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New leadership group for employee ownership

Published: 27 Aug 2018 00:01

More support for businesses and employees.

A new industry leadership group will aim to make Scotland the best country in the world for employee-owned (EO) businesses, First Minister Nicola Sturgeon will announce today (Monday).

The First Minister will confirm the establishment of ‘Scotland for EO’ when she travels to Arran for a meeting of the Scottish Cabinet. She will visit the Auchrannie resort - one of Scotland’s leading employee-owned businesses.

Under the strapline ‘Employees CAN DO Ownership’, Scotland for EO will aim to increase the number of employee and worker-owned businesses from around 100 to 500 by 2030. It will be backed with £75,000 of Scottish Government funding and will be co-chaired by Jamie Hepburn, Minister for Business, Fair Work and Skills.

Scotland aims to become a world leader in employee ownership and other co-operative models.  Evidence shows that these models perform well in terms of productivity, inclusion and innovation and there is less likelihood of them moving operations outside Scotland.

The First Minister said:

“All the evidence tells us that employee ownership delivers benefits to business performance, the people who work in them and the places in which they are located. This has certainly been the experience of the Auchrannie team in Arran.

“The health of the Scottish economy depends on having a diverse range of business-types and employee ownership clearly has an important role to play in that.

“We want to make it easier for companies and workers to find out more about this model and to move towards it if it’s right for them. Scotland for EO will help to make this into a real option for businesses across Scotland.”

John Clark, chair of employee-owned business Novograf and member of the steering group behind the initiative, said:

“We have a choice: to be passive and allow the development of a support environment for EO companies to happen without industry input, or to take a proactive approach and seek to actively influence how that environment evolves. We believe the proactive approach creates the prospect of making Scotland the best country in the world to establish and grow an EO business.”

The group has been established as the number of employee-owned businesses in Scotland continues to rise. This has been achieved with the support of Co-operative Development Scotland (CDS), a dedicated team within Scottish Enterprise whose remit it is to promote awareness of EO and other co-operative models and provide advice to businesses considering adopting these models.

Sarah Deas, director at Scottish Enterprise and head of CDS, who will be a key member of the leadership group, said:

“The appetite for employee ownership has never been greater. In the last five years the number of employee and worker owned businesses operating in Scotland has trebled and this past year we have been working on a ‘deal a month’ on average.  Our client pipeline is expanding too, indicating take-up of the model will continue to accelerate in future years. 

“Promoting employee ownership helps drive growth in the economy and create greater wealth equality in society.”

Linda Johnston, co-founder and managing director of Auchrannie Resort, said:

“We first started looking at employee ownership in as means of protecting the ethos of the company. The team have been involved in the process from an early stage and were given the opportunity to input throughout.  They are delighted that Auchrannie’s legacy will be protected and that they have the chance to play an active part in, and benefit from, Auchrannie’s future success.  They also realise that what each of them does will affect the future success of the business and that this is directly linked to their own success.  There is no, ‘them and us’ now, we’re all in this together.”

The Cabinet will meet in Arran today (Monday) before taking part in a public discussion at Arran High School.

Background:

There are around 100 employee and worker owned businesses operating in Scotland with approximately 7,000 employee-owners generating a combined turnover of around £940 million.

Led by leaders of Scotland’s EO businesses, as well as Scottish Government, Scottish Enterprise and Highlands & Islands Enterprise, Scotland for EO will create an industry strategy that supports self-sustaining employee-owned businesses to the benefit of employees, business and the economy.