Community co-ops in the Highlands and Islands of Scotland

How co-op values have helped to support close-knit communities spread across the sparsely populated region

The north of Scotland, and the islands surrounding it, is home to stunning scenery, a sparse population – and several close-knit rural communities that have set up co-operatives to provide services, shops and spaces to work together. 

Many of these co-ops were set up through a development programme orchestrated by the Highlands & Islands Development Board (HIDB), which began in 1977 in the Highlands and Islands of Scotland. Over the last few years, the Community Co-operatives History Group has been working with some of those who delivered the original programme to document what happened – and how co-ops in the region today are still thriving, and still bridging the communities they serve. 

The total land area of the Highlands and Islands of Scotland is 10,225 square miles (26,484 sq km) – that’s 33% of the land area of Scotland and 11.4% of Great Britain. Yet the population of this area is only 469,365: 46 people for every square mile (18 per sq km). It is the most mountainous part of the UK, and, with its concentrated populations of Scots pine forest, is the only area in the British Isles to have the taiga (snow forest) biome. The three biggest industries here are agriculture, forestry and fishing; accommodation; and food service and health.

Over the centuries, people in this area have endured famine, uprisings, battles and emigration, with later experiences defined by the Highland Clearances  – the forced evictions of a significant number of tenants in the Scottish Highlands and Islands between 1750 and 1860 to create grazing land – and the introduction of the ​​Crofters Holdings (Scotland) Act 1886.

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Today, people and communities are spread throughout remote and sparsely populated rural and island areas, where residents know the value – and necessity – of working together and pooling resources for a common purpose. 

In this region, early community co-operatives – businesses which trade primarily for the benefit of their community and are accountable to that community – operated general shops, sold agricultural supplies, and operated craft workshops, hostels and other tourism projects. They often started by taking over threatened core services like retail shops and petrol stations, without which communities would decline quickly.

Since 1977 approximately 25 community co-operatives have been established in the Highlands and Islands of Scotland, many of which are still trading today. Most received support from the HIDB, in recognition that private enterprises were unwilling to invest in these communities. This strategy helped to stem depopulation, encouraged the development of the local economy, provided local employment opportunities, upgraded local infrastructure and improved living conditions. 

The early story of the HIBD and its success in stimulating co-ops in the Highlands and Islands has people at its heart and is a tale that shouldn’t be forgotten. Our organisation, the Community Co-operatives History Group, consists of about 10 people – all bar one of whom live in the region, with some being Gaelic speakers. We all retain contact with community co-ops (co‑chomuinn in Gaelic) that continue to thrive.

HIDB community co-ops team 1980 – Robert Storey, Roy Pedersen, John Angus Mackay, Agnes Gillies (later Rennie), Coinneach Maclean, Chas Ball (Pedersen collection)

Among these is Co-Chomunn Na Hearadh (Harris Community Shop), which was set up In 1979, when the existing village shop in Leverburgh looked likely to close down. A community co-operative was set up and, by selling local shares at £25 each, sufficient funds were raised to allow the community to run its own enterprise.

Today the co-operative – community-owned and managed by a voluntary committee – provides a regular supply of good quality goods (sourced through FRTS, which supplies the Co-op Group and other independent retail societies in the UK), particularly fresh fruit and vegetables. 

All profits are re-invested in the business and in 2007 the community co-op was able to purchase its building outright. The shop maintains a full-time manager and six full-time staff, and also provides a craft shop and exhibition area for visitors to the area.

How did the HIDB support these communities?

In the 1970s, the HIDB had powers to encourage the formation and growth of community co-operatives, under the powers given to it under the Highland and Islands Development (Scotland) Act 1965, which had established the board with “the purpose of assisting the people of the Highlands and Islands to improve their economic and social conditions.”

The development of HIDB’s community co-operative scheme can be traced back to 1976. In that year, Brian Wilson, then editor of the West Highland Free Press (WHFP – itself a worker-owned co-operative), visited communities in the west coast of Ireland and published a series of articles in the paper.

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On the back of this – and following discussions with Professor Kenneth Alexander, then chair of the HIDB – the agency researched community economic development in the Western Gaeltacht in Ireland – districts where the Irish government recognises that the Irish language is the predominant vernacular. As part of this, a party from Ireland, including representatives of community co-ops in Glencolumkille in Donegal, and Innisman on the Aran islands, visited the Western Isles of Scotland. 

In the following months, communities in the Western Isles became more interested in the concept of community co-operatives and in September 1977, HIDB staff and field officers visited the Irish Gaeltacht to examine the co-operative structure in more detail. Interest continued to grow in places such as the Islands of Lewis and Harris, Uist and Barra in the Outer Hebrides. As a result of the lessons learnt from Ireland, HIDB decided to support the “multi-functional community co-operative model”. 

In November of that year, following public meetings attended by both the HIDB chair and secretary, and representatives of Gaeltarra Éireann (an Irish state industrial development agency set up in 1957 specifically for the Gaeltacht), the HIDB launched a support programme to encourage enterprise initiatives in marginal areas where its conventional approach to economic development was not deemed as successful and where depopulation was increasing.

