31st October 2012
The Department for Business, Innovation and Skills has published its response to the Nuttall Report on Employee Ownership which was released in July 2012.
The Government has expressed its intention to boost the size of the sector by ensuring employee ownership is more widely understood and easier to establish.
Its action plan includes commitments to:
- Establish an implementation group chaired by the Minister for Employee Relations
- Assess the viability of setting up an independent Institute to raise awareness of employee ownership
- Work with practitioners to develop simple “off the shelf” templates for setting up an employee owned company
- Organise a Ministerial programme of regional activity to raise awareness of employee ownership
- Work with John Lewis Partnership to examine barriers to funding for private sector employee-owned companies
The Government has also launched a consultation on amending company law to reduce the regulatory burden faced by employee owned companies, particularly with regard to the purchase of shares from former employees. The consultation period closes on 16 November 2012.
The Nuttall Report can be found at: http://www.bis.gov.uk/policies/business-law/employee-ownership and the Government’s response at: http://news.bis.gov.uk/Press-Releases/Action-to-boost-employee-ownership-sector-approved-68273.aspx
The consultation on share buy backs can be found at: http://www.bis.gov.uk/Consultations/employee-ownership-share-buy-backs-implementation-nuttall%20review-recommendation
This latest indication of Government support for wider employee ownership is encouraging but seems to be limited to further discussion at this stage. Until we have specific proposals and timetables for implementation, it is difficult to judge whether game-changing action is really on the cards.
The Nuttall Review identified the obstacles to wider employee ownership and suggested actions to remove them. BIS has now voiced its support – a small step where we now need a giant leap if the Government is to make a significant difference. We also need to see how far the Treasury is prepared to go in removing tax obstacles to employee ownership, when it announces the conclusions of its own review.