At a glance:

Douglas Roberts, Partner in Lindsays’ Corporate team writes about the growth of employee ownership and the benefits of this growth to the Scottish economy.

 

By 2030, the Scottish Government hopes the country will be home to 500 employee-owned companies. It’s an ambitious target which requires sustained focus, but Douglas Roberts is in no doubt that achieving it is great news for Scotland.

 

We are witnessing a real awakening as to the benefits that businesses becoming owned by their staff brings, not just personally but for the fact that it locks jobs, wealth and talent in Scotland. Employee ownership’s part in our long-term recovery from the coronavirus pandemic cannot be overlooked.

 

Employee-owned (EO) companies are increasing in importance as part of our national economy. Their influence is only likely to grow as we move through the next decade.

 

There are currently just over 100 EO companies based in Scotland. Thirty more are forecast to make the transition this year. That’s twice as many as did so during 2020.

Maintaining that trajectory is critical if we are to reach the 500 milestone that we are working with others to help achieve.

 

In the past four years, Douglas has helped advise more than 15 firms on the legal aspects of their EO switch. With each, he sees benefits filtering through the organisation. There is a change in mindset.

 

Of course, EO is not right for everyone. It’s important we acknowledge that. Having the right team, operating in the right sector, is critical.

 

However, for those where the circumstances are correct, we are seeing growing evidence of the fact that staff in employee-owned companies work harder and provide better service because they are more engaged and benefit from the profits.

 

A common question that raised is ‘what’s the benefit to the seller?’. For most owners money is not the main driver.  What is most important to them is knowing they are leaving a business – their business – which they have spent blood, sweat and tears building, in the hands of people who are as passionate about it and in their community. Jobs are safe and loyal staff rewarded. Also, their departure can be phased over a number of years and at their chosen pace.

 

From a legal and financial point of view, the greatest is that they pay no Capital Gains Tax (CGT), saving them thousands of pounds in taxes (possibly millions) depending on the size of the business.

 

The process can be done far quicker and with reduced transaction costs – including legal and accountancy fees – because there is not the need for extensive due diligence and confrontational negotiations over the legal documents.

 

Then there is the fact that research has shown other benefits to include healthier and happier staff, increased staff retention, better attendance, more innovative employees and, ultimately, happier customers.

 

All of this could prove pivotal as our economy recovers and rebuilds from the pandemic. Research after the 2008 credit crunch showed that EO companies outperformed non-EO companies. As a result of the staff having ownership of the business they “stick together” and work harder knowing that they will all benefit rather than just a few shareholders. There is less of the “them and us” attitude.

 

There are different levels of EO, from share options to selected members of staff through to the employees or an employee ownership trust owning 100% of the company. Due to legislation introduced in 2014, most EO deals involve the process of more than 50% of a company’s shares being transferred to the staff. This is typically done by entrepreneurs or family-owned businesses as part of their succession plans. They also attract strong tax benefits.

 

When a company transitions to EO then, subject to meeting certain requirements, the shareholders who sell pay no CGT. Due to Business Assets Disposal Relief, most shareholders pay CGT at 10% on the first £1million of a sale which means that someone selling a company for £1 million, for example, walks away with an additional £100,000. Recent changes to CGT make this even more attractive.

 

Tax, of course, should not be the main consideration. It’s vital to look at the entire picture especially that an EO culture will work for the business.

 

Far too often we have seen Scottish companies sold and their main administrative roles – often the highest paid – moved out of the country or for operations here to end entirely. Having companies owned by Scottish employees who keep the jobs in Scotland can be a significant boost and one our economy and local communities need.

 

Douglas Roberts is a Corporate Partner at Lindsays

douglasroberts@lindsays.co.uk

Equate Scotland is offering a free online workshop for employers, employees, and educators in STEM and the Built Environment. Take the opportunity to learn more about the experience of women in STEM, and a broader discussion on equality, diversity and inclusion. Join our free 2-hour online workshop to learn more about the steps that you can take to mitigate inequality.

