After Labour’s defeat, does the co-op council model show a route to renewal?

'Giving power back to localities would make all the difference ... We need people to have a say and feel their say matters'

December’s landslide victory for Boris Johnson’s Conservatives has left the Labour Party stunned; it is now debating its future direction and preparing for a leadership contest.

The party, which suffered its worst defeat since 1935, has deep divisions, with a voter base split – to put it broadly – between the remainers of the cities and the leavers of the towns. Within the party, there are divisions between the centrists and the left, which took control under the leadership of Jeremy Corbyn. It may well be facing another decade out of power.

The co-op movement is a broad church; among its members are supporters of all the main parties, and it has worked fruitfully with the Conservative government on a number of initiatives, from funding for the More Than a Pub programme to regulatory changes which last year saw improvements to the mutuals register; and Conservative MPs such as Steve Baker have voiced their support for co-ops.

But the movement retains strong links with Labour, notably through Labour’s sister organisation, the Co-operative Party – raising the question of whether co-operative ideas offer the party a way to develop new policies and rebuild its support base.

One possibility comes in the shape of a number of Labour and Labour/Co-op councils developing models of community wealth building – which uses regional anchor institutions to revive local economies by targeting procurement spend through local co-ops and SMEs. They are also pioneering new ways to consult residents at grassroots level; could this bring a revival of local democracy which feeds into national politics?

The co-op council model has been designed to have cross-party appeal and its umbrella body, the Co-operative Councils Innovation Network, is open to all parties. 

However, it is Labour councils which have been doing the running, initially in response to austerity measures. In  Plymouth, Labour/Co-op Cllr Chris Penberthy sits as cabinet member for housing and co-operative development. He is looking for ways to reconnect voters after decades of centralised power in Westminster. 

Cllr Chris Penberthy

“We’re probably one of the most centralised countries in the world and since 2010 the Conservatives have stripped local government of funding – yet it’s at local levels where most government activity happens,” he says.

As an example, he cites the loss of local control over education, which means councils can no longer instruct schools to deliver the sort of adult education that can equip people to take advantage when new, skilled employment opportunities are brought into their towns.

Co-op solutions to problems like this could revitalise the Labour Party’s offer, Cllr Penberthy argues. “Espousing something not centralising, but giving power back to localities, would make all the difference, and could cover every policy area … We need people to have a say and feel their say matters.

Related: A new decade: Can co-operation overcome division?

“Labour needs to find ways to engage with people differently. At local level it needs to listen much more to the Co-op Party – I go to Labour Party meetings and Co-op Party ones; the Co-op Party ones are more energetic and come out with more radical policy.” 

He says the Labour Party’s strength is in its co-op roots. “Drawing on this would resonate with people. They don’t trust politicians, but they don’t trust business either; and what better way to rebuild trust than for people to be a stakeholder in the businesses they use and work for? That can offer a real connection.”

The UK is the home of co-operation, adds Cllr Penberthy, but “you have to go to other places to see how it works… I don’t want to have to go to northern Italy or Mondragon to see how co-operation has infiltrated every party of a country’s life.  

“It would be a radical approach, one we could work with unions on, and engage members with locally to organise things that lead to real outcomes. It would build a local base of people who would vote to back the things they are involved in.”

He wants the next national Labour leader to support a co-op and community wealth agenda, adding: “Once hustings start I will be posting questions about co-operation and localism. I want a leader who will take us down that route.”  

Another authority, Preston, has won plaudits for its community wealth building initiatives. Council leader Matthew Brown said he was “devastated” by Labour’s election defeat, adding: “With our second referendum policy we appear to have lost many leave voters by not listening to them.”

One way of listening is through community wealth building which, he says, involves local people in strategies which can bring radical change. There is broad support for the model in the Labour Party, he adds. “The left likes it, because it’s about transforming capitalism, but those outside the Labour left also see it as something new, and it has a broad appeal even beyond party dynamics.”

But, like Cllr Penberthy, he warns that centralisation and cutbacks from Westminster put challenges in the way. 

“With creativity maybe it can work,” he says, highlighting moves to set up regional co-operative banks in the North West, South West, Wales and elsewhere to support small businesses and start-ups. “If we can get trade unions and local businesses behind it, and explain how they can help communities and new start-ups, that’s something we could do. We need the trade union and co-op movements to work more together; where businesses get into trouble they could be rescued as union-supported co-ops, if they have a viable future.”

He adds: “Community wealth building is a pluralist measure – it’s not just co-ops although co-ops and worker co-ops are integral; it’s also about public procurement, municipal ownership, credit unions, living wage strategies.”

So can this model engage local communities in a way that translates to a broader movement, in an organic, grassroots manner?

“I think it can,” says Cllr Brown. “There was the community organising group under Ed Milliband’s Agenda for Change, but it was abandoned. There’s a need for attempts to transform communities at local government level, or it won’t be noticeable.”

Preston is already working to bring its efforts to scale, he adds, by tying together initiatives in different sectors such as care or construction, and the aim is to set up between 10 and 15 worker co-ops. Larger authorities have the scope to do more, he adds.

Cllr Matthew Brown

“If you do that, creating as many jobs as possible, people will notice it,” he says, adding that a more people-centred development model also produces visible differences to the look of a town.

“When you get large developers coming in, making promises, and they pull out, you’re left with a hole in your plans. Or you get big retail businesses creating sites and if they later decide to move out, you’re left with a big empty building, and you can’t do anything with it, you’re stuck with it for years.”

Restoring elements of control to local people over planning issues like this “could help win back voters who voted to leave,” he adds, as will a change in language. “There’s lots of managerial language in local government, terms such as ‘inward investment’. It doesn’t appeal to people, we need to say things like ‘we’re on your side,’ that kind of language.”

Can these ideas help Labour and Co-op councils in the CCIN in next year’s local elections, so soon after the general election defeat?

“Eventually people will see through what’s been said about Brexit, and the economy, and will come back to us,” says Cllr Brown. “My concern is for next May, when there might still be popularity for the current government.

“Labour councils have been losing seats in leave areas and we need something that appeals to people and inspires them to vote – we need to transform our economies as much as we can.”

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