Committee asks Scottish government to support co-op development

The Scottish government has been urged to step up support for co-operative development across the country, in areas ranging from housing to employee ownership. The Economy, Energy and...

The Scottish government has been urged to step up support for co-operative development across the country, in areas ranging from housing to employee ownership.

The Economy, Energy and Tourism Committee met on 3 February and called on Deputy First Minister John Swinney to clarify a number of aspects relating to the government’s support for the co-op movement.

Former Scottish Labour leader Johann Lamont said co-ops could help solve many problems affecting communities across Scotland.

“It would annoy me if co-operatives were regarded as a place of last resort when nothing else has worked,” she said. “Co-ops can be important in rural areas and in urban areas where there has been a lack of regeneration to create opportunities for people.”

Johann Lamont speaking at the Co-operative Party conference in London
Johann Lamont speaking at the Co-operative Party conference in London 2014

Ms Lamont, Labour/Co-op MSP for Glasgow Pollok, also asked the SNP-led government to drive the development of new housing co-operatives in the rental sector.

She said: “It is not just about housing co-operatives taking over local council housing; housing co-operatives could address the challenges that are faced by young people who rent before they are ready to own a home. I do not know where such an initiative would come from now.”

The meeting also heard from Sarah Deas of Co-operative Development Scotland (Scottish Enterprise) who looked at the different models of employee ownership and co-operatives. Co-operative practitioners and academics also gave evidence.

“Given the market failure to raise awareness of co-operative models in all their forms, the committee might wish to consider how they are introduced in the education system,” said Ms Deas.

“A small organisation called the Co-operative Education Trust Scotland has been working alongside schools to increase awareness and understanding of co-operative models. The committee might also wish to consider how the variety of models are presented to students as they transition into further or higher education and business schools.”

Kelly McIntyre of Community Shares Scotland added: “On housing, we need to think about all the ways we can use the co-operative model to provide desperately important services. I know that we look at doing that through community co-operatives and community enterprises but there is also the community ownership support service, which helps groups to make those transitions.

“It could look into how groups could transfer from a local authority but it could also help a group to do it on their own spontaneously. That might be worth considering. The service is funded by the Scottish Government.”

The Scottish Parliament report
The Scottish Parliament report

The meeting followed on from the committee’s report on work, wages and wellbeing in the Scottish labour market, which suggested that enterprise models, which had a higher level of employee participation in the business, were good for productivity and the broader success of the business.

The Commission’s letter points towards discrepancy of co-operative development service support across the country. It is also asking the government to what extent it monitors support services to ensure consistent levels of support are available across Scotland.

The Commission also expressed concerns that services might be lost when funding for bodies performing a supporting role is not renewed, such as the one of Community Shares Scotland.

The letter asks the Scottish Government what steps it has taken to encourage small and medium enterprises, including social enterprises, co-operatives or other employee-owned businesses, to bid for public sector contracts.

On 2 March Deputy First Minister John Swinney MSP replied to the letter sent by the Committee.

Mr Swinney writes that Business Gateway, Co-operative Development Scotland and the government’s Enterprise Agencies provide information on alternative business models, including co-operatives.

The Scottish Government currently has two mechanisms that provide funding as grants and loans to social enterprises. The Social Entrepreneurs Fund offers support to individuals with ideas to start up social enterprises in Scotland. Since 2009 it has has given 340 awards to more than 280 individuals.

Another funding mechanism is Social Investment Scotland – a charity and social enterprise that provides loans to other charities, social enterprises and community groups.

“You shared concerns that support services subject to rolling funding made planning for the future a concern and that services may be lost. The Scottish Government is aware of these concerns, which arise due to the nature of funding for support services, where grants are awarded on a rolling basis or where contracts are extended or re-let.

“As part of the ongoing evaluation of such contracts and funding, early consideration is given to how successful the service provision has been, whether it is appropriate for the contract or funding to be renewed, any risks which might arise as a result of not renewing a service and what, as part of succession planning, might be needed to be in place to replace a body or service which comes to an end,” he wrote.

Responding to questions about co-operatives and public procurement, the Deputy First Minister said the government was working with SMEs and third sector to improve access to public contracts. He added that of the circa £11bn annual public sector procurement spend in 2013/14, 46.8% went to SMEs.

The full letter is available here.

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