The Mayor of London, Sadiq Khan, has today announced a ground-breaking new partnership with Co-operatives UK and the Employee Ownership Association (EOA) to support more London businesses to become employee or worker owned.
These organisations will now work with the Mayor to create a ‘London Ownership Hub’, building on Sadiq’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 like co-operatives, mutuals, social enterprises, employee-owned, municipally-owned and community-owned businesses.
The Mayor’s team will work with Co-operatives UK and the EOA to develop the networks, resources and conditions to help worker co-operative and employee-owned businesses across London develop and thrive. The Hub will launch in early 2023.
There are more than 1,600 worker and employee-owned businesses in the UK, 30 per cent of which are in London. Despite this relatively low number, they contribute more than £40 billion to the UK economy, providing more than 200,000 jobs.
Employee and worker-owned businesses engage and empower workers to drive performance, while rooting sustainable, good jobs in local economies.
This is particularly important as businesses face difficult economic times, soaring inflation and dwindling consumer spending power. Giving people a stake and a say in their workplace is also a fundamental factor in the Mayor’s Good Work Standard, an accreditation programme for employers modelling best practice in pay, well-being, diversity, recruitment, skills and progression.
Employee and worker ownership has also been found to strengthen the ability of businesses to weather difficult economic conditions. Research has shown that employee and worker-owned businesses bucked recent downturns, with improved staff retention and over half experiencing growth during the first year of the pandemic. Only 1.7 per cent of employee-owned and co-operative businesses ceased trading last year despite a tough 2021, compared to 7.5 per cent for all businesses.
The Mayor of London, Sadiq Khan said: “London businesses have had to weather the perfect storm of Covid-19 and Brexit, followed by soaring inflation and falling consumer spending. In these uncertain times it is essential we don’t settle for business as usual and instead explore every opportunity to help businesses become more resilient and beneficial to local communities.
“Employee ownership creates dynamic, engaged workforces who feel a deep connection and shared purpose with where they work and who they work with.
“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.”