Co-op’s are not to be used for public service cuts

Adrian Bailey is one of the co-operative and mutual sector’s strongest friends in Parliament, though Adrian himself is careful not to over-stretch any claim of seniority. “It is...

But however modestly Mr Bailey plays it, his appointment as Chair of the House of Commons Business, Innovation and Skills Select Committee could be extremely significant for the co-operative sector. He is well-placed to assist with policy development in ways that could make it easier for co-operative businesses to succeed. But Adrian is also an MP with a strong history of support for the manufacturing sector. 

“I went for it for two reasons,” he explains. “The first is my long-standing interest in manufacturing industry and the government policies and frameworks needed to support it. The second is that as a representative of a constituency that in many ways is a microcosm of the country as a whole, I wanted to look at the impact of the efforts made to raise educational standards and aspirations.”

Mr Bailey, Labour/Co-op MP for West Bromwich West, is concerned that while the Labour government did much to improve the quality of schools and support for universities and further education colleges, this did not have knock-on effects for businesses that was intended. Now he is keen to push policy regarding higher education so universities provide the right courses to support British manufacturers.

“What has always amazed me is that despite the obvious educational improvements we achieved in the last government and the number of apprenticeships that were provided, wherever I went there were still complaints about the shortages of skills,” continues Adrian. “As the chair of the select committee I want to examine the policy in detail to see where and why we still have these deficits in skills.”

As would be expected, Mr Bailey is also keen to pursue an agenda that is supportive of co-operatives. In particular, he wants the Government’s attention to the needs of businesses in raising finance to take into account the specific difficulties of co-operatives, other mutuals and social enterprises. “We could think through the implications for social enterprises as well as for manufacturing,” he suggests. 

Mr Bailey also expresses interest in comments expressed by the former Treasury select committee Chair John (now Lord) McFall, who suggested in an earlier interview with the News that he could envisage a mutual lender becoming a financial intermediary for small firms. But, Mr Bailey warns, this is more likely a matter for the Treasury select committee to consider, rather than the business committee. He adds, though, that “given the difficulty of access of SMEs to finance, this is absolutely crucial”.

It can be assumed there will be other tensions between the select committees in their demarcation lines, especially with the lack of clarity about how the Treasury and the Department for Business, Innovation and Skills will divide responsibility for reforming banking regulation. Mr Bailey suggests these matters can usually be resolved amicably, as is happening with a joint inquiry at present being undertaken by the business and culture select committees over the future of the video gaming industry.

One area that is clearly a matter for the business department and the select committee is how regional industrial policy will evolve, with the abolition of regional development agencies (RDAs). This is potentially very important for co-operatives and social enterprises, given that some RDAs have been strongly supportive of the sector. 

“We are told there will be a regional growth fund,” explains Mr Bailey. “There may be opportunities there for social enterprises to tap into funds at regional level.” 

But there is a lack of detail about what support will be provided on a regional basis in place of the RDAs. While there will be enterprise partnerships established, they will have less funding and it is as yet unclear whether these will necessarily have the same geographical coverage of the RDAs they replace. 

Rather it is likely in the South West, for example, that more affluent areas like Bristol will cease to have a government-supported development agency, but that one could be established for deprived areas such as parts of Cornwall.

“In theory, at least, the enterprise partnerships will have closer involvement from businesses and local authorities,” he says. “Depending on what model is used, there is an opportunity for social enterprises to make their case there.” 

However, as Mr Bailey recognises, there is anxiety rather than optimism in the co-operative and wider business sector about what will follow RDAs. “There is considerable nervousness about the impact of the abolition of RDAs, possibly in particular for co-ops,” he says.

Another opportunity for the sector comes with problems, Mr Bailey concedes: “It is very politically sensitive. With the need to make substantial savings in public services, it may be that employees in the public sector will come up with a model that is more cost efficient than the previous public service model. That, of course, is very delicate now. The last thing we want to see is co-ops as a cheap way to make public service cuts. But there may be opportunities.”

Adrian is doubtful about holding committee inquiries to deal specifically about problems faced by co-ops and social enterprises, but more optimistic that the sector’s difficulties could be considered as part of wider investigations. “We could have an inquiry just into support for social enterprises, but given the big issues confronting us at the moment it is not a priority,” he says. “But as a sub-set of an enquiry examining support for business, we could examine it.”

One thing that Mr Bailey is certain about is that he is not going to rush into things. “I am still on a steep learning curve,” he says. The same is true for the other newly elected select committee chairs — whose appointments for the first time have been by ballot of MPs. For many reasons, this is start of something very new.”

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