Recognition for co-operative enterprise
Government must recognise the value of co-operatives and mutuals to our society and economy.
The economic crisis has shown the fragility of stock-market-owned business, and the importance of a diversity of corporate forms to the British economy. Trust in many businesses is at an all time low, so it is crucial that we understand and value co-ops and mutuals, where trust has been maintained. Government can and should act to enable the growth of a more co-operative economy.
Labour can help this by providing a clear role and vision for co-operatives across the major areas of business policy. Too often, co-operatives and mutuals are overlooked when business policy is devised. Successive Governments have seen the shareholder firm as the norm for business and so legislation and regulation tend to be designed with only their needs in mind. I believe in a level playing field that allows all business models an equal chance of success. To make this a reality, I would promote a Labour strategy for getting the best from the co-operative and mutual sector, ensuring that their role is considered across all policy areas.
In practical terms, this means better tailored business advice, start up finance, and ongoing business support. I would then make it a priority to ensure it is as easy and cost effective to set up a co-op as any other type of business by providing the same mainstream business advice, support and administrative back up that companies enjoy. At the same time, we should ensure co-operatives are given equal treatment in dealings with Government.
Labour should do this by creating a Government Office for Mutuals with a designated Minister for Mutuals. I was proud to serve as Labour’s unofficial Minister for Mutuals, when at the Treasury. Labour should formalise this position to ensure that the sector is treated on an equal footing with companies. This initiative would raise the profile of mutuals across Government and help to ensure that there is a focus for working with them.
A Government Office for Mutuals could challenge every Government Department to take mutuals seriously and treat them fairly, and it would also be a source of advice and expertise.
Co-operative supporters’ trusts are excellent community examples of how fans can come together to play a part in owning and running their clubs.
Supporters’ trusts are at a disadvantage in comparison to private investors, who have the upper hand in the sale of sports clubs because of ready access to capital finance. As we can see at Manchester United and other clubs, fans can be vocal, but there is no real accountability if they feel their club is being mismanaged. We should explore how to empower sports fans to take control of their clubs, including by learning the lessons from other countries.
A financial services sector that serves people
Mutuals did not create or contribute to the financial crisis and have stood out as responsible financial services providers, in contrast to the shareholder-owned banks.
Government must not allow the UK’s financial services sector to return to the ‘business as usual’ model that has proved so costly to the economy and public finances. It is vital that the banks face competition from mutuals, which would also reduce the risk of the mistakes of the credit crunch being repeated.
This means we need a financial services sector that puts the interests of people first, not the banks, one that respects and understands the different capital basis for mutuals. We need a regulatory and policy environment that supports and rewards the prudent behaviour of mutuals.
Labour should commit to alter the terms and approach of Regulatory Authorities to match Government Policy. Mutual capital differs from proprietary capital and cannot be regulated in the same way. The Tories’ decision to get rid of the FSA risks causing confusion in the financial services industry. The new Regulator should have a new principle ‘to act to maintain diversity of corporate forms, by affording equal respect to mutual forms of corporate organisation.’
I also believe we should commit to taking bold steps that will demonstrate our intentions and return Northern Rock to the mutual sector. Keeping Northern Rock independent of the big banks will be good for competition. Northern Rock could be converted to an asset locked public interest mutual. As a mutual committed to its core business, a remutualised Northern Rock would help the Government by supporting competition and diversity through the maintenance of a strong mutually-owned financial sector.
Remutualisation would strengthen competition and create a more diversified financial sector. It could be expected to generate an advantage to the taxpayer over the long run in excess of the immediate benefit of any capital proceeds in the short run. Diversity matters at a local community level too. Credit unions are a force for good in financial services. We should actively assist the growth and strengthening of the credit union sector. I believe we should help credit unions to offer new savings products through many more outlets, such as the post office network.
Putting the people into public services
Public services are about serving the people. They should not be an opportunity for private companies to make profits from the taxpayer, nor should we allow valuable public assets to be siphoned off for private gain.
We need public service providers that are as efficient as private sector operators, but who maintain a public service ethos by being accountable to the people they serve.
