Andrew Davies: Welsh Government will facilitate co-operative growth

The Welsh Co-operative and Mutuals Commission is “an opportunity to contribute to the debate about the future, and not just in Wales,” said its chair.

Addressing the Co-operative Congress in Cardiff, Andrew Davies said the commission, which will report in September, will make recommendations designed to inspire action and be sustainable. But, he added, Government action must be in partnership with the co-operative movement.

“All the signs are that this is the approach that the Welsh Government wishes to adopt, facilitating sustainable co-operative growth of our communities and of our economy,” he said. “We have an opportunity here in Wales for the commission to set out a vision for a co-operative nation, and provide a route map, or perhaps a sat nav, on how to get there.”

The Welsh Government set up the commission last July, to consider evidence for supporting the co-operative economy, make recommendations on developing it, suggest how business advice for the sector might be strengthened and identify target areas for support by the Welsh Government.

The commission is investigating everything from education to rail transport, Mr Davies told the Congress. The 2011 Welsh Labour manifesto, which he authored, had committed the party to exploring and supporting mutually owned enterprises. It covered economic development, fairer funding and innovative investment in public services through credit unions, charities, co-ops and social enterprises.

It promised to promote mutual ownership of housing, including consideration of the ‘New Foundations’ model, and to work with social landlords to ensure they are more accountable. It also considered the Wales & Border rail franchise, existing arrangements for which end in 2018.

Mr Davies said the commission was fulfilling the commitments of the manifesto. “We will examine the feasibility of the Wales & Border rail franchise being run on a not-for-dividend basis, such as Glas Cymru,” he said.

“Glas Cymru, the not-for profit, or more accurately the not-for dividend, company that owns the utility Welsh Water has provided a new model for a more ethically run business. The previous Labour Government used Glas Cymru as the governance model when Network Rail was created out of the ashes of the ill-fated Railtrack.”

Health and social services provided more opportunities, he said. “The Social Services and Well-being (Wales) Bill’ will provide the law needed to take forward the programme of change and commitments contained within [the] Sustainable Social Services for Wales [white paper] and meet the changing needs of the people of Wales. The Bill in its entirety embeds in law a Welsh model in which co-production and other forms of partnership and co-operative activity could flourish.”

And, he added, last week a major review of education services for the Welsh Government by Robert Hill recommended extending the Co-operative School Trust model to improve the governance of schools.

“The Welsh Government already recognises the contribution the co-operative and mutuals sector makes to the Welsh economy and gives significant support to the sector,” said Mr Davies. “The Wales Co-operative Centre, Social Firms Wales and the Development Trust Association all currently receive core funding.

“Given the conditions of public finances for the next five to 10 years we’re going to have to be imaginative and innovative in how we can draw down resources.” The Welsh Government’s revenue budget in 2015-16 would be £280m lower than in 2014-15, and £1.68bn lower than 2010-11.

“The Commission is clear that the potential for the mutualisation of public services should not be seen as an opportunity to offload failing services, a means to reduce costs and a race to the bottom, or indeed as a prelude to eventual demutualisation and privatisation of those services.

“We fully understand the concerns of those such as the trade unions, who fear the threat to public services as well as the terms and conditions of their members, and we believe our Commission’s recommendations on the use of asset locks and other mechanisms will not only help give assurance but also provide a practical and evidence-based route map on mutualisation.”