Ownership Hub, a collaborative initiative to scale employee ownership across the UK
by Karen Kahn
The UK Employee Ownership Association (EOA) and Co-operatives UK have launched Ownership Hub, a joint initiative to build regional partnerships that will promote employee ownership for regional development. The first Ownership Hub launched in June, in the Sheffield City Region of South Yorkshire.
“While the growth of employee and worker ownership is accelerating, we needed a new approach for a chance for it to grow at scale and deliver impact in economies and communities.”–Deb Oxley, chief executive, UK Employee Ownership Association
Mayor Dan Jarvis noted, “This is a hugely exciting opportunity. Not just because it gives us the chance to boost our support for co-ops and employee ownership, but because it will help to weave the thread of co-operation through our plan for economic recovery and renewal in South Yorkshire.”
Jarvis, a member of the Cooperative Party, is a huge fan of employee ownership. He noted, “Giving workers more control and a fair share of revenues fosters a sense of empowerment and makes them measurably happier.”
The Ownership Hub Initiative
The Ownership Hub model is similar to the effort to build state centers for employee ownership in the United States. Regionally based Ownership Hubs will tap into existing business networks to educate both start-up entrepreneurs and retiring owners looking for an exit strategy about the benefits of employee ownership. Additionally, the centers will target professional advisors to deepen their knowledge of employee ownership and worker coop models, so they can support employee-owned businesses and conversions.
Keely Lead, spokesperson for the UK Employee Ownership Association (EOA), notes that two of the primary barriers to scaling employee ownership in the UK have been lack of awareness among retiring business owners and insufficient knowledge regarding the model among professional advisors. The Ownership Hub is designed to overcome these barriers. EOA envisions launching 20 regional hubs over the next five years.
Latest Employee Ownership Survey
Since the release of the Nuttall Review of Employee Ownership in 2012, employee ownership has been steadily growing throughout the UK. EOA recently released its annual survey of employee-owned firms. In 2020, despite the pandemic, the sector saw “unprecedented growth,” according to EOA. Across the UK, a total of 148 businesses became employee owned, an increase of 30 percent for the year. That growth continued into the first half of 2021, with 113 new employee-owned businesses thus far.
The UK now has a total of 730 employee-owned businesses. About two thirds of these businesses are organized as Employee Ownership Trusts (EOTs), which, like ESOPs in the US, receive some preferential tax treatment. Eight of the largest employee-owned firms in the UK are Community Interest Companies (CICs), social purpose organizations that deliver health care, elder care, or child care. In addition to the employee-owned businesses identified in the EOA survey, the UK also has about 400 worker-owned cooperatives.
Geographic growth of employee ownership has been disparate, with 22 percent growth in the London area, and 13 percent growth in Scotland, where the local government has put considerable resources into supporting employee ownership conversions. The Ownership Hub regional strategy is intended to bring more resources to regional development authorities.
Says Deb Oxley of EOA, “While the growth of employee and worker ownership is accelerating, we needed a new approach for a chance for it to grow at scale and deliver impact in economies and communities.”
Sheffield Home to Employee-Owned Gripple
Sheffield is home to Gripple, one of the UK’s most successful employee-owned businesses. According to Coop News, the manufacturer of wire joining and tensioning devices opened in the 1990s and became employee owned in 2011. Today the business has 670 employee owners and a global business, exporting to 80 countries. Said, Hugh Facey, founder of Gripple, at the Ownership Hub launch, “Our employee owners are committed because they personally have shares in the business—this leaves us in a great position to innovate and grow.”
Employee ownership makes individual firms more productive, but it also can make the economy more equitable, noted Mayor Jarvis. “It is an integral part of a greater effort to not just create a more dynamic, productive and resilient economy, but to reform its structure—to change the system in a way which makes it fairer, more inclusive, and better able to serve the aspirations and needs of the people of South Yorkshire.”
The South Yorkshire Renewal Fund
To spur more equitable growth, Mayor Jarvis noted that Sheffield City Region would be launching the £500 South Yorkshire Renewal Fund, borrowing against its devolved “gainshare” from the UK’s central government. Jarvis plans to invest in local businesses that prioritize social values, including cooperatives. “Cooperatives and employee ownership,” said the mayor, “are tools in a relatively quiet but genuinely radical campaign for fundamental change.”
When Jarvis originally announced the fund in March 2021, he described it as “a comprehensive plan to unlock the potential of our people, businesses and places, so everyone can have a stake in our future prosperity. We will deliver a ‘New Deal for South Yorkshire’.”
In that speech, Jarvis reinforced his vision, noting, “We’re rewriting the rule book, using powers and resources secured from Westminster to invest in our people, our businesses and our towns and high streets. . . . We’re working to create a stronger, greener, fairer South Yorkshire for all, delivering not just recovery, but renewal. Not just a bigger economy, but a better one.”
Expanding employee ownership across the South Yorkshire region is vital to that plan.
Karen Kahn is a communications consultant and the editor of Employee Ownership News.