The Employee Ownership Association's (eoa) newly launched UK Employee Ownership Growth Strategy is, by its own description, the most ambitious campaign in the organisation's history.

The strategy sets an ambition to expand the UK EO sector from a 2025 baseline of roughly 2,700 employee-owned businesses (EOBs) and about 335k-360k employee-owners to 7,500 (stretch 10,000) businesses and 500,000-700,000 employee-owners by 2030. This implies the creation of between 4,800 and 7,300 additional EOBs in five years, roughly 200-300% growth. It will require annual transition rates significantly higher than those achieved at any point to date.

The timing could hardly have been worse. As the eoa unveiled its growth strategy at their annual conference in late November 2025, the government announced Capital Gains Tax (CGT) changes in the Autumn Budget.

From November 2025, only 50% of the gain on a qualifying Employee Ownership Trust (EOT) disposal would be exempt, with the remainder chargeable. The core financial incentive driving transitions had been materially weakened, although the effective rate of 12% remains attractive compared to standard CGT rates.

The eoa issued a statement that they were "blindsided by this 50% cut to CGT relief on sales to EOTs." As yet, there is no evidence on the association’s website of any recalibration of the targets considering this new fiscal reality. Placeholder text like "£xx by 2030/xx%" signals unfinished analytical work, suggesting revisions were still forthcoming.

Achieving the scale of expansion as currently outlined was already challenging on the underlying numbers. It becomes significantly less realistic given the government's decision to halve CGT relief. HMRC's May 2025 qualitative evaluation found that for former owners using EOTs as an exit strategy, CGT relief was a key factor in choosing this route over alternatives—some stated they would not have chosen an EOT without it, while others said its absence would have made the decision considerably harder. Halving this incentive weakens a critical driver of owner behaviour precisely when the strategy demands a dramatic acceleration in transitions.

The eoa deserves credit. Ambition is welcome. Employee Ownership has a strong evidence base, a compelling social and economic case, and clear relevance to succession, productivity, and inclusive growth.

The strategy is at its strongest when articulating the rationale. The benefits cited are well supported by UK and international evidence. Likewise, the strategy accurately diagnoses several structural barriers to EO growth, including low awareness among business owners and advisers, perceived complexity of EOTs, gaps in EO friendly finance, heavy dependence on government policy and tax treatment, and the importance of diffusion and peer imitation.

As a statement of intent and advocacy, this framing is coherent and persuasive.

The high-level narrative is clear. The difficulty arises when the document moves from advocacy to delivery. Here, it is thin on actionable levers, owners, and trade-offs.

The headline goals are striking: an implied 200–300% growth in five years. The numbers in the scorecards imply a step change in annual transitions that is supported neither by recent performance nor the changing tax environment.

Looking at the historical growth data reveals significant issues:

Sector growth has declined dramatically from 46% (2021) to just 9% (2025), with a projection of 17% assuming additional conversions materialize.

The strategy requires a 140-260% acceleration from the 2020-2024 average annual growth, while the actual trend shows deceleration. The most recent year (2024-2025) saw only 200 new businesses. This will need to grow to 1,000-1,500 annually starting immediately. The stretch goal implies roughly doubling or tripling recent transition volumes every year and sustaining that pace for five years.

Growth is clearly decelerating, even before accounting for CGT changes. The 2021–2023 surge likely reflects pent-up succession demand, favourable tax conditions, and post-pandemic restructuring. The 2025 slowdown is a structural signal, not noise.

There may very well be a story behind the declining sector growth rate reflecting classic market penetration dynamics: easy early adopters captured, now hitting harder cases. The EOT structure was introduced in 2014, now over a decade ago. If the model was going to achieve exponential "imitation" growth naturally, we would already be seeing it. Instead, the pattern suggests the sector is moving beyond enthusiastic early adopters into a more challenging phase where conversion requires deeper engagement, better infrastructure, and stronger value propositions beyond tax relief alone.

The strategy assumes this deceleration will reverse without explaining why, especially given that reduced CGT relief makes the financial incentive weaker. Projecting a return to sustained high growth without materially new levers is optimistic at best.

The jump from 2,700 EO businesses in 2025 to 7,500–10,000 by 2030 assumes a very large, easily convertible pool of succession-ready firms.

Historic transitions have been 300–550 per year; the targets imply 1,000–1,450 net new businesses annually, effectively assuming both that the "addressable market" is several times current throughput and that barriers (owner preferences, finance, adviser inertia) can be overcome rapidly without strong evidence.

The strategy treats EO as if it can capture a large share of owners currently considering trade sale, MBO, or private equity, but provides no evidence on the realistic substitution rate given narrowed tax advantages. It assumes that messaging, awareness and "policy influence" can materially shift deep-seated adviser and owner behaviours within five years, while underplaying the strength of incumbent exit routes.

In an environment where EO already competes with trade sales and private equity exits, the recent government move is likely to depress, not accelerate, transitions. Maintaining the historic 400–600 annual transitions looks challenging, let alone tripling them.

Employee owner growth targets are equally ambitious relative to historical performance.

