Is Seetec Way the Future?

There was a significant announcement yesterday from Seetec:-

Seetec to become one of the UK’s largest employee-owned public services companies.

Seetec, a leading provider of skills, employment, justice and rehabilitation services, today becomes one of the largest employee-owned companies delivering public services in the UK and Ireland. The company has annual revenues of £150 million and will be the 9th largest employee-owned company in the UK by number of employees. A new employee council will be set up to manage and represent the interests of employees, which include frontline probation workers, employment coaches and trainers.

Seetec’s founder and 80 per cent shareholder, Peter Cooper, has sold 51 per cent of the company into an Employee Ownership Trust for the sole benefit of the company’s 2,500 employees. This complements and is in addition to, an existing employee benefit trust (EBT) established in 1990 which owns 18 per cent of the company, as well as a 1.5 per cent stake held by the company’s charity, Your Ambition.

Seetec supervises and supports nearly 30,000 low and medium risk offenders across the south of England and Wales for the UK Ministry of Justice. Through the Department for Work and Pensions’ Work and Health Programme, the company also provides intensive support to people who may be disadvantaged and struggling to get into work. In the Republic of Ireland, Seetec delivers the JobPath employment programme and has helped 30,000 people into work for the Department of Employment Affairs and Social Protection.

The company also provides apprenticeships and training on behalf of thousands of employers including market leaders in aviation, media and logistics as well as small and medium sized enterprises across Great Britain and Northern Ireland.

Peter Cooper retains a 29 per cent stake in the business and will step down from his role as executive chairman. He will continue to chair the main board as a non-executive director. John Baumback, the current managing director, will take over executive leadership of the company as group managing director from 1 April 2020.

Seetec Chairman, Peter Cooper, said:

“Seetec was founded to help people to take ownership and responsibility over their lives and so it is a logical step for Seetec’s employees to take on ownership of the business.

“Our founding ethos was to empower people and deliver social value, attributes that are hardwired into our culture. When 30 unemployed young people first came to a former primary school in Essex more than 35 years ago to learn computer programming skills from Seetec trainers, our simple aim was to help them to change their lives for the better by giving them the tools to shape their future.

“As I approach 36 years at the helm of the business, I have increasingly wrestled with how best to protect these values, ethos and roots in communities across the UK and Ireland. I have never been satisfied that a sale to outside investors would protect our record as a force for good, fearing that we would be subsumed into a corporate culture which is not sufficiently focused on doing the right thing for the people who use our services.

“It is Seetec’s employees who know the people they support best and understand instinctively what it takes to deliver life-changing services. The evidence also shows that employee owners can be more productive, engaged and innovative. Under this structure it is my hope that we can continue our legacy of growth as a private company and represent an alternative way, which creates profit for social value and rewards each other, comfortable in the knowledge that it is possible to do well by doing good.”

Seetec Group Managing Director, John Baumback, said:

“Employee ownership means that Seetec’s future is now in the hands of our people, certain in the knowledge that we cannot be sold to the highest bidder.

“As shareholders in our collective success, with new accountabilities and responsibilities, we have an opportunity to create value not just as employee-owners but for the communities and clients we serve. There is now an exciting future ahead as we establish a new dedicated employee council to manage and represent employees’ interests and shape the next chapter of the company’s future.”

President of the Employee Ownership Association (EOA), Sir Charlie Mayfield, said:

“I welcome Seetec’s move to employee ownership. Employee owned businesses are united by an ethos that puts people first, involving the workforce in key decision-making and realising the potential and commitment of their employees. They create profit with purpose, put people at the heart of the organisation and are characterised by high productivity, greater levels of innovation and higher resilience to economic turbulence. I wish Seetec every success as they join a growing number of employee owned organisations who collectively deliver better business for the UK economy."

Chief Executive of the Employee Ownership Association (EOA), Deb Oxley, said:

“We are delighted to congratulate Seetec on becoming employee owned and excited to welcome them as trustee members of the EOA. Seetec’s focus on people, purpose and its impacts on the communities it serves, positions it well to gain the most from employee ownership including securing its independence, empowering its employees to deliver impact and sustaining the business for the longer term.”

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This from the FT yesterday:-
UK government services group Seetec becomes employee owned

Seetec, a provider of probation and state training services, has become one of the UK’s largest employee-owned companies, a transition that its founder said would allow it to pursue an “alternative way” of creating “profit for social value”. Company founder Peter Cooper announced on Friday that he had sold a 51 per cent share of the company to an employee ownership trust, which will run for the sole benefit of Seetec’s 2,500 workers. It makes the company — which runs education, training and work programmes for the Ministry of Justice and Department for Work and Pensions among others, and which had a turnover of £150m last year — the ninth largest employee-owned company in the UK. 

The move follows increased scrutiny of private provision of public services after a string of scandals including a chaotic part-privatisation of probation services revealed government money had been spent on inadequate projects. Seetec took over the running of probation services in south-west England and Wales when Working Links, another private provider, collapsed in February last year after inspectors found major failings in its work. All probation services are now in the process of being renationalised. 

Napo, the probation officers’ union, said Seetec had “chosen a progressive future” and showed “a real investment” in staff with the switch. “Whilst Napo still believe in a public probation service, our relationship with Seetec has developed over recent months and is now very positive,” it added. “We hope that other providers will follow suit as it now raises the bar for future contracts.” 

Mr Cooper, who made the sale as he steps away from the day-to-day running of the business, said it was a “logical step” and would prevent Seetec being “subsumed into a corporate culture” with a sale to outside investors. “Under this structure it is my hope that we can continue our legacy of growth as a private company and represent an alternative way, which creates profit for social value and rewards each other,” Mr Cooper said. 

Carys Roberts, chief economist at the Institute for Public Policy Research, a left-leaning think-thank, said employee ownership was “broadly a good thing” but “not a panacea” and would depend on the level of workers’ representation for its success. According to the White Rose Centre for Employee Ownership, there are 370 employee-owned businesses in the UK, and the sector grew 18.5 per cent in 2018, with companies including Riverford Organic and studio Aardman Animations recently adopting the structure.

Deb Oxley, chief executive of the Employee Ownership Association, said employee ownership allowed businesses to plan for the long term and have greater independence, which would be particularly beneficial in public service contracts. “Seetec’s focus on people, purpose and its impacts on the communities it serves, positions it well to gain the most from employee ownership, including securing its independence,” she said. 

As well as the 51 per cent of shares sold to an employee ownership trust, 18 per cent of Seetec will remain in an employee benefit trust for founding staff, and 1.5 per cent will be retained by the company’s charity. Mr Cooper will retain a stake of 29 per cent. Workers will be represented on an employee council and on the board of trustees.