CCIN conference firms up co-op agenda in face of local government cash crisis

Discussion included public service mutuals, community banks and ideas for the organisation's election manifesto

This year’s conference of the Co-operative Councils Innovation Network was held in Sunderland, with Storm Arwen offering a suitably troubled backdrop to a national picture of a cost of living crisis, local authorities teetering on the edge of financial collapse and political turmoil in Westminster.

And so the old adage – that the co-op model is a response to crisis – hung heavy over an event that worked hard to join the dots between the different ideas of the co-op council movement.

This included updates on co-op development in Sunderland and a discussion on what the CCIN’s manifesto should call for, with a general election due some time in the next 12 months. And there were presentations on two policy labs – one led by Kirklees Council and co-funded by Power to Change, which is developing a framework for the co-op council model, and another from Oldham which is developing a toolkit for co-op councils.

A breakout session led by Andrew Laird, CEO of Mutual Ventures and Scott Darragh of Social adVentures / Bevan Healthcare, discussed mutual options for public services as a response to the tough times facing local authority provision.

Laird says there are around 129 of public service mutuals in the UK, mainly working in health and social care, plus smaller ones operating services such as libraries and employability support. There are three ownership options, he said: a mutual owned by the council itself – such as Achieving for Children, a children’s services provider jointly owned by Kingston, Richmond and Windsor & Maidenhead Councils; a multi-stakeholder model with ownership split between council, staff and service users; and completely independent organisation, usually owned by the community. 

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Darragh offered insights from his own mutual, Salford-based Social AdVentures, which offers public health and mental health services. It is one of the first mutuals to be spun out of the NHS in 2008, which Darragh and his team preferred to other options on offer, such as being transferred to local authority control. 

“As a person working in the NHS at quite senior level I was often really frustrated about making the change in the communities where I was working,” he said. “Often, by the time we’ve had several meetings about such an issue –asking what the budget is, and it’s gone to several committees – the issue either goes away or it was even harder to tackle. 

“So there was something about being more responsive and more dynamic and the ability to grow and develop what we were doing and engage with the community in a very different way.”

Social AdVentures has just been given £2m from a social investor to open its first three children’s homes in Greater Manchester. On the back of this, Darragh was asked by Greater Manchester mayor Andy Burnham to chair the region’s social enterprise task force on children in care, “to look at the challenges around the extractive nature of children’s services and whether or not there was a more quantitative and social solution to the 90% of residential care provided by the private sector.”

There is huge room for improvement, said Darragh: only 17% of children in care who grow up in Greater Manchester go to homes in the region, and 30% of all placements in Greater Manchester break down within 12 months. “What’s happening is we’ve doubled the cost of residential care over a 10-year period. So the task force was set up in Manchester to look at how they could rebalance that.”

The task force has produced a report, Rethinking Residential, which looks at “how you could use positive and social value to actually rethink the way that you do children’s services”, and is about to set up the first co-operative of providers in Greater Manchester, combining five social sector providers to deliver children’s services across the region. 

Other examples shared by Darragh included PossAbilities, which offers a range of services such as dementia and care leavers support in Rochdale, and Leading Lives, which offers social care for people with learning disabilities, autism and complex needs across Suffolk. Both are local authority spin-outs, and Darragh thinks such organisations have the potential to grow and succeed. 

Related: Hackney Council steps up support for co-ops and social enterprises

He also discussed Bevan Healthcare in West Yorkshire, a primary care inclusion health provider working with refugees and asylum seekers services, and homelessness services; it also provides GP services for these communities.

“Public service mutuals could really make a difference in primary care,” he added. “We’ve got 1,000 vacancies in primary care for GPs, there’s very few GPs now wanting to go into practice-based partnerships  … they don’t want to necessarily run an organisation, they want to be embedded in something that’s making a difference in their community.

Since spinning out in 2010, Bevan has grown by about 30%, diversifying so that local pharmacy and NHS income only makes up a third of its income portfolio. It also runs children’s day nurseries and a garden centre, and is about to open its first residential children’s home. “It’s been really well acid tested because we’ve had a 10 years of austerity, we’ve had a pandemic, and we’ve never made a loss year during that period, so we’ve been able to be sustainable and grow and invest back into delivering more services.”

He added: “100% of those profits are reinvested, so I wake up in the morning, like every leader in the public sector, making sure that we’re solvent and safe, but the thing I don’t have to worry about is what got paid to the shareholders at the end of the month.”

One crucial area for the co-operative growth of local economies is access to funding. Local authorities in several regions of the UK are working on setting up community-owned banks, filling a much-needed gap with conventional banks reluctant to lend to small and regional enterprises, especially in poorer areas away from the south-east – where there are a number of discriminatory factors; for instance, lower house prices in certain areas mean business owners have less collateral when applying for finance.

One of these projects is North West Mutual, whose director James Moore joined Cllr Matthew Brown, leader of Preston Council, to give an update in a breakout session.

Brown pointed out that the UK is unusual in not having regional community banks, which are well established in Europe and the US. “To be a member of the CCIN it is really encouraged that you expand the co-operative economy,” he said, “and my own view we can’t get any kind of decent social progress if we just acquiesce in a banking system that just works in the interest of certain individuals. Communities in the north west have lost over 70% of bank branches because the large banks are shutting them.”

And there are other problems, he added: for example, the Black Lives Matter movement argues that it is harder for people from a Caribbean background to get a small business loan. 

“We feel that we could change that by getting more democratic structures into communities,” said Brown.

The two warned that setting up a community bank is a long and difficult process, requiring regulatory approval and adequate capital; after much hard work, North West Mutual is only now applying for its banking licence. But the potential rewards are significant for regional economies, they said.

The conference closed with a panel discussion of CCIN’s campaign priorities for the next general election. Llanelli Town Council leader Cllr David Darkin discussed local partnerships his authority had made to drive social, economic and environmental improvements, in areas such as air quality. He said a CCIN manifesto should call for “a framework that requires councils and local parties to think long term and that will then drive co-operative partnerships”.

Cllr Zoe Nicholson, leader of Lewes District Council, told the story of a local social entrepreneur who set up a community interest company to improve the town’s stricken fishing industry, introducing sustainable, state-of-the-art practices, supported by levelling-up money. “Imagine what it would be like if we had a government or a set of rules that enabled us as councillor to be able to recognise people like this at the heart of our decision making.”

Cllr Elizabeth Dennis, leader of North Herts Council, warned of the cash crisis facing local authorities as the funding squeeze from central government continues. Dennis said this is one of “the toughest climates that local government has ever faced. We’ve constantly said, for 20 or 30 years, that local governments in crisis are really struggling with finances, but actually, this is the point where we don’t know if certain types of councils are going to exist any more”.

The response in North Herts was to created a community investment firm to “recognise the great work of local organisations, charities, groups, and facilitate them to invest back into themselves to grow and create additional capacity”. Dennis argued that as councils can’t fix all problems on their own, they need partnerships – so a CCIN manifesto would require co-production with communities, “because then everybody has a stake in what we are going to be delivering as a party and as a local authority”.

Jonathan Bland, MD of social enterprise network E3M/SBI, said there is a need for “a much bigger social economy that really focuses on people’s needs in a way that we don’t have. 

“It is about saying that these are the areas where we can really help you deliver and do things differently. But we need a few things to help make that work. So our job now is to think about what those things are and how we should apply them. And I think everybody knows how Westminster works, it is divided into silos, and you guys try to join it up on the ground … more devolution is about how we can link up, joining more solutions together.”

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