Co-ops mean business and the government must take this seriously. This is the defiant message from Co-operatives UK.
Responsibility for co-operatives is split across various ministerial departments, and the sector body is asking members if it should take action.
One of the pitfalls of being a co-op is “burdensome account reporting”, while many business schemes and targets exclude co-operatives. Co-ops are also marginalised in employee-ownership policy, according to Co-operatives UK.
Co-ops UK says giving co-ops a better service within government is not a priority for the Treasury, but if co-ops can show how they are impacted and gain ministerial support, then this change is more likely. So speak up!
To reverse this sunken playing field for co-ops, the sector body says the Department for Business Innovation and Skills should take responsibility for all co-operatives.
With one department in control of all businesses, co-ops will be under one roof with other firms and are likely to not be missed out on any future initiatives.
A co-op disadvantage has always existed. Journalist Andrew Bibby looked at this issue for Co-operative News last August when he asked the question; “why would anyone choose to register a co-op when other legal forms are much cheaper?”
That article looked at the cost to setup and maintain a co-op. For example a society with a turnover in excess of £90,000 has to obtain an accountants’ report – something that is not required for ‘normal’ companies.
It costs £15 to register at Companies House, but for a co-op this can range from £40-£950 depending on how many changes are made to a set of model rules.
Data on co-ops is harder to access. It costs £12 to download a PDF of annual returns when compared to free Companies House, which is available in a number of computer formats.
The costs can be so prohibitive that a worker co-operative consultant, Cath Muller, who co-edits Radical Routes’ ‘How To Set Up a Workers Co-op’, advises those with insufficient funds to set up a co-op through Companies House.
There is a running theme of regulation throughout in recent stories we’ve published. There is the worker co-op that had to change its co-op structure to take better advantage of tax regulations.
And the Future Co-operatives conference asked if better regulation is actually a good thing. There one of its speakers argued that cutting red tape can lead to impacts in other areas.
But as co-operators agreed at that conference, the movement is political at heart, and if co-ops feel they are being marginalised and there is a positive solution, then the sector should use all of its political might to level that playing field.