In the closing speech of the Co-operative Enterprise Hub Conference, Michael Fairclough described the financial landscape ahead, and warned advisors they would have to tighten their belts.
Mr Fairclough, Head of Community and Co-operative Investment at the Co-operative Group, said the Hub’s budget would be affected by the Group’s poor performance. “When it declared its profits it wasn’t good news,” he told the delegates, most of whom are co-operative advisors who rely on Hub funding.
“In the past, the Co-operative Enterprise Hub has received 10 per cent of distributions, which come from the Group’s profits. Obviously, 10 per cent of nothing is nothing.
“There aren’t any distributions and there’s no money. What the business needs to do now is move away from distributions to revenue budgets.”
It was up to the Group to decide how much it could spare, he said. But financial planning would be made even more difficult by uncertainty about the Co-operative Bank. “The next six to eight weeks will be crucial. The chances are that it’s going to at the last minute for budgets for 2014.”
Despite this, he said, funding would continue. “The Co-op has always worked on the basis of being a responsible funder. There’s no way we’re going to pull the rug from under the Co-operative Enterprise Hub. I wouldn’t worry about that in the short term.
“We may have to cut our cloth. We need to be a bit more disciplined and a bit more savvy. Whether we have to cut costs or not, there are some pretty obvious ways we can make savings.
“The Hub has been designed to be incredibly flexible for your clients, but it’s probably been over the top. Four days of advice and six months to deliver it is probably overly generous.” This would likely become two days over three or four months, with an option to provide four days if necessary.
Advisors should also expect more from clients on application. “We’re going to have to be more and more convinced that we’re going to get a good shot at completing the process before we offer advice,” he said. “We think we can do it, with help from the lead contractors.”
The conference itself was safe, however. “Its quite a pricey thing to put on every year, but we think it’s a good investment and an essential one,” Mr Fairclough said.
He had been encouraged by Co-op Group Chief Executive Euan Sutherland’s efforts to understand what is different about the Co-op. “We’re really being challenged by Euan’s executive team,” he said. “It’s like being shoved through this filter and at the bottom little blobs come out as purified co-operative difference.
“Every time a little blob comes out the Hub is there. All the stuff you do is like dynamite. It’s pure what we’re about in terms of co-operative difference. I don’t believe it’s something that the other corporates out there can copy.”