Drive to boost employee ownership through new leadership group

A drive to boost the number of employee-owned businesses in Scotland through a new industry leadership group will be announced today by First Minister Nicola Sturgeon.

Visiting the employee-owned Auchrannie Resort on Arran, Ms Sturgeon will confirm the establishment of "Scotland for EO", which will be tasked with creating an industry strategy that supports self-sustaining employee-owned businesses to the benefit of the wider economy.

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.

Advocates of EO claim the 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 businesses already operating have a total of approximately 7,000 employee-owners generating a combined turnover of around £940m.

At present the businesses are supported by 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, claimed: "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 takeup 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."

The First Minister said: "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."

Linda Johnston, co-founder and managing director of Auchrannie Resort, added: "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."