New index to encourage investment
A new index announced by the Government will encourage investors to put their money into firms in which employees have a stake.
Business minister Jo Swinson said she hoped more companies would "give their employees a greater stake in their future and the success of their company".
The new FTSE-compliant index will help investors identify the 69 UK public companies listed on the London Stock Exchange with at least 3% of shares held by or for the benefit of ordinary staff.
Ms Swinson said: " As we build a stronger economy, there has never been a more important time to promote successful ways of running a business. Evidence shows that businesses that adopt the employee ownership model can be more profitable, create more jobs and are more resilient to economic shocks."
She said last year's review by employee ownership expert Graeme Nuttall set an "ambitious challenge".
"We have made substantial progress in laying the foundations for a thriving and growing employee ownership sector in the UK, but there is more to do to raise awareness," she said.
"The Employee Ownership Index will now mean investors can identify thriving employee ownership businesses and be part of their success. I hope more businesses recognise the value of this model and give their employees a greater stake in their future and the success of their company."
Mr Nuttall said there was still more to do but backed the action taken in the 12 months since the Government responded to his report.
Among steps taken by the Government is the allocation of £50 million from 2014/15 to fund tax breaks for firms adopting employee ownership models.
Mr Nuttall said: " One year on from the Government's response to the Nuttall Review, it is right to say that much has been achieved. I thank all those who have helped make the Nuttall Review recommendations move from the page to reality.
"However the bar has now been raised and there is more to do if we are all to succeed in making this the decade of employee ownership."
Iain Hasdell, chief executive of the Employee Ownership Association (EOA), said: "I warmly welcome the recognition that government is giving to the importance of employee ownership. Employee owned businesses contribute around £30bn to the UK economy each year and are an important and growing part of the emerging economic growth.
"At a time when employee ownership is growing, and coinciding with the international celebration of innovation that is Global Entrepreneurship Week, this government report marks another important step along the way towards employee ownership becoming a central part of UK industrial policy.
"I welcome the commitment and the measures contained in the Government's progress report on their moves to address the key barriers to the growth of employee ownership: namely lack of awareness, the need for simplification and difficulties in accessing finance and advice."
But Mr Hasdell said only "modest incremental steps" had been made in supporting employee ownership.
"The pace and scale of change over the next year will need to be significantly better if the EOA's widely endorsed target of 10% of GDP being delivered by employee owned businesses is to be achieved."