July 2019

On the 10th July, we were kindly invited by Co-operatives UK to a round table mutual workshop event with the aim of “Creating the conditions for people to form and develop successful, innovative coops and mutuals” hosted by HM Treasury to help feed into British Business Bank policy.

We gathered on a hot day in Westminster at 100 Parliament Street, which also houses HM Revenue and Customs, the Department for Media and Sport and the Department for Exiting the European Union.

With Ed Mayo and James Wright from Co-operatives UK facilitating the event, there were also representatives from HM Treasury, HMRC, the FCA, the PRA, the Building Societies Association, Nationwide and Royal London Insurers. A broad mutual church if you will.

We were invited to contribute to the first two sessions, ‘Can we make it as easy and natural to form a co-operative or mutual as it is a company?’ and ‘Are there tangible ways to improve access to growth capital for co-ops and mutuals?’

It was apparent that there is a lack of awareness, understanding of and good advice for co-ops amongst mainstream business advisors. Co-operative and Community Finance believe there should be properly resourced co-op development bodies that give start-up business advice. A whole network of independent co-op advisors has been lost in the last 30 years, so it is vital to re-establish government and local authority support for financing co-op development.

In terms of mutual incorporation, there have been huge leaps forward brought about by close liaison between Cooperatives UK and the FCA Mutuals section. This has resulted in a new online portal, a far more accessible and free public register and reduced annual fees for societies. The FCA are to be congratulated for this progress.

The discussion turned to how start-up capital can be a barrier to the formation of co-ops. The survival rates for new co-ops according to Cooperatives UK are 80% compared to 44% in non-co-op businesses. As such, exploring start-up loans for the sector that are tailored to co-op formation that come with specialist co-op advice and support was an exciting concept that had support around the table.

It was recognised that community shares have been incredibly successful in crowdfunding start-up capital for community benefit societies, but this is often not possible or the most appropriate route for small new start worker coops. Evidence of what works from the UK and around the world suggests that co-ops can thrive when they also raise equity and debt investment from external sources. Patient capital could be the driver here.

Given the various forms of co-op legal structure, community benefit societies, worker co-ops, employee-owned businesses and mutuals, financially growing and nurturing all of these will take different approaches.

A good start would be to properly resource the co-operative development advisor network and reverse the decline seen in recent decades of high quality and professional co-op business advice.

Couple this with a capital fund for new start co-ops that could sit alongside a patient capital fund that would support both community share vehicles and employee ownership and we have CCF’s coop support wishlist for the British Business Bank!

John Glen, Economic Secretary to the Treasury did make himself available at the end of the session to reiterate his genuine desire to make the most of his brief for co-ops and mutuals. Watch this space!

Here at Co-operative and Community Finance, we’ve worked with the Plunkett Foundation for many years – in 2006 we were partners in a project which was then called Village Core.  This was a programme where business support was provided by Plunkett, the local community raised finance, we provided a loan and with financial support from the Esmée Fairbairn Foundation, they received a matching grant. 

It was extremely successful, we helped well over 100 rural, community owned shops to start up and develop and what is particularly pleasing is that they are all continuing to trade today.  We are now partners in More Than a Pub, a similar programme of business support, community finance, a loan and a grant to help community owned pubs.

With such a close relationship, it was a pleasure to attend their AGM in Bristol recently to celebrate their 100 year anniversary and pleasing to hear how well they are doing with More than a pub, as well as several other exciting projects on the go, including:

• Making Local Woods Work – supporting the growth of the community woodland sector
• The Inspire Programme – promoting the benefits of the co-operative/community owned business approach
• A UK wide Advice Line – a free service giving guidance on setting up or running a community business

Their achievements in 2018 are impressive, supporting the opening 50 new community businesses and assisting well over 500 new communities who contacted them for support.  There are now about 600 community owned businesses in the UK, including the community owned shop in Ambridge! (for Radio 4 Archers fans)

It was also really interesting to hear from Kate Targett who has spent the last few years transcribing, annotating and indexing 51 volumes of Horace Plunkett’s diaries.  A mammoth effort, given his appalling handwriting, but she was able to give a fascinating insight into Horace’s life and the sort of person he was.

Here’s to the next 100 years of the Plunkett Foundation – we are pleased to be on the journey with you.

Congress attendees had a rude awakening on Saturday morning with a false fire alarm before its start; not ideal for delicate heads following a night of high excitement generated by the 2019 Co-op of the Year Awards!

More than 30,000 votes had been cast in the public vote prior to the event, which seems huge and Congress applauded the very worthy winners of The Co-operative Group, Bristol Wood Recycling, The School’s Energy Co-operative and South Tyneside Council with Lorraine Power from Leeds Bread Co-op crowned Co-operator of the Year.

