Having a Mayor! Can elected mayors make a difference?

9 March 2012

Speakers

• Lord Shipley, Cities Adviser to HM Government
• Dave Hodgson, Mayor of Bedford
• Gerald Vernon-Jackson, Leader of Portsmouth City Council
• Chair: Anthony Rowlands, CentreForum

With the current media debate surrounding the role of elected mayors within British politics, CentreForum's Friday evening fringe event at the Liberal Democrat spring conference welcomed Gerald Vernon-Jackson, Lord Shipley and Dave Hodgson to discuss the issue.

Lord Shipley was in favour of major cities throughout the UK having elected mayors. Citing the examples of London and other major European cities, Shipley believed that the economic potential of the UK's major cities was being thwarted through the lack of representation on the global stage when competing for future investment opportunities. 

Additionally, given the modus operandi of the Localism Bill and the current appetite for greater devolutionary powers throughout the UK, Lord Shipley believed that it was time to move on from the existing structure.

Gerald Vernon-Jackson was slightly more sceptical over the role of elected mayors describing the inevitable concentration of power to a single individual as fundamentally illiberal and undemocratic.

Citing examples of where previous flirtations with a mayoral system had been disastrous for the local community, Vernon-Jackson believed that a more appropriate reform would be to engage all elements of a community in the running of the city. The proposed wide spread implementation of city mayors failed to address what was actually needed.  

Dave Hodgson sought to recognise Vernon-Jackson's concerns surrounding the concentration of power to a single individual and the various pitfalls that this characteristic entails. Through the implementation of a "checks and balances system", he believed the mayoral system was viable. 

Hodgson also supported Lord Shipley's contention that the introduction of a figurehead would bring a new facet of soft power to the external affairs of local politics. But he cautioned that the proposal did not constitute a fix that could be applied to under performing councils and thus believed the introduction of a city mayor should be carefully considered.

Report by Callum Biggins

John Lewis or Esop's fables: is greater employee ownership the future for the UK economy?

9 March 2012

Speakers

• Norman Lamb MP, Minister for Employment Relations
• Campbell McDonald, Baxi Partnership
• David Erdal, author of 'Beyond the Corporation'
• Claire Buckingham, John Lewis Newcastle
• Chair: Chris Nicholson, CentreForum

Event sponsored by Baxi Partnership

CentreForum’s fringe event at the Liberal Democrat spring conference, 'John Lewis or Esop’s fables', engaged with the debate surrounding employee share ownership. This issue has been politically popular in recent months as the leaders of all the main parties have sought to propose policies that can fix a ‘broken’ capitalism and create a more equitable ‘John Lewis economy’. As Norman Lamb MP pointed out, there is a longstanding liberal vision behind the idea, going back to J.S. Mill’s call for the coordinating of the interests of labour and capital. However, as the new employment minister also noted, there has not been enough advocacy for the policy in recent years and the time is right for it to be re-established as a liberal vision. 

There are signs that this is beginning to happen. Nick Clegg’s recent speech to the City of London has 'electrified' the sector of employee ownership and in July the Liberal Democrat policy group will publish proposals about how Employee Share Ownership Programmes (ESOPs) can be extended across other parts of the economy.

Campbell McDonald of the Baxi Partnership, a firm which seeks to help other organisations mutualise successfully, highlighted how the employee ownership model can help drive growth in the real economy, citing a 3.5 per cent productivity lift and a halving of absenteeism as a result of mutualisation. The model is also much more successful at retaining talent within organisations and drives ideas generation and greater entrepreneurialism within the workforce. An example of this was given by David Erdal, who described how a team within his family owned paper mill produced savings of £150,000 per annum through applying their knowledge to implement a more efficient production process. 

ESOPs could also have a protective effect on the economy in the long term. The panel noted how one of the major contributions to the 2008 financial crisis was over reliance on the single business model of the PLC, and that mutualised companies represented a way to rebalance the economy, not just around different regions and sectors but with a range of different types of company as well. Furthermore, employment data has shown that employee owned companies have been more resilient during the downturn, have been able to retain more staff, and have been able to minimise the impact of any job losses that were necessary.

However, the panel talked about a number of barriers which would have to be overcome for employee owned companies to take a greater role in the economy. First, there is currently an institutional bias in favour of PLCs and against mutualised companies within the world of professional and financial services. Lawyers, accountants, and financiers are generally sceptical about the idea of employee ownership and this presents problems for companies who wish to move towards a mutualised model. Significantly, financiers generally will not invest in employee owned companies as it is a business model which cannot be sold on. Furthermore, the lack of an ‘off the shelf’ model which can be easily understood by accountants and lawyers means that the process of converting a company to employee ownership is often prohibitively difficult. While a ‘one size fits all’ approach is often unhelpful in these circumstances, as the needs of each company and the level of mutualisation appropriate to them vary significantly, the aim should be towards a basic model which is open to adaptation as a way of lowering the barrier to entry for employee owned companies.

Report by Christopher Bond