From the lens of the underrepresentation of women in STEM, we will explore how biases impact our interactions and decision-making processes. We will review strategies for recognising and counteracting inequality in the workplace.

This is an open session for employers, employees and educators of all genders within STEM fields in Scotland.

In this session, you will learn:

• How and why we make choices/decisions about people
• Types of biases and cultural influence
• Where and how bias influences the workplace
• Recognising and counteracting bias

To find out more and register, follow: https://equatescotland.org.uk/event/skills-to-reduce-inequalities/

Barclays Eagle Labs is launching its second 12-week virtual accelerator programme, designed to help early-stage tech businesses founded by one or more Black entrepreneurs, in order to continue to help boost diversity in entrepreneurship.

 

The accelerator, in partnership with Foundervine, an award-winning social enterprise specialising in digital start-ups, includes a series of expert masterclasses focused on a number of core business skills, including product development, sales strategy, operations and leadership. The founders will be mentored by and receive professional coaching from scale-up experts.

 

Applications are open until the 8^th October to UK-based digital and tech start or scale-ups with a minimum viable proposition for their business and with one or more Black founders.

 

Over 200 businesses applied to take part in last year’s Accelerator, of which 25 successful businesses were selected. This year the cohort will increase in size, with 40 businesses to be selected to participate in the programme.

 

All applicants to the Black Founders Accelerator programme, whether they are successful at securing a space on the Accelerator or not, will receive ongoing support from Barclays Eagle Labs, through events, wider programmes, learning materials, mentoring and by building peer networks.

 

For those 40 businesses selected to participate in the programme, the Accelerator will commence on the 22^nd of November and will last 12 weeks, culminating in a Demo Day in February 2022, at which a number of founders will have the opportunity to present their business to potential clients and investors. In addition, through the programme, participants will gain access to the UK-wide Eagle Labs network and exclusive access to community events through Barclays Eagle Labs.

 

One company to benefit from the 2020 Black Founder Accelerator is ScribePay, a fintech focussed on the subscription payments market, building an app and virtual payment card offering that will allow consumers to have full visibility and control of their subscription payments, working to solve the ‘subscription trap’.

 

Delphine Emenyonu, co-founder of ScribePay, said: “I applied for the Barclays Black Founder Accelerator because we were in a stage where we needed to develop our idea into a potential working solution, so the accelerator came at the right time when we needed a boost to take it to the next step. The fact that it was dedicated to Black founders appealed to me – it’s very challenging to be a founder but there is additional challenges being a person of colour, so I felt it would meet both my business needs and my cultural needs as well.

 

“I learnt so much from the programme and it has really accelerated our business – when I first came, it was just an idea, now we’re building the MVP. And when the programme ends, it’s really the beginning, you become a Barclays Eagle Labs alumni, gaining access to online resources, events and networking opportunities that have been instrumental in driving our business forward.”

 

Liz Boadi, Ecosystem Manager at Barclays Eagle Labs and the 2021 programme lead, said: “After the success of the 2020 Black Founder Accelerator, we knew we had to run another accelerator and open it out to more founders. The feedback we received from last year’s cohort was amazing and we want to build on that and help even more Black entrepreneurs this year. We hope by giving the founders access to the knowledge and expertise we can help accelerate their growth and unlock the potential that we know is waiting.”

 

Izzy Obeng, Managing Director of Foundervine, said: “Foundervine are proud to be partnering with Barclays for a second year. The Barclays Black Founder Accelerator is designed to elevate founders and remove barriers. We do this by connecting them to the mentorship, resources and training they need to move their venture to the next level. Whether that’s raising their first round of funding or making their first sale, the Foundervine network is here to make that happen.”

 

For more details on Eagle Labs, or the Black Founder Accelerator, visit https://labs.uk.barclays/barclays-black-founder-accelerator

 

For more information about Foundervine, visit https://www.foundervine.com/

• New travel company to be called “Lumo”
• 100% electric rail service to go head-to-head with domestic air travel
• First services to run on 25^th October
• Fares will start as low as £14.90 between London and Edinburgh
• 60% of all single fares will be available at a cost of £30 or less
• Over 1 million additional passenger journeys added to East Coast Main Line per year
• Rail travel generates six times fewer carbon emissions than travelling by plane¹
• Service will contribute £250m to the economy over 10 years²

A new, 100% electric rail service is to start running between London and Edinburgh with fares for as little as £14.90 in a bid to encourage greener and more affordable travel between the capitals.