The pilot programme operated in the Outer Hebrides, where two field workers were appointed to stimulate interest and offer practical support. The first phase demonstrated some valuable lessons, with successful co-ops established in communities ranging from Ness, in Lewis (population 2,500) to the island of Vatersay in the south (population 70).

A year after the launch of the first HIDB community co-operative support scheme, the programme was extended throughout the rest of the Highlands and Islands, and a third field worker, based initially in Inverness, was appointed to cover the Argyll, Highland, Orkney and Shetland council areas.

A bottom-up approach

The successful development of community co-operatives required a bottom-up approach. It became clear that local communities themselves could, through their own efforts and resources, bring about economic and social development, if given initial financial incentives and support from dedicated development workers.

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Although there was national and local publicity about the community co-operatives programme when it was launched in 1977, it was the appointment of two local Gaelic-speaking field officers, who, with support from HIDB HQ in Inverness, took the ideas from Ireland and worked with community groups and community councils to develop them, that helped to ensure early results. The field officers supported and encouraged interested communities to consider the formation of local steering groups. These groups of local activists would investigate the viability of business proposals and assess the strength of community support. 

The community-owned Papa Westray hostel in Orkney

A district that could demonstrate the economic viability of its business ideas, and had a level of community support, could then apply to the HIDB for approval of its proposals. If it was successful it would receive grant assistance to match share capital raised by the community, on the basis that all shareholders had one vote irrespective of their shareholding. Many communities reached out to former residents as well as those living in the area and set the minimum share at £25 or £50.

Community co-operatives were registered as industrial and provident societies using rules drafted by HIDB staff for this purpose. In the early years, a successful community co-op could also secure funding from HIDB, on a reducing scale, to employ a manager for up to five years. Further funding was also possible if a successful grant application was made for individual business units managed by the co-operative. These were eligible for a normal regional development grant and loan package if considered sustainable by HIDB finance officers.

In the 1980s, the community co-operatives programme and the HIDB facilitated a range of positive results not the least of which was the creation and nurturing of an internal development dynamic based on community development principles (“we can do this together – we can bring about positive change”). This has involved HIDB and its successor Highlands and Islands Enterprise (HIE) assisting in the establishment of support organisations such as HI-ARTS (arts and cultural activities), Community Land Scotland (land reform projects) and Community Energy Scotland (renewable energy schemes), with the support of Co-operative Development Scotland and the Plunkett Foundation.

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For smaller, more remote communities in the Highlands and Islands, “the co-operatives created relatively modest – though locally important – numbers of new jobs, services, and enterprises,” wrote researcher Mike Gordon, in a paper presented at the 2002 International Cooperative Alliance Research Conference held in Naousa, Greece.

“In the face of the failure, unwillingness, or insufficiency of both private and public sector investment, the initiative offered plans and hope for a third way alternative. More significantly, the enterprises changed people’s lives, in that people did all manner of things they hadn’t expected to do – or be able to do – and gained business management skills and a greater measure of empowerment and control. The facilitation and encouragement of the co-ops by HIDB was genuinely bottom-up.”

The focus of the majority of co-ops was in providing local services, but there were instances in which the investment by communities and the HIDB levered wider economic benefits. 

Some co-ops developed activities that generated revenue from external sales – for example Co-Chomunn na Pairc (the community co-operative in South Lochs, Isle of Lewis) ‘exported’ knitwear and farmed fish, the latter with a multinational partner. And in Harris, Co-Chomunn na Hearadh, the Harris community co-op, partnered with History Craft of Cirencester to manufacture locally high-quality artefacts for museums and craft centres like its own in Leverburgh.

The legacy in action

This ability of communities to establish value-added enterprise paved the way for future community land ownership and renewable community energy projects – in some instances with some of the same people who had earned their spurs in the community co-operatives field acting as leaders.

“The initiative raised consciousness of what might be possible and inspired people elsewhere in Scotland, and the UK generally, to do similar things,” wrote Gordon. 

“It reinforced the tradition of mutual co-operation in the Highlands and Islands, building confidence and capacity, unlocking creative potential – as well as marshalling and deploying collective resources, financial and otherwise, which could be used to attract more funding and implement plans. In addition, the co-ops built asset bases and revenue income, to underpin their development.”

The community development approach taken by the HIDB in the promotion and development of community co-operatives created a lot of good publicity for the agency. However, in 1982, less than five years after its inception, in an attempt to integrate the field officers’ role into the organisation’s wider functions, this specific element of the programme was marginalised and the team was dismantled. 

This team had grown to comprise four field officers, two located in the Western Isles and one each in the North Isles (covering Orkney, Shetland and the north coast of the mainland from a base in Orkney) and Inverness. They had been able to operate alongside local steering groups and provide active dedicated support. Under a new plan these workers were encouraged to apply for posts in the finance departments of HIDB, retaining a presence in the key areas for development support, but with a less proactive job description.

But happily, by 1985 the role of development or field workers was re-established through the newly formed Association of Community Enterprises in the Highlands and Islands (ACEHI) which, with the support of HIDB, continued the expansion of the community co-operatives programme.