Co-operatives and mutuals are playing a small but increasing role in the delivery of public services. From education to housing, health care to leisure services, both user and staff led co-operatives are providing high quality public services that respond efficiently and effectively to people’s needs. These new mutuals are focussed on a high level of service delivery, whilst remaining accountable to their users and staff. These developments offer lessons for the whole public sector, serving — and accountable to — the people who fund it through their taxes.
Co-operatives already work across a range of health and social care provision including home care, out of hours GP co-operatives and foster care. I support health mutuals that are clearly non-profit and that remain part of the NHS, such as Local Care Direct which provides out of hours GP services across West Yorkshire.
There are opportunities today for more primary care services to be delivered by such health co-ops, working in partnership with health trusts. We should commit to assist public sector managers, staff and their trade unions who wish to provide their services through customer-led mutuals, working within the NHS and its national standards.
Education and Child Care
I am proud of Labour’s extension of co-operative principles to education. When we launched the Children’s Plan consultation in 2007, people told us that they wanted to get more involved in their children’s education. We know that involving the community in the governance of schools can have a huge impact on standards. I want to see more parents and communities actively involved in schools, and schools based on the principles of social enterprise and co-operation can do this in a unique way.
Co-operative Trust Schools allow schools to adopt co-operative values as their ethos and use a membership structure to engage parents, carers, pupils, teachers and the local community — but still within a state system of education, in stark contrast to the Tories’ determination to pit school against school in a competition which would see the weakest wither away, to the detriment of their pupils.
Co-operative schools are fundamentally different from Tory ‘free market schools’ in maintaining the role of Local Authorities, national terms and conditions for staff and a comprehensive ethos. I believe in assisting teachers and parents to establish co-operative schools within a state system. I am passionate about supporting Sure Start. We must defend Sure Start against Tory cuts and promote help for communities by involving those who use their services.
Sure Start Children’s Centres offer excellent opportunities to bring together parents, teachers and support staff to work co-operatively in running networks of Sure Start centres in partnership with local authorities across a local area. We must resist Tory pressure for any Sure Start centres to opt-out and go it alone on the model of their new ‘free schools’.
This country desperately needs more and better housing for rent at affordable prices that offer people decent, secure homes. We need to think creatively about how to accelerate investment in the construction of new affordable homes.
I am in favour of a major extension of council housing and locally controlled housing. The evidence suggests co-operative and mutual housing tends to deliver high resident and member satisfaction with services, together with a vibrant community. This means we should be prepared to be radical about the ownership of social housing, and be guided by the principle that the customer for this service is the tenant. That means social landlords must be accountable to their tenants for both the quality of service they provide, and the manner in which they manage homes.
By making housing associations democratic, we will achieve a fundamental shift in favour of increased accountability to the local community. Housing associations are effective providers of rented accommodation, and many are very good at consulting and involving residents in decision making. Currently, however, they do this on a voluntary basis. I want to see tenants given their rightful place in all housing associations and this can best be achieved by giving them membership of their association.
Where there are going to be stock transfers, we should, instead of transferring public assets to the housing association sector, favour those that empower tenants and involve them in decision making. Examples include the community housing mutual and the community gateway models, which are used in a number of towns and cities.
Community Land Trusts let communities acquire land and hold in perpetuity for the benefit of the local community. They work by enabling the occupiers to pay for the use of buildings and services at prices they can afford, while the value of the land is permanently locked in, to be used for them and future generations by the Community Land Trust.
We should encourage Co-operative Councils
The best way to ensure local public services are designed around the needs of our citizens is to give them a bigger role in their delivery. That is why I am a supporter of moves to develop Co-operative Councils, and I applaud the Labour local authorities that are leading the way on this.
Above all, the Co-operative Council idea is a mind-set, by which the local authority makes it a top priority to share power and decision making with local people, for the greater good of the whole community. It works by encouraging citizens and communities to take more responsibility for running some services themselves, making it easier for them to do so, and freeing up resources to guarantee services for the most vulnerable.
Sometimes this will mean helping people to set up co-operatives to run local services, and at other times the best approach will be to give the community the tools they need to do the job. This helps to build stronger communities, provides local leadership, and develops flexible services.
Co-operative councils work in partnership with local groups and individuals to put the needs of the community first, rather than cutting them loose to sink or swim within a competitive market environment as Tory thinking proposes.