Called Lumo, it will provide low-carbon, affordable long-distance travel for over 1 million passengers per year. Over 74,500 passengers currently fly between Edinburgh and London each month³.

And with single tickets between the capitals starting from just £14.90, Lumo will be a comfortable, convenient alternative to flying that is affordable for all. Some 60% of all single fares will be available at a cost of £30 or less⁴.

Rail travel already generates six times fewer carbon emissions than travelling by plane¹. Lumo expects to be even more carbon efficient than the average rail service because its trains are 100% electric.

Services start on 25^th October, with their frequency increasing over time to a maximum of ten services per day by early next year.

Helen Wylde, Managing Director for Lumo, said: “Travelling in the UK should not cost a fortune and it certainly shouldn’t be the planet that pays. Whatever your preferred mode of transport, we are likely to be more affordable and kinder to the planet.

“We believe everyone has the right to travel in style. We are empowering people to make green travel choices that are genuinely affordable without compromising on comfort.”

Lumo trains will run on the East Coast Main Line and call at Newcastle, Morpeth and Stevenage, helping to improve regional connectivity while offering alternatives to Newcastle and Luton airports.

As airports are seldom city centre destinations and frequently require onward travel arrangements, Lumo aims to encourage flyers to move to rail. Its trains are ergonomically designed for comfort and ease, helping passengers to work or play at their custom-designed seats, which all come with adjustable tray table, privacy wings and personal lighting.

Lumo aims to create over 13 million additional passenger journeys in the next decade as well as reducing carbon emissions by encouraging travellers to use greener, electric travel. It will contribute as much as £250m to the UK economy over ten years.

Owned by FirstGroup, Lumo has invested £15m on digital and IT infrastructure and £100m on the manufacture and maintenance of five brand new, state-of-the-art Hitachi AT300 intercity electric trains⁵.

Lumo offers passengers a blueprint for low-carbon, affordable long-distance travel in the UK with seats ergonomically designed and tested for longer journeys. With a new at-seat catering service from high street brands called LumoEats, simplified fares, free Wi-Fi, paperless ticketing, a new entertainment system and a single class of quality service for all passengers, Lumo aims to reset standards for travel.

Helen Wylde added: “The reasons people choose different modes of travel are changing. People are now considering their impact on the environment very carefully. They also expect better service and catering. Lumo is a new rail travel experience that is kinder to the planet and better value for passengers, while never compromising on service.”

Lumo intends to publish its carbon emissions data on a regular basis to feed its carbon calculator, which allows passengers to calculate the carbon impact of their Lumo journey and compare it with other ways to travel.

In addition, over 50% of the on-board catering menu is plant-based; staff uniforms are responsibly sourced and can be entirely recycled; and paper waste has been dramatically reduced by being a digital-first business.

Helen Wylde commented: “Travelling by rail is already the greenest form of long-distance travel in the UK. Lumo will take this further, being the ‘greenest in class’ with state-of-the-art electric trains and a service to match. We have a commitment to finding greener, smarter and more comfortable ways to get people from A to B – and we welcome anyone’s perspective on that.”

Lumo has invested £2 million in a Training Academy to develop a fresh-thinking generation of rail colleagues, focused on passenger wellbeing and on-board customer service, harnessing new technology and caring for vulnerable passengers. This month, 15 customer driver apprentices will graduate from the Academy.

Scotland’s canine companions will be strengthening their muscles thanks to a new physiotherapy service launched by Edinburgh Dog and Cat Home.

The private service will be based at the Home’s site in Seafield, Edinburgh, and provided by a qualified veterinary physiotherapist, following referral by a veterinary practice.

