The rise of employee ownership
It’s heartening that both the Labour and Liberal Democrat manifestos agree that employee ownership is a way to increase productivity
It’s no surprise that policy makers see mutually owned businesses as levers and tools to fix some of society’s biggest challenges.
Government is a vast commercial engine, spending in excess of £300bn with businesses and this buying power is how it can shape markets to achieve the policy outcomes it wants. These challenges include making the UK economy more productive, tackling climate change, building skills fit for the internet era, and of course reviving our public services.
Organisations like the Employee Ownership Association point to a large body of evidence that employee-owned (EO) businesses are ideally placed to meet these challenges. It’s heartening that both the Labour and Liberal Democrat manifestos agree that employee ownership is a way to increase productivity and generate wealth, as well as promoting a more ethical approach to business.
Employee owned organisations like dxw invest heavily in their workforces and improving their own practice. In our case that’s about creating affordable public services that work for everyone. And we have done this against the backdrop of incredibly challenging trading conditions.
Alongside delivering high quality work for clients, dxw makes a wider contribution to the digital public realm. Our developers’ contributions to the open source software community are re-used by digital teams across government. Our playbook is often referenced along with our recently launched accessibility manual, all of which creates added value for our clients and others working across the public sector.
People come to dxw to work on meaningful things while learning how to deliver high quality services. Often they move on to other organisations and take those learnings and approaches with them. This is another way in which we are able to influence our industry for the better and continue to develop and iterate the best modern approaches to our work. The value we create is reinvested in our people and the company, benefiting our clients, local communities and the economy.
The Labour manifesto pledges to double the size of the co-operative and mutuals sector alongside changes to procurement rules to make it easier for SMEs to win contracts. The Lib Dems go even further, “giving staff in listed companies with more than 250 employees a right to request shares, to be held in trust for the benefit of employees.”
At dxw, our EO mandate is enshrined in our deed of trust, the legal basis on which we operate. It means that we have to run dxw for the benefit of staff but also for the users of the public services we build. Business is about trade-offs and choices and having this layer of governance means that our company makes decisions with those two guiding principles.
Having employee and independent voices on our board of trustees adds a layer of accountability that many other businesses lack. It means our clients can trust that we are delivering what they need and doing that in line with their own values as public servants.
There are, I’m afraid, far too many examples of cynical practice in public procurement, whether that’s the PPE scandals of the COVID years or the oligopolies of IT firms delivering sub-standard work.
An early stage EO business is forced to be productive. Businesses have to generate enough profit to be able to pay for the shares in the business while at the same time having capital to invest in the long term.
We chose employee ownership for dxw because we believe it will create a sustainable business for the long term. The UK faces immense challenges in its public services and we are about to embark on a long period of renewal.
The rise of AI is touted as a potential saviour and there’s no doubt that it will play a huge part. However, it also requires openness and transparency to succeed in the digital public realm. EO businesses are the best placed to achieve this degree of trust in an era of profound mistrust.
dxw is not the only EO business working with the public sector and I know that we will see many more emerge in the coming years.
We will be at the vanguard of public sector renewal, building the skills and capability that will make the UK more productive and creating wealth that remains in UK communities.