The first day of the Co-operative Councils Innovation Network conference, which focused on pandemic recovery, looked at a range of initiatives for rebuilding the country.
In line with the organisation’s local government base, the emphasis of the event – held online last week – was on regional and local solutions to the problems facing the country, including digital exclusion.
Cllr Louise Gittins, leader of Cheshire West and Chester Council, presented findings of a report her authority – along with Sunderland, Rochdale, Kirklees, Cardiff, Newcastle, Greater Manchester Combined Authority and Plymouth – had compiled, Understanding the Digital Divide.
She said Covid-19 “has really shone a light” on the gap between those who can and can’t access digital.
She said her council has developed simple practical toolkit to help other local authorities understand and deal with digital exclusion, while Greater Manchester has compiled a Digital Exclusion Risk Index of households going down to granular ward level; there are other national data sets councils can use.
The research found people can be digitally excluded for different reasons – lack of interest; lack of computer skills; worries about data security; being too poor to afford hardware or broadband; and living in areas of poor connectivity.
The tookit offers examples of how to advertise courses which can help people get online – teaching them how to charge a device, turn it on and connect to the internet. Cheshire West and Chester is providing 120 computers across its 22 libraries, and other local authorities are working with partners to collect and recycle used devices, or offering loans to people who can’t afford equipment.
“Our co-operative values really shone through within this project,” she added. “This really feels like the start of a journey and our officers, and I’m sure the officers on the other councils, are really keen to continue that learning and working together.”
Cllr Shabir Pandor, leader Kirklees Council, presented the report on Co-operative Approaches to Net Zero. He said the climate crisis had to be dealt with in the context of a polarised society with problems around poverty, debt, mental health, education, rising cost of living, class and the rise of extremist parties.
“Co-op councils are set in a very fortunate position where we can make those big differences,” he added. “Either we take a lead and start to innovate or we rely on central government, of all shades, who dictate on things we know at local level.
“Local authorities can take a central role on this if we are to reach net zero.”
Examples include social partnerships to build a consensus for action in communities, developed by Telford and Wrekin; the use in Oxford of citizen’s assemblies to gather bringing people to find ways to work to net zero; and Greater Manchester integrating net zero into its housing strategy.
Cllr Sharon Taylor, leader of Stevenage Council and chair of CCIN, who hosted the event, praised the report for involving academic institutions and said more of this cross-sector collaboration is needed, and is “truly in the co-operative spirit”.
“This is one of those challenges that we all have to take on. It’s an emergency, we all know that, we’ve all got to do it quickly and get our systems for tackling climate change up and running.
“One of the things as co-operators that we need to get across to people is that while you can feel that climate change is such a big issue – it’s like a great big elephant that you’re never going to tackle on your own – one of the things we’re doing in Stevenage is talking to people about the individual actions that they can take. The same applies to councils, we all have to play a part in this.”
There was also a long section on the development of regional community-owned mutual banks, a policy being developed in several regions to foster community wealth and reduce inequality.
Cllr Matthew Brown, leader of Preston Council, said: “Our banking system in UK is different from Europe – it’s dominated by four or five banks … even the US has more diverse system.”
With big UK banks reluctant to lend to SMEs, local economies are being hollowed out, he warned – while Germany, with more democratically owned banking, has more SMEs than the UK.
Nina Schindler, from the European Association of Cooperative Banks, said co-op banks in Europe are enjoying steady member growth, and form a major pillar of a diverse banking system. But it is hard to create new co-op banks – especially in the UK, where the legislative framework effectively blocks their creation.
But there are alternatives, and work is afoot to create several regional community banks, including one in Wales, Banc Cambria. Mark Hooper, who is leading the project, said it had scored important successes in terms of credibilty, such as gaining the support of all parties in the Senned, and securing Monmouthshire Building Society as a partner.
“It’s been really important that Monmouthshire was part of that conversation, it gave a feeling of solidity to the proposal,” he said, but there is also “an overlap of values”.
