What else has happened in 2014?

Co-operative Group The Co-operative Group reported its biggest-ever loss of £2.5bn. “Significant losses” at the Co-op Bank, which include a disposal of £1.44bn and £625m loss on disposal...

Co-operative Group

The Co-operative Group reported its biggest-ever loss of £2.5bn. “Significant losses” at the Co-op Bank, which include a disposal of £1.44bn and £625m loss on disposal of the Bank, are to blame alongside a £226m write-down of the 2009 acquisition of Somerfield.

Trust in co-operatives has been knocked following negative publicity surrounding the Co-operative Group. A Co-operatives UK survey found that 53% of people trusted the co-op model less.

Co-operative Group chief executive Euan Sutherland resigned in March after a stand-off with the organisation’s board following a series of leaks to the media. Chief financial officer Richard Pennycook was appointed as interim chief executive, and later took on the role permanently.

 

Business

Co-operatives UK asked fashion chain Urban Outfitters to make a donation to co-operative development following its use and trademark on the word ‘cooperative’ for clothing items.

Britain’s third largest co-operative formed through the merger of two building-supply co-operatives. United Merchants wound up its business into the smaller National Merchant Buying Society from 1 February to form a £1bn co-op. Another merger saw Central England Co-operative come into existence on 25 January, following the merger of Anglia and Midlands co-operatives. The name was chosen through a vote by members.

Clydebank Co-operative entered a supply agreement with Glasgow-based wholesaler JW Filshill, bringing to an end its 10-year arrangement with the Co-operative Retail Trading Group. It was the first co-op to withdraw from the co-operative movement’s buying group, which previously controlled 100% of Co-op food buying in the UK.

 

Agriculture

Agricultural co-operatives around the world joined the campaign to help small farms feed the world during the 2014 International Year of Family Farming.

 

New technology

Sean Farmelo, founder of the Students for Co-operation network: “One of the things I’ve been most excited about came from the co-operative sector in New Zealand … Loomio is an open-source organising platform created by a workers co-op, specifically designed with co-ops and other democratic organisations in mind. It allows groups to have discussions, attach files and photos, and then to use a form of consensus decision-making to come to a decision about proposals that are created using the platform.

 

Co-operative of the year

“With more than 6,000 co-ops operating healthy and sustainable businesses up and down the UK, choosing the Co-operative of the Year 2014 was no easy task,” says Ed Mayo, secretary general of Co-operatives UK. “Suma’s sales have more than doubled in the last decade. Lifting the bar on innovation and performance, Suma continues to demonstrate that people, planet and profit – the worker co-operative’s triple bottom line – can work in harmony.”

Suma was announced as Co-operatives UK's co-op of 2014
Suma was announced as Co-operatives UK’s co-op of 2014

 

Community

Schools in Plymouth joined forces with the council to ensure hot school lunches for students will continue. Together they formed a school meals co-op, 49% owned by schools and 51% by the council.

Fifty of the UK’s top 50 employee-owned companies have combined sales of £20.5bn and a total of 151,000 employees, it was reported by the Employee Ownership Association.

In the London borough of Lambeth, housing co-ops are breaking up as the council sells its homes to bridge a funding gap.

Co-operative News released the Community Impact Index, which showed the largest consumer co-operatives invested 6.3% of pre-tax profits in helping communities, compared to 3.7% by the main supermarkets.

 

Community energy

Following financial difficulties, the Energy Saving Co-operative ceased trading after a failed bid to raise fresh capital.

A number of renewable energy co-operative applications were blocked by the Financial Conduct Authority on the grounds that members would not participate enough in these co-ops.

 

Paul Monaghan, director of Up the Ethics, and sustainability adviser to Co-operative Energy, on what’s been happening in the community energy sector.

Community energy has had a lot of ups and downs in 2014, and we end the year unsure as to whether government policy will help the sector grow or hinder its emergence as a serious player.

In January, the Department for Energy and Climate Change (DECC) announced the UK’s first Community Energy Strategy, but then in March the small print of George Osborne’s budget declared tax relief was to be taken away from community energy investment (an idea now partly rescinded thanks to hard lobbying). In November, at the government’s behest, the Shared Ownership Taskforce announced a voluntary agreement whereby large, onshore renewables projects would offer communities a Right to Invest via co-operatives – but throughout 2014, the Financial Conduct Authority (FCA) has been blocking the involvement of bona fide co-operatives in energy generation.

Government is rarely joined up, but this crazy push and pull is giving the sector a right old headache.

But there are many rays of hope, too, that deserve recognition. In July, SmartestEnergy reported that the number of community generators (at 50kw and above) increased from 45 to 66 in 2014 – and the total is probably now nearer to one hundred projects, with at least as many again under development.

With support from Co-operative Energy, Community Energy Fortnight went into its second year, with the number of events increasing from 30 to 103. Energy4All established five new co-operatives and raised £10 million in share offers. Abundance has now raised a total of £8.2 million in peer-to-peer lending. And Co-operative Energy launched an innovative new platform for its customers, User Chooser, which allows them to select their supply from among ten community energy projects, at no additional cost.

One big question hanging over the sector is whether the FCA will listen to the many responses to its recent consultation and end its overly restrictive definition of how co-operatives can be constituted. Under their initial proposals, co-ops (particularly bencoms) would potentially face restrictions on the returns they could offer to members – which could have a big impact on the ability of community energy enterprises to raise share capital.

Longer term, May’s general election looms large and could be enormously consequential to the fortunes of community energy.

In many ways, the next six months will determine the future of community energy for years to come.

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