Shared ownership in practice: case studies

Oldham Community Leisure: employee ownership

The Office for Public Management (OPM) is an independent, 100 per cent employee-owned
development centre that works with public services to help to improve social outcomes. As a
result of our work in the area of shared ownership we have been appointed as one of a small
number of expert mentors to the Cabinet Office’s ‘mutual pathfinders’.
After publishing a practical guide to statutory bodies considering transferring one or more of
their services to employee and/or community ownership, which was based on an extensive
review of the literature, OPM conducted in-depth case study research to explore in more
detail the specific questions, issues and decisions that have to be tackled in the move to
shared ownership.
An overview report will draw out the key cross-cutting themes from all of the case studies.
This short report highlights some of the findings from one of these case studies, focusing on
how, in the case of Oldham Community Leisure, shared ownership works in practice, how
and why the transition to shared ownership took place, what the major challenges and key
success factors are, and what impact has been achieved over time.

How does shared ownership work in practice?

Oldham Community Leisure (OCL) is, formally speaking, a community benefit society
incorporated under the Industrial and Provident Societies Act 1965. Since 2002 it has been
responsible for the management, operation and development of fifteen sports and leisure
facilities across Oldham.
OCL is owned by shareholders, of which there are currently 65, with a £20 non-redeemable
preference share securing rights including the ability to approve the board at the AGM and
ratify the appointment of directors, who serve for a maximum of five years. A large number of
shareholders are members of staff, and there are three staff representatives on OCL’s
thirteen-strong board of trustees, which also includes representatives from Oldham Council,
the voluntary, sports, health, community safety and business sectors, and two users of
OCL’s facilities.
All members of staff, whether shareholders or not, get to nominate colleagues to take on the
staff representative positions when these become available. A ranked list of staff nominations
(ranked in order of number of nominations) is then voted on by shareholders, who each
receive three votes. Once appointed staff representatives attend board meetings with full
rights, and can vote on all matters aside from those matters that fall under the remit of the
pay and remuneration sub-committee.

How and why did the transition to shared ownership take place?
The establishment of OCL arose from Oldham Council’s announcement in early 2002 that it
intended to outsource its leisure facilities to private provision. Staff and union concern about
the potential impact of such a move led to an initially ‘behind-the-scenes’ search for a
preferable option, one that would better protect staff conditions and preserve benefits for the
communities in Oldham. A small specialist consultancy was also brought in to provide advice
and support. The central role of trade unions in this transition is noteworthy: not only were

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they key partners throughout (and remain so today) but the idea of moving to a cooperative
model was actually first suggested by one of the unions.
A working group of about 12 managers, union representatives and members of staff
considered the merit of a number of different options, including visiting other leisure trusts
across the country, and decided upon the Industrial and Provident Society model for two
main reasons (in the view of one member of staff involved in the discussions): the fact that
staff representation was an important element of that model, and the fact that any profits
arising from successful running of the leisure facilities would be able to be reinvested into the
local community.
The key factors in persuading staff that this was the right option to go for were the fact that
they could become ‘real owners’ of the new organisation by buying a share; the commitment
from the new trust that staff terms and conditions would be protected; that stability would
remain in other ways for example in terms of management systems and trade union
recognition. OCL was established and was awarded the contract after a competitive process.
The initial contract – for five years, which has been extended on a yearly rolling basis since
then – included a requirement that OCL retain the services of a private sector leisure
management contractor in order to enhance the likelihood of OCL’s success, although at the
time of the first contract renewal this requirement was dropped.

What have been the major challenges and key success factors?
As so often, it is difficult in the case of OCL to confidently disentangle the impact of
significant individuals – in this case OCL’s chief executive in particular – from the wider
structural, management and other factors which have had an impact.
The current chief executive came on board shortly after the transition to the new model – in
June 2003 – and since then has been a key architect of the organisation’s approach
(although OCL’s actual strategy is developed based on a collaborative process involving staff
and partners). As well as a strong emphasis on openness – explored below – from the
beginning a high premium was placed on building links with important partners in Oldham,
ranging from statutory bodies to key players such as the local football club and editor of the
local paper.
All interviewees spoke of the benefit that move away from Council ownership and control had
brought in terms of freedom from bureaucratic and other processes, which has enabled OCL
to be much more responsive and fleet-of-foot: decisions get made much more quickly, which
has given staff and unions – for example – a sense that it’s worth them getting involved in
projects and programmes to change ways of working and services.
This collaborative approach has also been enhanced by the emphasis on widespread staff
engagement: for example the chief executive meets once a month with staff reps from each
of the main facilities, and with unions on a monthly basis too. As a result, several staff
innovations have been picked up and implemented, for example an idea to outsource and
deliver training to other companies and organisations in Oldham, on everything from
customer care to food hygiene.
One of the more challenging aspects of OCL’s journey has been the role of staff trustees.
Both the – current and past – staff reps we spoke to and other board members commented
that the role of staff representative had frequently been challenging both from the point of
view of managers and the staff themselves, who reported finding attending board meetings
daunting and struggling with knowing what they could and couldn’t raise or report back to

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other staff. Induction training is provided, and we heard that confidence in the role improved
over time, and that the chair’s commitment to inclusive board meetings was important.
Interviewees also said that, over time, the board had successfully clarified where its role
could add most value, focusing on overall strategic direction and governance, rather than on
getting involved in the operational management of OCL, which is left to a senior
management team. One of the ways that this transition was achieved was by having the
board visit several of OCL’s facilities and meet the managers and staff who run them; thus
enabling the board to get a sense of the realities of day-to-day management and confidence
that this was being carried out effectively without their close intervention.
The most substantive set of challenges arise from the problems caused by the length and
lack of stability of OCL’s contract, which has had an impact on staff morale and has caused
real difficulty in attracting private funding for larger developments. Another challenge for
OCL has been Oldham Council’s decision to retain a sports and youth development function
– which provides swimming lessons, sports coaching, holiday activities at substantially
subsidised costs, that OCL is unable to match.

What impact has been achieved over time?

OCL has achieved considerable impact in its eight year life to date. Upon transfer, almost 60
per cent of OCL’s budget was subsidy from the Council; this has reduced significantly over
time so that the Council contribution is now only 30 pence in the pound. There were around
160 staff at the time of transition, which has increased to about 240 in 2010.
Substantial improvements have been made to existing facilities and new centres have been
opened, including Saddleworth Pool and Leisure Centre and Chadderton Health and
Wellbeing Centre, and OCL has also developed a wide-ranging outreach programme
including fitness classes for older people and projects designed to improve healthy eating.
The impact in terms of the members of staff who work at OCL is also clear. Sickness levels
have halved, from 6 per cent at the time of transition to 2.6 now, and the emphasis on staff
engagement and openness, as well as leading to the kinds of innovation noted in the
preceding section, would seem to have contributed to there being just one employment
tribunal in eight years.
Less tangibly but just as importantly, all of the managers and staff we spoke to described a
definite cultural shift as a result of the move to shared ownership, with staff reporting real
pride in working for OCL, and being strongly conscious of being owners of the business. One
of the people we spoke to said that whereas in a Council setting it can be difficult for
employees to ‘see the bigger picture’, employees at OCL find it easy to see where their role
fits into the wider organisation.

For further information:

To discuss this case study or to hear more about OPM’s research into shared ownership
models, contact Phil Copestake, OPM’s head of research, on 020 7239 0879 or
pcopestake@opm.co.uk.
For other case studies and research outputs visit OPM’s blog: opmblog.co.uk.

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