Dawn Gunter from Monmouthshire BS said the society has been following an ambitious five-year strategy to meet challenges around digitisation, growth, sustainability and community wellbeing. Its commitment to the community bank is part of this ethos.
Purpose and longevity is key to the project, she adds, with a tried and tested model based on mutuality. “We don’t want to launch Banc Cambria just to find in a couple of years time it’s not commercially viable … this design stage we are at is very important and it can’t be rushed.”
Meanwhile in England, councils including Preston are supporting the North West Mutual, which will cover an area from Wirral to the Solway Firth.
James Moore, chair of the Community Save Banking Association, which is working on the project, said the goal was a lasting project: “a useful, trusting, trusted universal bank” for communities in the north west.
This poses challenges, he said: “Communities are different and keep changing and it’s no better than guessing to say you knew what they’ll be like in 10 years time.”
To deal with this, the mutual needs to have the right chair and CEO in place, and must meet all needs – from customers who want cash banking and high street services to users of mobile and digital; that means it must have an adaptable platform.
“We’ve got a modular flexible core technology platform,” he said, “which is a fundamental building block.” A major tech update is being done in March, working with a leading US bank, and a banking product is being developed for businesses in the north west.
Next, the team needs to raise capital to develop a credible bank and brand. When this is ready they will approach the Bank of England for a licence and join the Building Society Association.
Tony Greenham, from South West Mutual, said his project had been developing a banking structure for the region –which unlike Wales has no building societies to collaborate with. With funding from Esmee Fairbairn, and advice from Anthony Collins, PWC, Finance Innovation Lab and Cooperatives UK, it has build a mutual structure with purpose “to promote the common good”, giving workers ownership alongside customers and investors, and specially designed co-operative capital instruments.
“This structure can be viewed online and can be used by anyone who wants to use it,” he said, adding that it is also adaptable for non-banking, capital-hungry co-ops.
Jules Peck, founding director of Avon Mutual, which will serve the west of England, said the bank is three years into its development. This has been a very expensive process, he said, but with support from all parties it has been able to attract hundreds of thousands of pounds in investment from several councils, with Bristol the cornerstone.
Bristol has designed a due diligence framework and procurement package for the mutual – one that can be used by any council in the UK, said Mr Peck.
The business plan for Avon is to be lending over £1.2bn by year 10; delivering a local multiplier economic impact of £700m to £1.6bn in the first 10 years; and creating or protecting 115,000 jobs. It will serve more than 22,000 SMEs, small traders and independents; 4,200 charities and other mission-driven businesses; and up to 70,000 individual companies,10,000 of them financially vulnerable. The plan will also see it bring 2,000 or more unbanked people into the financial system to tackle poverty and exclusion. By year 10, it is hoped £390m of assets will be with positive social and environmental impact business.
Mr Peck said Avon Mutual is hoping soon to move to final stage of the regulatory process before going on to apply for a licence which can take six to nine months. £1.5m has been spent so far; another £2m is needed for the final stage, and £20m will he needed to launch.
“We’ve got good conversations going about that,” he said.
Dr Bridget Meehan of Northern Ireland Mutual said the campaign to get a community bank for the region is two years old but “light years behind the rest of you… it’s taken a bit of time to get initial funding and the right people”.
Because local councils in NI have different powers, it is harder for them to give financial support but they do have the capacity to influence others, so the team have been lobbying for their support – low key and on background, local government and private organisations. Two councils are now on board, she said.
“We need to convince people this is a good idea to retain wealth in the region and recover from Covid and tackle the climate crisis,” she added. “It’s taking a bit of time to convince them because the idea is so new to them.”
But the team have completed their business case, and shown the idea is sustainable. It has registered with FCA as a mutual and established a board.
Cllr Brown, chairing the session, said regions which are further down the road will be able to offer advice and support to projects like Northern Ireland which still have more work to do.