AUGUST 2018

EMPLOYEE OWNERSHIP
Can worker-owners
plot a new course for
the UK economy? New
report on £30bn sector
An independent inquiry overseen by a
group of leading business organisations
has found that employee ownership
can help address the “fundamental
challenges” facing the UK economy.
The Ownership Effect Inquiry was led
by the Employee Ownership Association
(EOA) and supported by the eaga Trust
and the John Lewis Partnership with the
academic support of Cass and Manchester
Alliance Business Schools.
The panel took evidence from more
than 100 employee-owned businesses
and concluded an expansion of the
model would boost the economy in three
NSORS AND ways: SUPPORTERS improving productivity; creating
resilient regional economies; and
improving worker engagement.
Organisations overseeing the report
include the Institute of Directors, the
Institute of Chartered Accountants in
England and Wales, the Federation of
Small Businesses and the Chartered
Management Institute.
It found that the EO sector has a
combined turnover of more than £30bn,
which is growing by 10% each year.
And – in a point also made in the
recent New Economics Foundation report
Co-operatives Unleashed – it calls for
better succession planning for the £519bn
family business sector, where 85,000
firms are sold every year, often with poor
deals. An easier transition to employee
ownership would lead to more secure
futures for workers and communities,
it says.
The report also echoes calls from the
co-operative movement for more coverage
of employee ownership models in
business education.
Baroness Bowles of Berkhamstead,
who chaired the inquiry, said in her
introduction: “The report could hardly
be more topical or relevant at a time
when UK productivity continues to
underperform; the government is
concerned about standards of corporate
governance, low worker influence and
p The report wants a national strategy to boost the sector
engagement, and defaulting public
service conglomerates; and regional
government and business leaders are
concerned about business succession,
resilience and economic growth.
“This report evidences a thriving
and fertile employee ownership sector
that offers positive responses to these
challenges.
“That is not to say employee ownership
is the ‘ideal’ business model, or that its
impact is automatically and universally
transformative. Employee ownership will
be right for some firms, but not others –
and although its benefits can be dramatic,
they must be worked for.”
Recommendations in the report include:
Direct investment by Westminster, with
a capacity-building initiative to create new
EO firms, as has been done in Scotland
and Wales
Pilot projects from the devolved
authorities to support transitions to EO
THE
OWNERSHIP
DIVIDEND
THE ECONOMIC CASE FOR EMPLOYEE OWNERSHIP
A national strategy to foster the growth
of the sector
Extra funding for the government’s
Mutuals Support Programme 2, a scheme
to support public service mutuals
National trade bodies should work with
the EOA to develop training packages and
other support
A more conducive tax environment for
EO businesses
A dedicated minister with clear
responsibility for EO and mutually owned
business models
Regular data collection on the state
of the sector
A more proactive awareness-raising
approach from financial and educational
institutions.
You can download the report at
theownershipeffect.co.uk/
Launch of the NEF’s Co-operatives
Unleashed report – p34-35
AUGUST 2018 | 9