 

Customers can also rest assured that their consultation fees are going to a good cause. Profits will provide an essential income to the rescue centre, which cares for stray and unwanted dogs and cats, and works in the community to educate on animal welfare and keep pets in loving homes.

 

Dog owners can expect a range of therapeutic treatments for their pets, rehabilitating everything from orthopaedic and neurological conditions to general stiffness, lameness and post-surgical cases.

 

Jamie Simpson, Director of Operations at Edinburgh Dog and Cat Home, said:

 

“Just like humans, our pets can suffer with long-term physical injuries that affect their quality of life, especially in old age or if they have undergone surgery. There is overwhelming evidence that physiotherapy can improve outcomes for dogs and helps them to exercise in a way that improves both their physical and mental health.

 

“Here at the Home we have been caring for injured and post-op pets for nearly 140 years, so we thought it was about time we put our expertise to even better use and offer this service to the public. The best part is that by bringing your dog for physiotherapy at Edinburgh Dog and Cat Home, you are ultimately helping us treat, rehabilitate and rehome the hundreds of stray and unwanted pets that we do every year.”

 

For more information about Edinburgh Dog and Cat Home’s physiotherapy service, please visit edch.org.uk/canine-physiotherapy

Sustainable Thinking Scotland (STS) has become the first social enterprise in Scotland to secure investment from the Catalyst fund. STS has received an investment of £190,000 to enable them to bring their biochar technology to market. The fund’s innovative funding mechanism means that the social enterprise will repay the investment via a share of their revenue as the business grows.

 

The Catalyst Fund, launched in June this year, is designed to finance ambitious social enterprises in Scotland. It offers loans starting at £50,000 using a revenue-based repayment model, providing social enterprises the flexible finance they need in the early stages of development, without compromising their social mission. The fund, made possible by a £15 million investment from the Scottish Government, is delivered by agencies Firstport and Social Enterprise Scotland.

 

Sustainable Thinking Scotland CIC was established in 2016 by Sean Kerr and Stephen McQueen to help tackle social and environmental issues in their local area of Bo’ness, Falkirk.

STS approached the Catalyst Fund to help them fund the development of their biochar water remediation technology. Biochar, similar to charcoal, is obtained from ‘baking’ waste wood and other biomass at high temperatures and can draw down carbon from the atmosphere into the soil, storing it for hundreds to thousands of years.

 

Biochar was highlighted in the 2019 IPCC Special Report on Climate Change and Land as a product that ‘could make a significant contribution to mitigating both land degradation and climate change, simultaneously’. It has several applications, but STS’s innovations enable it to be used as a bio-absorbent to tackle the problem of nutrient pollution in waterways, which can lead to toxic algae blooms. Once ‘charged’ with nutrients and re-collected, the biochar can be added to the soil used in food production, demonstrating the circular economy approach in action.

 

STS will use the investment to accelerate the growth of the biochar project, increase production capacity and R&D, as well as to employ staff and develop core business operations for the intended scale up.

 

Sean Kerr, Director at STS, said: “Our mission is to be Scotland’s leading organisation in the development and targeted application of biochar, driving innovation within water remediation technologies and land management, creating a circular economy model which benefits both our environment and the people within our communities.

 

The Catalyst Fund investment is a significant milestone in the development of our social enterprise, and together with the business support and connections provided by Firstport, will be the catalyst which allows us to drive innovation and regulation within these new carbon markets, helping to set the standards for environmental recovery, whilst contributing towards Scotland’s Net Zero ambitions”.

 

Daisy Ford-Downes, Head of Group Investment Programmes at Firstport, said: “We are so proud to have STS as the first company in the Catalyst portfolio. Sean and Steve set a high bar for a new generation of ambitious, high growth social enterprises serving people and planet. They have developed an exciting new technology that simultaneously tackles pollution, captures carbon and increases crop yields for community food production, and we are looking forward to supporting them as they bring this to the market.”

 

The Catalyst Fund is currently open for Expressions of Interest. More information about the fund and STS can be found on the Firstport website.

Based out of Aberdeen, Moment has gone from strength to strength. Weathering the pandemic with a growing team and an increasingly impressive list of clients.

