empower workers to drive performance, while rooting good, sustainable jobs in regional economies. Giving people a stake and a say in their workplace is also a fundamental criterion in the Mayor’s Good Work Standard, an accreditation programme for employers modelling best practice in pay, well-being, diversity, recruitment, skills and progression.
Employee and worker ownership strengthens the ability of businesses to weather difficult economic conditions. Research has shown that employee and worker-owned businesses bucked recent downturns, with improved staff retention and over half experiencing growth during the first year of the pandemic. Only 1.7 per cent of employee-owned and co-operative businesses ceased trading last year despite a tough 2021, compared to 7.5 per cent for all businesses.
The London Ownership Hub will begin to offer advice, information and support to businesses interested in worker and employee ownership and professional advisors in London in early 2023.
The Mayor of London, Sadiq Khan, said: “London businesses have had to weather the perfect storm of Covid-19 and Brexit, followed by soaring inflation and falling consumer spending. In these uncertain times it is essential we don’t settle for business as usual and instead explore every opportunity to make our businesses more resilient and beneficial to local communities. Employee ownership creates dynamic, engaged workforces who feel a deep connection and shared purpose with where they work and who they work with.
Increasing the number of employee and worker owned businesses is a key part of my mission to build a better London for everyone – a safer, fairer, greener and more prosperous city for all.”
Rose Marley, CEO at Co-operatives UK, said: “We’re delighted that the GLA has shown its commitment to creating a fairer, more inclusive economy. Business as usual doesn’t cut it: trashing nature, paying poverty wages and diverting the nation’s wealth into tax havens, rather than reinvesting in our people and communities.
“This is an important step to breaking that mould. Worker co-ops are better at creating jobs, compared to businesses generally. We also know employee and worker-owned businesses are more resilient in an economic downturn. Creating more productive, engaging, empowering and democratic workplaces is better for everybody.”
James de le Vingne, CEO of Employee Ownership Association said: “The London Ownership Hub is a step forward for a prosperous, resilient, sustainable, and fairer economy in Greater London, and a sign of the important role employee and worker ownership has to play in economic development in the UK.
“Employee ownership hardwires fairness and inclusivity into our economy by providing employee owners a stake and a say in their workplace. It’s a highly impactful option for business considering succession or growth, and a practical solution in times of economic hardship. We are delighted to be working with the GLA to champion and grow employee and worker owned businesses across London.”
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