The targets now require 109-200% growth in the next five years, compared to 67.5% in the previous five.

The growth in employee-owner numbers implies an average of perhaps 50-70 employees per new EO firm, plausible on paper but ignoring the skew toward small professional-services and construction firms where headcount is often low. The targets require either dramatically larger businesses joining the sector (which means fewer SME transitions as these tend to have fewer employees) or a sudden acceleration that has no historical precedent.

The strategy implicitly assumes a benign or improving policy environment ("we will need policy change and government support") but does not scenario plan for adverse tax changes, despite Treasury already signalling concern over the cost of EOT CGT relief and bias toward larger firms.

When the EOT regime launched in 2014, HM Treasury forecast it would cost under £100m by 2018–19. Yet by 2021–22 the CGT relief alone had reached £600m, with nearly half going to only the largest 10% of disposals. It was on track to exceed £2bn by 2028–29.

The plan puts significant weight on influencing government but appears to have misread policy risk, as evidenced by being "blindsided" on CGT relief. The CGT change background makes clear that Treasury's concern is cost escalation and perceived value for money of the relief, and that EO is not yet seen as delivering macro-level impacts significant enough to justify the previous level of subsidy.

This points to a fundamental strategic challenge: the eoa set a target in 2013 of "growing UK employee ownership to 10% of UK GDP by 2020." We're now in 2026, and nowhere near that goal. EOBs still "represent just 0.1% of the total number of firms in the UK." Without demonstrating impact at a scale Treasury finds compelling, the sector remains vulnerable to further policy shifts.

Operationally, the strategy underplays risk, dependencies, and measurable delivery plans, which weakens its usefulness as a management tool for the sector.

The strategy mentions specific target sectors (Built Environment, Retail, Health & Social Care, Professional Services, North-West region) but provides:

Key downside risks, including policy volatility, economic downturn hitting SMEs' ability to transact, adviser inertia, and owner decision psychology, are either underestimated or not surfaced.

In retrospect, the CGT decision illustrates that fiscal and policy risk should have been a first-order assumption, not an afterthought. Several advisers had raised this risk mid-year before the budget as the costs of the relief for government continued to increase.

The CGT changes may actually benefit the long-term health of the sector, even as they constrain near-term growth, and this paradox the strategy does not yet address.

With reduced tax relief, owners who transition to employee ownership will increasingly do so because they believe in the model's intrinsic benefits - succession security, employee engagement, business resilience, community impact - rather than purely for tax arbitrage. This should produce more committed employee-owned businesses, better-prepared workforces, and stronger demonstration effects that build the sector's credibility.

Analysts agree this will be good for the integrity of the sector. The question is whether the eoa's strategy should embrace this reality rather than swim against it. The sector should embrace slower, higher-quality growth rather than chase unrealistic numbers. A strategy built on slower, higher-quality growth would:

The current strategy appears to prioritise transformational numbers that were only ever plausible under more generous tax conditions that no longer exist and may not return.

If we assume:

A realistic 5-year target might be: 3,500-4,000 EOBs by 2030, with perhaps 400,000-450,000 employee owners. This would represent solid 8-10% annual growth, slower than the 2021-2023 peak but sustainable and building from a more committed base. This is not transformational, but it is respectable, and it would be defensible.

One notable omission: direct employee ownership is absent from the strategy, despite two of the eoa's three principal partners—Gripple and Mott MacDonald—being employee-owned through direct share ownership rather than trusts. Only John Lewis operates under the trust model.

The UK has at least four approved government share ownership schemes: Share Incentive Plans (SIPs), Save As You Earn (SAYE), Company Share Option Plans (CSOPs), and Enterprise Management Incentives (EMIs). Unapproved schemes are also options. These approved schemes offer significant tax advantages, and there are indications that owners are beginning to find attraction in hybrid models—EOT structures combined with schemes like EMI to create layered ownership.

If the goal is genuinely to expand employee ownership, in all its forms, rather than specifically EOT adoption, ignoring these mechanisms seems shortsighted. Direct ownership can complement trust-based models, deepen employee engagement, and offer flexibility for different business contexts. Its absence suggests we may be conflating one mechanism (EOTs) with the broader movement, potentially limiting the sector's adaptability and appeal.

In short, the growth strategy is a commendable sector-wide advocacy framework with quantified ambition, but insufficient operational rigour to qualify as a robust growth strategy. Realistically, it is only deliverable under significantly more favourable policy conditions than currently exist.

As a communications piece, the growth strategy does a competent job of framing EO as a positive, people-centred alternative that merits attention and support. As a strategy, it is weak on quantified market analysis, explicit policy realism, and robust implementation logic.

The eoa deserves credit for raising ambition and attempting to move the EO conversation from values to scale.

The path forward would acknowledge these constraints honestly, set targets that reflect the new fiscal reality, and articulate a strategy focused on building the sector's credibility and resilience rather than chasing unsustainable and unachievable growth.

As it stands, the strategy is persuasive, optimistic, and well-intentioned, but structurally fragile.

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