Moment has been lucky enough to see huge growth potential, particularly over the last six months. With this growth comes new opportunities, and we have assembled our latest management team to streamline our services, and continue to develop our business model. We now have three teams: Commercial, Campaign and Creative. With our management team in place, we can keep communication flowing between teams to ensure we meet the goals of both Moment and our clients.

By Q2 of 2021, we have welcomed eight new team members, with another one on the way. This more than doubles our team total to 14 by September 2021.

We have been lucky enough to take on three new apprentices as part of the QA Apprenticeship Scheme. We interviewed a variety of applicants enrolled with QA and made our selection based on who we thought was best suited to our Moment culture. This has allowed us to see our apprentices grow within our team, whilst carrying out personal studies alongside this work.

“The formation of Moment’s Management Team was a critical step that empowers our next phase of growth. With strong team leads now in our Commercial, Campaign and Creative functions; we’re set to drive forwards into new markets and work with existing and new clients at scale. With these senior strategists on board, we can put together design-led, data-driven plans for the marketing tactics that will work best for each unique business; and then focus on delivering these via our in-house team of channel-specific experts.”

Adam Bell – Delivery Director

As a company of creatives, Moment is looking to break away from the traditional format of CV-based recruitment. This has led to the launch of the Social Media Showdown. This innovative new way to attract talented social media marketers allows for an exciting, different creative challenge to candidates, allowing them to show exactly what they would bring to a role, rather than a stuffy old CV and Cover Letter. Candidates are invited to design and create a social media schedule, as well as video or image posts for relevant channels.

Candidates are invited to submit their creations at: https://www.moment-hq.com/social-media-showdown

To get in touch about sustainable marketing and services, go to: https://www.moment-hq.com/

AM Bid, Scotland’s largest bid and tender company, has created its first digital platform designed to help SMEs rebound from the challenges of the pandemic.

The bid specialists have spent the past year working on the Ultimate Tender Coach, an online modular training programme that unlocks the secrets of successful UK public tender writing and development.

Throughout the programme, it offers industry insights, outlines how the public procurement process works, but more importantly, provides the knowledge SMEs need to navigate it, and to develop compelling tender responses that will help them win more business.

It is aimed at businesses that are currently bidding for public contracts and not winning them, or not winning enough of them, or those that want to bid for them but don’t understand the process or what it takes to develop a winning tender.

AM Bid founder and business development director Andrew Morrison, managing director David Gray and bid development director Philip Thomson have combined their 40+years public sector bidding experience to provide SMEs with the tools and expertise to create more effective tender responses.

The company, which launched in 2014 and operates in more than 25 sectors, has achieved an independently audited industry-leading bid success rate of more than 80%. The firm created the platform in response to findings of a nationwide report it commissioned into the challenges faced by businesses when it comes to bidding successfully in the public sector.

The latest research, detailed in the report Navigating the Public Procurement Minefield, reveals that over 90 per cent of UK SMEs surveyed think the public sector should be more accommodating and do more to remove the tendering barriers they face when bidding for public sector contracts.

David Gray, AM Bid managing director, said: “This reflects our initial research which showed the vast majority of SMEs find the public procurement process challenging, so we created Ultimate Tender Coach to help them. We’ve crammed over 40 years of successful public tender winning experience into a digital learning programme that will help them win contracts they’re very capable of delivering.”

“During the pandemic, it was clear that businesses developed an increased appetite for digital learning but the challenge most SMEs have is finding the time for it. In response, we’ve created a flexible learning programme that people can work through at their own pace, fitting their learning around the demands of running their business. We’re also offering weekly coaching calls and a private members group, to build a community of SMEs committed to winning more public contracts.”

Our latest report comes as the UK Government is preparing the next stages of its Transforming Public Procurement strategy, which aims to speed up and simplify the procurement processes faced by bidding parties and to reshape public procurement for generations to come.

Westminster wants £1 in every £3 of public procurement money spent with SMEs by 2022, a level which would represent a huge leap from the current rate of around 12 per cent of the estimated £292 billion spent by government on private sector services annually.

