Analysis: Wales sets sights on becoming a co-operation nation

The Welsh Co-operative and Mutuals Commission has provided a blueprint for the growth of co-operation. In the report, it details a number of areas from education to business support and investment to building networks. 

Who is on the Commission?

• Professor Andrew Davies
• Nicholas Bennett, Chief Executive of Community Housing Cymru
• Dr Molly Scott Cato, Professor of Strategy and Sustainability at Roehampton University
• Dame Pauline Green, President of International Co-operative Alliance
• David Jenkins, Chair of the Aneurin Bevan Health Board and Chair of Wales Co-operative Centre
• Robin Murray, London School of Economics
• Dr Ben Reynolds, Director of Trilein
• Sir Paul Williams, Former Chief Executive NHS Wales

Here is a synopsis of the main policy areas the Commission has recommended that the Welsh government take action on:

Education for Co-operation
Learning about the values, principles and skills of co-operation should be embedded throughout Wales’ education system.

What’s recommended?

• A co-operative ethos should be the central organising principle of the education system in Wales. Schools should adopt co-operative principles and values, which may be within the maintained school system or integrating co-operation into all aspects of the school. Multi-stakeholder governance of co-operative schools should be encouraged.

• Co-operation should also be embedded in the curriculum at primary and secondary level. The Welsh Baccalaureate should include learning about and through co-operative and mutual principles.

• The Higher Education Funding Council for Wales should ensure provision of at least one higher-level business qualification (e.g. MBA) in co-operative business models.

• Mainstream business and management qualifications should give the same emphasis to co-operative and mutual business models as to mainstream profit-making enterprises.

Advice, Support and Development of Co-operatives
The provision of business advice and support to encourage the formation and development of co-operatives and mutuals should be significantly strengthened by a mix of specialist support to co-operatives and mutuals and sectoral programmes to strengthen specific sectors with growth potential.

How will this be done?

• Secure the future of business advice and support programmes for co-operatives and mutuals.

• Extend specialist support for growth and development of co-operatives in specific sectors with growth potential.

• Co-operatives should support the development of new co-operatives, either as spin-offs, as suppliers, or as mentors.

• Strengthen the support and advice to managers and employees of failing, but economically viable, companies to consider a co-operative and mutual business model as a means of saving the enterprise.

Investment Finance
The absence of finance to meet the investment requirements of co-operatives and mutuals is a high priority as often mainstream finance is not appropriate.

What needs to happen?

• Creation of a grants and loan fund – Co-operative and Mutual Finance Wales – dedicated to co-operative, mutual and other social enterprises, with earmarked funds for business succession and employee buy-outs.

• Business support providers should collaborate closely with funders to ensure that funders understand co-operative and mutual business models and that co-operative and mutual businesses are ‘investment-ready’ when their projects are passed through to the funders.

Land and Assets

Co-operative ownership of land and assets can retain value for community benefit and ensure vital services are retained also.

Making this a reality:

• Legislation is needed to enable communities to list their community assets and have right of first refusal to bring assets into community ownership. Asset locking will ensure effective safeguards are in place.

• The encouragement of the development of Community Development Finance Institutions (CDFIs) is needed in this area to enable more capital investment.

Procurement
Inflexible approaches to public procurement and lack of development of the co-operative supply chain, means that the sector has limited access to important markets.

How to open up access?

• Ensure specialist expertise in co-operative procurement be developed within Value Wales

• and mainstreamed into procurement practice throughout Wales.

• Reference to co-operatives and mutuals be made in all Welsh government procurement guidance.

• A development of a co-operative and mutual supply chain for public, consumer and private services, to open new markets for co-operatives and mutuals, utilising the new Joint Bidding guidance.

• A pilot project can demonstrate the potential of public procurement to develop co-operatives.

Intelligence and Innovation
Intelligence and innovation are vital to the long-term success of co-operative enterprises. In a small country, and with a tough economic climate, Wales’ innovation strategy needs to embrace and promote the co-operative and mutual business model.

Creation of innovation:

• The Welsh Government needs to ensure its Innovation Wales strategy fully embraces the importance of co-operatives and mutuals.

• Capacity for innovation and dissemination should be included in the provision of specialist sector support for co-operatives and mutuals.

Networks and Advocacy
With a limited capacity in Wales to develop policy and strategy on co-operative and mutual development, the Commission challenges the co-operative and mutual movement to collaborate to increase its voice, influence and capacity.

How to push the co-operative agenda?

• Develop capacity for research, strategy and policy on the expansion of the co-operative and mutual economy, to act as source of international economic intelligence and provide strategic leadership to the movement in Wales.

• Form a ‘leaders forum’ of key co-operative and mutual business leaders and entrepreneurs to advise Welsh Ministers and, as appropriate, represent the sector. Facilitate networking and awareness-raising.

What next?
The Commission’s recommendations form a coherent package of actions to kick-start a step change in the start-up and development of co-operatives and mutuals across Wales. The Commission recommends that the Welsh Government must lead and pump-prime the package, with delivery being managed by a co-operative intermediary, through co-operative and mutual organisations, or those sympathetic to co-operative values and principles, wherever possible.