Announced by London mayor Sadiq Khan today (2 December), the partnership aims to support more London businesses as they become worker or employee-owned.
Co-operatives UK and the EOA will work with the mayor to create a London Ownership Hub building on Khan’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 has committed to supporting democratic businesses such as co-operatives, mutuals, social enterprises, employee-owned, municipally owned and community-owned businesses.
“Employee ownership creates dynamic, engaged workforces who feel a deep connection and shared purpose with where they work and who they work with,” he said. “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.”
Khan highlighted how businesses have had to weather the “perfect storm of Covid-19 and Brexit, followed by soaring inflation” – as well as 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.”
His team will work with Co-operatives UK and the EOA to develop the networks, resources and conditions to help worker co-operatives and employee-owned businesses across London develop and thrive. The Hub will launch in early 2023.
According to Co-operatives UK figures, there are around 1,600 worker co-ops and employee-owned businesses in the UK, 30% of which are in London.
Despite the relatively low number, they contribute over £40bn to the UK economy, providing more than 200,000 jobs. And they also engage and empower workers to drive performance, while rooting sustainable, good jobs in local economies, says the organisation, which is particularly important in difficult economic times.
Co-operatives UK research has shown that employee and worker ownership strengthens the ability of businesses to weather difficult economic conditions, with employee and worker-owned businesses bucking recent downturns. These businesses improved staff retention and over half experienced growth during the first year of the pandemic, with only 1.7 per cent of employee-owned and co-operative businesses ceasing to trade in 2021 despite a tough year, compared to 7.5 per cent for all businesses.
“We’re delighted that the Greater London Authority (GLA) has shown its commitment to creating a fairer, more inclusive economy,” said Rose Marley, CEO of Co-operatives UK.
“We can’t continue making the same mistakes of the past: 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 the EOA, added: “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 businesses 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.”