Labour’s pledge to double the size of the co-operative and mutuals economy has kickstarted a movement-wide conversation on how the target could be met.
Despite being the birthplace of the modern co-operative movement, the UK, which has over 7,000 co-ops, is no longer the world leader in co-operative development and density, lagging behind some countries with similar populations, including France (22,000), Spain (20,000) and Italy (40,000). A recent report published by the Co-operative Party argues that policymakers can achieve substantial co-operative growth providing an effective framework and a supportive system are in place.
Presented at Co-op Congress, the report highlights lessons from five countries: Italy, France, Catalonia, South Korea and Sweden, chosen for their similarities with the UK in terms of size, scale, and overall economy. Italy, which has a strong social co-operative sector, and France, with co-ops active in retail, banking and industry, met these criteria. South Korea was chosen after it managed to double the size of its co-operative sector, while Sweden has important lessons in terms of how to grow the housing co-operative sector. This is important in the context of a 10-minute bill relating to housing co-ops submitted by MP Andrew Pakes, currently going through parliament.
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“We wanted to see some of the great examples which are happening across the world in this space, take some learning, some ideas from really stand out examples, and then see if we can put them into our work and our engagement with government going forward,” says Daniel Monaghan, policy officer at the Party and author of the report. With its thriving co-operative sector, Catalonia was another obvious choice.
“We also wanted to see how decision makers at a regional level could learn from a really fantastic example of regional growth. We were keen to see how, for example, regional authorities, our councillors and our Labour/Co-op mayors could maybe take some learnings from what they’re doing in Catalonia to really boost their co-operative and wider social economy.
“We could have also looked at places like Germany, Norway and the United States but we just came down on Sweden, really, because we felt it that a 25% figure for co-op housing in the housing market was really fantastic, and it shows how you can achieve something with a government committed to do that. We could have chosen any number of other countries as well to expand on that list of five.”
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The report highlights a range of lessons in areas such as procurement, economic development, legislation, co-operative development and funding. These include ensuring all procurement opportunities are available and open to co-ops and mutuals and ensuring public procurement processes incorporate social value criteria. In terms of economic development, the report highlights the need to provide a clear role in the government’s economic development and industrial strategies for co-ops and mutuals and ensuring co-ops are included in local growth plans.
Another key to co-operative success is ensuring the framework which govern co-ops is growth enabling, provides clarity and enables investors, co-operators, and others to feel assured of what they do. Other important lessons are the need for an effective regionalised co-operative development sector and the adequate availability of capital funding for new and existing co-ops.
“An area which we’re always looking for new ideas on is making sure that finance is right for and tailored towards co-operatives, because this is often is listed as a challenge by the co-operatives and stakeholders we engage with,” says Monaghan. “This isn’t just public funding, but also institutional investors, social funding, private funding, and the mechanisms to get that funding into the co-ops in a way that works for them while also both preserving their model and enabling scale up and diversification.
There are some sector-specific lessons as well, he adds, citing South Korea’s vision for social care and Sweden’s housing co-op movement. The report highlights how having buy in from various stakeholders and from government, both locally and nationally, can make a real difference to co-op development – while co-op development can in turn make a difference in specific sectors.
Beyond social care and housing, the Co-operative Party feels there are opportunities right across the economy. A new Mutual and Cooperative Business Council comprising leading mutuals and sector bodies from across the co-operative and mutual sector, is exploring potential growth areas.
“It’s about trying to make sure that the conditions for growth are in place to enable co-ops and mutuals to scale. And I think we’re already starting to see that with things like the Local Power Plan, which is focusing on renewable, community owned co-operatives,” says Monaghan. “We’ll be seeing other things through the Devolution Bill on the Community Right to Buy, which I think will enable greater amounts of co-ops and community benefit societies into sectors like leisure and hospitality. So we’re very keen to support the work of the Growth Council. The Call for Evidence, which was announced by the business secretary, will no doubt provide some really helpful ideas and clear avenues for growth in a variety of sectors.”
With the Law Commission also reviewing the Co-operative and Community Benefit Society Act 2014, there are lessons the UK could learn from legislative changes in the five case study countries. For example, France’s Loi Hamon (Hamon Law) established a preferential right for workers in the buyout of enterprises while Italy’s 1985 Marcora Law gave workers first right of refusal on the purchase of the firm or its assets during periods of business closure. Monaghan believes the Law Commission review “could open up opportunities and avenues” for updating and improving co-operative legislation to make it more growth enabling.
As to what’s next for the Party, it will continue to engage with its MPs and the APPGs on mutuals and the social, co-op and community economy.
“We’ll also be trying to raise awareness of the report to the wider co-op movement, engaging with other co-operative elected representatives throughout the UK. We think that the report provides some interesting examples which may not have been readily available to these elected representatives, as they’re drawn from international sources. So hopefully it provides some interesting new examples and new models which they can maybe consider going forward.”
