Use co-op ideas to restart local economies after Covid-19, says CCIN

With councils facing severe financial challenges, the Co-operatives Unleashed report looks at community-led ways to mobilise resources

As local authorities across the UK look for ways to reconstruct when the Covid-19 crisis ends, the Co-operative Councils Innovation Network has released a report highlighting co-op and community-led solutions.

With councils facing reduced incomes and increased demand, their budgets will be under pressure as they try to dodge the impact of a post-Covid recession. The CCIN says co-operative ideas will enable them to mobilise local talent, energy and resources and ‘put wealth directly into communities’.

Launching the report, Co-operatives Unleashed From the Grassroots, which makes a series of policy recommendations to enable this process, CCIN chair Sharon Taylor said the Covid-19 crisis has shown how communities can work together. 

But she warned there are serious challenges ahead, with the fallout from the Covid-19 crisis, a possible no-deal Brexit, the internal funding crisis in local government, the “looming spectre of a local government reorganisation”, and the continued need to tackle climate change and inequality. 

In response, the report calls on government, enterprise agencies and LEPs to require business support providers to have the knowledge and partnerships to promote co-operative solutions.

The report also urges the government to try new ideas to encourage investment in deprived neigbourhoods – for instance by applying state aid exemptions to areas hit by market failure.

“There are barriers to councils investing in or subsidising businesses in their most deprived communities.,” says the report. “This can affect community asset transfers, grants for innovation such as social prescribing and subsidy of regeneration in deprived areas. There is no universal exemption that recognises the value of investing public money to create democratic, community owned and controlled businesses, even in deprived areas.”

Council leaders and senior managers should internally promote co-operative business solutions and insist that this option is understood, named in strategies, and supported with investment, partnerships and training.

And the report says influencers, investors and funders should “create an open, dynamic conversation with councils about opportunities for co-operative solutions in community economic development”.

Co-ops and community-owned businesses face several barriers to attracting investment and the report says councils should balance this out by ensuring they have “a knowledge of the range of investments available in the market so that they complement existing provision and don’t duplicate or skew the finance market. Councils have a reputation for being prudent in their investments and their support can therefore give confidence to other investors.“

The report cites initiatives such as the community wealth building model pioneered int the UK by Preston Council and moves in several regions to set up community banks.

Recommendations for local authorities include:

  • explore the development of a exemptions to state aid rules
  • recognise the concept of a co-operatively run business
  • publish a corporate commitment to support growth of the co-operative sector
  • state a preference for companies initiated by the council to be co-operatives – and involve councils in co-operatives through governance, staff and assets
  • develop skills for cross sector working – between public, private and third sectors
  • implement a co-operative awareness training programme
  • implement a co-operative ambassador programme
  • ensure that quality business advice is available locally from generic and specialist advisors.

Speaking at the launch, Labour / Co-op MP Steve Reed, honorary president of the CCIN and a member of Labour’s frontbench team, said the government had ‘broken its promise to fully fund councils for getting communities through this crisis,” leaving a £6bn funding gap. But he said the report shows how councils can build a bigger co-operative economy and engage residents when designing services and “untap the innovation and creativity that lies latent in our communities”.

The report was funded through the CCIN’s Policy Lab programme and delivered by the Economic Development Team at Plymouth City Council, with case studies and support from across the network and sector.

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