From a raft of proposals contained in the Green Paper, which closed for consultation earlier this year, a new, more flexible approach to procurement is planned with the aim of making it easier for SME businesses to win more public contracts.

The survey of UK SMEs drawn from a diverse range of sectors and service lines revealed that over 90 per cent of SMEs agreed that for the Government to achieve its ambition of a more inclusive procurement landscape, barriers need to be removed from SMEs to create a more level procurement playing field.

Among the barriers cited by SMEs were the overall complexity of the procurement process (44%) and the lack of publicity for opportunities (41%) which were both highlighted by over two-fifths of respondents. Also, over a third were dissuaded either by finding the process too time consuming (37%), difficulty meeting mandatory qualifying criteria (35%) or by finding the process too costly based on being unsuccessful in the past (34%). While one fifth (20%) were concerned that the incumbent supplier would simply be reappointed.

“SMEs have given Government a clear signal that they want to be involved in tendering and winning work from the public sector but also that they want the barriers removed. They want Government to do more,” added Mr Gray.

“The perception that public contracts are a closed shop can be a deterrent to businesses. They want to bid for contracts and are prepared to do so but there are so many perceived barriers in their way; some throw the towel in even before they start.

“Government must use the opportunity of its procurement reforms to level the playing field for small businesses to help build a fairer procurement landscape where businesses of all sizes have equal opportunities and stand a greater prospect of winning lucrative and bankable contracts.

“The Ultimate Tender Coach will give those SMEs the training and guidance they need to develop compelling bids and win more  public contracts.”

A growing recruitment consultancy has firmly placed its roots in Edinburgh by moving into a dedicated office space in the city.

ORB Recruitment, which has its headquarters in Doncaster, South Yorkshire, expanded into Scotland earlier this year in a move headed up by Edinburgh-based Alan Wallace who became part of ORB’s senior management team

The team of three has moved into the prestigious Pure Office development in Edinburgh Park. The 300 sqft smart space offers room to expand and provides a high standard workplace for the team to meet, relax and work in an ideal local next to important transport links.

Alan said: “We opened up our Scotland presence earlier this year but due to Covid pandemic we were not in position to get a new office until now. We are delighted to be moving into our new suite at Pure Offices which has a perfect location for our needs with excellent transport links and a really strong and established business community already within the development.

“Things have gone really well for us on the past six months and we have been working on some exciting new projects focused on permanent and contract hire recruitment across key development sectors in engineering, construction, food and drink, supply chain, and community-based health care services. Our aim is to develop tailored and bespoke recruitment solutions for talent attraction for businesses throughout Scotland and we are always looking forward to the next challenge. Getting this office space means we can now look ahead to growing our business here and really making our mark on the recruitment sector here.

“I am currently joined by recruitment consultant Chantelle Darkings who will split her time between the Doncaster and Edinburgh offices, as will our managing director Stewart Olsen, but we have also very recently appointed another full time senior team member. It’s a really exciting time for ORB and I’m thrilled to be part of it.”

ORB Recruitment has grown substantially since setting up in Doncaster in 2018, and aims to be the biggest recruitment consultancy in Yorkshire as well as developing its presence UK wide starting with this brand new office in Scotland.

Stewart Olsen, managing director of ORB, said: “We have strong growth plans in place to quickly establish the ORB name across the Scottish market place, and opening a dedicated office with a dedicated team is just the start. It gives us the scope to increase the size of our team in the future and build our work capacity.

“Edinburgh is an excellent geographical location to set up our Scottish operations, it’s the Scottish capital, and has progressed to be a vibrant hub that has an excellent ecosystem of technology SMEs and organisations that require a high demand for quality candidates.”

ORB, which has continued to be busy over recent months, supplying key workers into the healthcare sector throughout the coronavirus pandemic, as well as working with the manufacturing and production, construction and engineering industries, is a specialist, dedicated recruitment consultancy offering outstanding service and effective solutions to clients across the UK.

For more information, visit www.orb-recruitment.co.uk.