Secondary co-ops: The key to building new co-op hotspots?

'If you have a strong community of co-ops it creates a culture. There’s a sense of solidarity that you’re not on your own, that you’re part of something'

This year the UK is plotting an uncertain course as it looks to recover from the economic crisis brought on by Covid-19 and begins life outside the European Union.

What shape economic development takes is uncertain. Calls to ‘build back better’ and even the Brexit mantra of ‘take back control’ suggest that a return to business as usual is not what people want – and that ideas for a more responsive, democratically run and locally accountable economy would have more traction. 

The co-op model is a good fit for this. Some hope that the growth in mutual aid and community business ventures during Covid-19 have increased a popular appetite for co-op models – although, as community business support body Locality warned last month, many of these ventures are themselves feeling the financial pressures of the crisis.

And there are regional variations too: the UK has co-op hotspots – whether in small towns with a thriving alternative economy eco-system like Hebden Bridge in West Yorkshire – or in cities or regions such as the West Midlands
and Bristol.

Other areas are ‘co-op deserts’ – which prompted co-op development organisation Co-op Futures to devote its 2019 conference to finding ways to solve the problem. 

Vivian Woodell, head of the Phone Coop Foundation for Co-op Innovation, was among those who took part in the event. In terms of the difference between co-op hotspots and co-op deserts, he thinks the key is to achieve critical mass in terms of local knowledge and support. 

“Having some co-ops already operating in an area creates a model that people can replicate or emulate,” he says. “I think also there’s a sense that if you have a strong community of co-ops it creates a culture. There’s a sense of solidarity that you’re not on your own, that you’re part of something.”

Having a lot of co-ops on your doorstep can mean there is available mentoring and guidance, and a potential pool of experienced co-operators to help with fundraising or to bring governance experience to a fledgeling board. 

Where those co-op areas exist is often the result of past policy, says Mr Woodell. “It depends which parts of country have had good co-op development over years – some local authorities were very active in funding and supporting new co-ops back in the 1980s. 

Related: Where next for co-op development organisations?

“Or where you have had proactive co-operative societies it can leave a legacy; such as the West Midlands where the former Oxford, Swindon and Gloucester Society, and now Midcounties, have supported Co-op Futures. 

“If someone sets the ball rolling, that will encourage things to happen.”

Attitudes from central government also help: Mr Woodell pointed to the examples of the Scottish, Northern Ireland and Welsh governments where there has been more support for co-operative development. 

But he also thinks a lack of secondary co-ops is holding development back in England.

Phone Co-op founder and chief executive Vivian Woodell at the head office in Chipping Norton
Vivian Woodell

“The issue of secondary co-operatives is not so much about regions – although it can be. It is also about sector.

“Some types of business are capital intensive. Secondary co-ops in these sectors can do much of the heavy lifting leaving small co-ops able to do more with less resources. 

“We’ve seen it around the world – a secondary co-op like IFFCO concentrates on producing and supplying fertilisers which means a lot of smaller agricultural co-ops find it easier to develop; there is a similar situation with the co-op banking set-up in Germany.

Related: Why data matters in co-op development

“We have that model in the UK in the retail sector, and in the credit union sector, but it’s not as good in other sectors.

“But when you look to other parts of the world – when you look at what’s been achieved in housing in the USA through secondary models, for example – we know it works.”

To try to fill the gap in the UK, Mr Woodell has been involved in Student Co-op Homes, a secondary co-op set up to drive a new generation of housing co-ops.

This not only helps drive awareness of the co-op model by placing new co-ops within neighbourhoods; it is also incubating co-op ideas in young people.

“Some of the people in the first housing co-op have gone on to form other co-ops,” he says. “It has shaped their life choices.”

Members of that first student housing co-op, in Birmingham, include Sean Farmelo, who has gone on to be vice-chair of Co-operatives West Midlands and is involved in the Birmingham Bike Foundry, a worker co-op which recently launched a new venture to revive bicycle manufacture  in the city. 

And he’s not the only success, says Mr Woodell. “When you go into a cafe or restaurant that’s co-operatively run and find out that someone is working there because they had lived in a housing co-operative as a student, you know the model has made a difference.”

But while Mr Woodell thinks secondary co-ops should be a vital part of the UK movement’s plans, “it’s important to see that as part of an industrial strategy that can be used to support development of a co-op sector. 

“If you can create an initiative that enables a lot of enterprises, by creating a strong central body, that’s actually a very cost-effective intervention.”

A key problem remains the lack of a national co-op development body in England to rank alongside those in Scotland and Wales. 

But there are other gaps in the development strategies too, thinks Mr Woodell.

“Where there have been co-op development agencies, they often worked with small new co-ops, but there are other areas of opportunity that need attention.”

“The first is around existing co-ops that are trying to grow. They certainly need help to get to the next level but our infrastructure is not set up for that.”

The second – an issue which has been increasingly highlighted in the UK and other countries in recent years – is the ‘silver tsunami of business owners nearing retirement. Transition to employee-ownership is an alternative to closure or sale to a bigger corporation. “That needs the right intervention in the right way,” says Mr Woodell.

The individualistic nature of the UK society and economy in the post-Thatcher years might pose a barrier to notions of collective ownership but Mr Woodell does not think there are cultural barriers. “There’s nothing individualistic about working for a firm that shuts down,” he argues. “The issues are ones of awareness and knowledge.”

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