We were delighted to hear that Roger Sawtell was announced as the winner of the Lifetime Achievement Award. Over the years, Roger was instrumental in founding many co-ops including ICOM which merged into Co-operatives UK and ICOF, which is us, now trading as Co-operative and Community Finance. We are honoured to be associated with Roger.

Despite the false start, Saturday kicked off on time with a welcome from Ed Mayo and a session on ‘Leading the way for a fairer economy’. This included an interesting presentation by author Oliver Bullough who said there’s “no co-ops in Moneyland”; in reference to his book ‘Moneyland: Why Thieves and Crooks Now Rule the World and How to Take It Back’. This book uncovers corruption, money laundering and a broken system, that co-ops have the opportunity to reverse.

Claire McCarthy, General Secretary of The Co-operative Party went on to say that the co-op sector still feels like “the best kept secret in Britain” and that there is a real a need to “talk up” the positive impact co-ops make and the need to be more ambitious and optimistic in growing the sector. Paul Gerrard of the Co-op group highlighted that more could be done through public procurement processes to support more Co-ops in delivering local authority contracts.

After the morning break, Congress split off to wide ranging sessions covering Impact, Platform Co-ops, Co-operation among Co-operatives, and advice surgeries on Leadership, Governance, and Policy delivered by Co-operatives UK staff.  The ‘Communities in Charge’ session in the main hall included, on the panel, James Alcock, one of our Trustees, who alongside Tony Armstrong presented their joint campaign between  Co-operatives UK, Locality and the Plunkett Foundation. These, collectively, had presented to government their ‘Communities in Charge‘ paper setting out how they feel the promised post Brexit ‘Shared Prosperity Funding’ should be distributed; to ensure communities have the chance to take control of funding and economic development locally and put communities first. Tony Armstrong CEO of Locality said “The Shared Prosperity Fund can be transformational if allocated to the right places and in the right way”.

In the ‘The future of responsible finance’ breakout session, Fintech, Credit Unions and Regional Community Savings banks were discussed. Maarten Rooney from Singlify talked about the importance of using a combination of both High tech and High touch to build local connections. Large corporations typically rely on only High Tech solutions to drive business and growth but co-ops, with the Unique Selling Point of their intrinsic networks and members, have a true commercial differentiator – their strong ‘high touch’ connections, which when used alongside high tech, can generate very positive results.

This need for localness was echoed by James Moore of Community Savings Bank Association, who promote the establishment of new regional mutually owned Banks. They hope to see the first Community Bank open its doors on a High Street in the South West within the next two years, having nearly completed their 600 page banking license application and raising £600k of investment.

After lunch, James Wright of Cooperatives UK  and Keely Lead  of the Employee Ownership Association talked about how they are working together to drive worker ownership & control start-ups and have an ambition for 1 million new worker/employee owners in UK regions with a Project launch coming soon. There was a call-out for the government to do more and back a more inclusive economy and panelist Polly Robbins from Outlandish said other co-ops including the Co-operative Group needed to procure more services from other Co-ops and help more to raise the awareness of the sector.

The final headline session saw Stir to Actions‘ Jonny Gordon-Farleigh, Laura Noon from Central England Co-op Society and Vivian Woodell, a director of the Co-op Loan Fund, representing Student Homes, discuss the importance of educating the next generation of co-operators.  They said Co-op education needs to make a strategic intervention into areas that affect young people such as the Gig Economy and both finance and support was needed for creating new Platform Co-ops and to drive forward plans for new Co-operative Student Accommodation.

Overall Congress 2019 was a positive couple of days in Manchester in spite of the ongoing political uncertainties and broken economy, Co-operation and Principle 6 is still strong amongst the core.  There are still challenges, however, as identified in the closing plenary with ‘How to Raise Awareness of Co-ops’ (among the rest of the population) high up on the list of issues; again!

Other issues raised included, how to be agile, how to create a critical mass of co-ops, how to resource Co-op development and how to create space and emerging markets for new Co-operators. But there is hope and there is some great work coming from Co-ops UK and others, including new initiatives like the ‘Communities in Charge’ campaign, a future collaboration project between Co-operatives UK and the Employee Ownership Association, and moves for Co-op Education to launch a University.

It’s these strategic projects, alongside existing priority addressing programmes such as UnFound supporting platform co-ops, and the Booster project supporting community share issues, that all help to galvanise and strengthen the co-operation of Workers. Members. Rebels. Citizens. Residents. Owners and Sharers as told in the new Co-ops UK film launching #CoopFortnight 2019.