UKSCS conference looks at principle 6 and ways to build a co-op ecosystem

The event included updates on worker co-ops, accounting, building societies and the UKSCS’s own journal

The UK Society for Co-operative Studies’ annual conference, held in Lichfield last week, focused on ways to build co-operation within the movement and heard from researchers on worker co-ops, accounting and secondary co-ops.  

The event was held at the HQ of retail society Central Co-op, whose CEO Debbie Robinson opened the event with a look at principle 6, co-operation among co-ops. Robinson, who has previously called for more efforts in this direction from the movement, told the event: “It’s easily said but much harder to achieve. There’s one thing getting in the way, and that’s us.”

She said principle 6 would bring trading advantages to co-ops, helping them to manage unaffordable costs of scale and offering common branding worldwide through the ICA marque – which could be enhanced by the creation of an app to direct travellers to the nearest co-op store when they land in a foreign country.

It could also increase the movement’s wider impact, argued Robinson: for instance, on minimising climate impact it would allow different co-ops to pool knowledge and expertise. And on education “in troubled time co-ops can help people sift through all the mass media narratives and business narratives to see the real issues”.

Ranking high among of Central’s principle 6 successes is its work alongside the Co-op College and Revolver with agri co-ops in Malawi. Sales of products in Central stores now account for 10% of all Malawi’s exports to the UK, said Robinson, adding that the project offers “a simple story that resonates with people” and a replicable model for other co-ops.

Related: Central Co-op’s Malawi Partnership continues to thrive

Next up came a panel discussion on what it actually means to be a federation and a movement, with John Atherton of, Robin Fieth of the Building Societies Association and Zuna Farooq (strategy and intelligence manager at the Co-op Group.

John Atherton

Atherton gave an update on the progress of, the newly formed federation for the UK’s worker co-ops. He said that while worker co-ops are “fundamentally about liberating workers”, the federation is about doing it at scale – to help create more worker co-ops and support those already in operation.

So far, it has 85 members and has raised about 150,000, a third of which comes from worker co-ops themselves, with the rest from donations and grant funding. It has three part-time workers and 30 volunteer supporters who are helping to design and deliver the organisation.

Resources are tight, he said, but “our workers are an asset – we need their support; our goal is mobilise them, use their insights, their resources, and give them the tools, training and digital infrastructure they need to help us.”

Related: hosts first Autumn Assembly

Robin Fieth, CEO of BSA, said the sense of being a movement had been lost to the building society sector over the years but “there is a potential we can all tap into”, with a goal of putting co-ops and financial mutuals at heart of financial services sector.

But the concept of mutual is so broad, it makes sense to have different federations for different types, so that “members value the support we give”.

Although the building society sector is strong – with 26 million memberships, £507bn assets, 19% of UK savings and 23% of UK mortgages – most members don’t know they are part of a mutual. But there is a strong loyalty to build on, with 92% of members say they would recommend their building society to friends, compared to just 72% for traditional banks.

Robin Fieth remains positive about the future of building societies despite the financial crisis
Robin Fieth

The sector also has reputational strength: of conduct fines handed down since 2010, just 01.% went to building societies. This partly because building societies operate in lower-risk sectors, and partly because being customer-owned makes them more mindful of their members, said Fieth.

There are ways for the sector to find a sense of purpose: Fieth said he wants the sector to provide universal banking, emulating the efforts of Nationwide in Windsor, where it is the sole provider of high street branch services and has offered locals a donation of £200 to the community if they join.

Meanwhile, since 2015 BSA has offered a masters course at Loughborough for future mutual sector leaders; more than half of the students have been women or did not have a first degree. The sector also offers good jobs and progression to school leavers, said Fieth.

Further sense of a movement comes from the BSA’s work with other organisations, including Co-operatives UK and Abcul, to produce a mutuals election prospectus that calls for “an inclusive growing economy that benefits everyone”. BSA is also calling for a comprehensive update of legislation for mutuals. “We want to see general mutual co-operative capital created that we can draw on to start things growing,” he said.

From the Co-op Group, Zuna Farooq said it was important to achieve scale as tough market conditions continue. Working through the FRTS helps, she said, but the Group still has to work harder to capitalise on its assets, such as floor space and footfall.

One way forward is to follow a platform business model which “uses technology, physical infrastructure and organisational services to facilitate exchanges and interactions between different user groups,” she said.

Examples of this in practice include the Group’s own-brand range and distribution network, she said, as well as collaboration with platforms outside its organisation.

Related: Co-op Group announces delivery partnership with Uber Direct

In a Q&A following the panel, Sean Farmelo, from Stirchley Co-operative Development, was critical of co-ops working with platforms like Uber and Deliveroo, which he described as “data traps exploiting workers”.

“When you do business with them you are making a decision about what type of economy we are going to have”, he said.

He also criticised building societies for funding buy-to-let mortgages and not housing co-ops.

Nick Matthews, director of Co-operatives UK and Heart of England Co-op, said there is a “trade-off between what you gain, and what you lose ethically? Is it possible to work together at scale to build platforms and gather data?”

He added that he “could never understand why corporate investors are not interested in housing co-ops. You’re looking at a steady 5% return, and less risk”.

Farooq said that when a co-op joins an existing platform, “if it’s not in alignment with our values we will struggle … I think there’s an opportunity for co-ops to come together and build something for the long term.”

Fieth said: “On co-op development I share the frustration. As a trade assocation we can’t tell members what to do but we have encouraged conversations with community land trusts. Part of problem is a complete lack of scale, it’s a vicious ciricle. 

“But one or two members are doing co-op development finance and there’s an increasing interest in co-op housing. I think there’s enough interest in co-op housing for some of our members to look at it, but also regulatory issues – what capital will regulators want? 

“It goes back to principle 6 and how do you manage it against customer demand.”

Sean Farmelo
Sean Farmelo

After the panel, Farmelo presented an update on his research project, Building political cohesion in worker co-ops and social solidarity organisations. This focused on the response of worker co-ops in Catalonia and their response to the climate crisis, with the sector working on green growth, worker control and the social and solidarity economy (SSE). 

Farmelo spoke to more than 20 co-ops for his research. The region is fruitful for study, with more than 600 worker co-ops, after the sector saw a revival in response to a housing crisis. This aspect meant the new co-ops have “a sense of mission for wider economy”, he said, and are very active in advocating around issues of migration and race. These principles are being put into practice in a range of sectors, from the hospitality industry to a co-op providing light and sound for concert events. “The co-ops come at things from solidarity perspective,” he said, “which can be lacking in uk co-ops.”

“Worker co-ops are development actors in green growth initiatives in the region,” Farmelo added. “The whole co-op ecosystem is involved, doing things in transport, architecture and so on.”

The Catalan movement benefits from support via development hubs which have strong state backing, which in turn leads to new worker co-ops with their own development impetus. On this front, said Farmelo, the UK is at a disadvantage, as it is harder for co-ops to pursue municipal contracts like waste management in an economy dominated by big firms which benefit from tax breaks.

Related: Catalonia celebrates: Exploring the region’s co-op heritage

The second day began with a keynote from Anita Mangan, editor of the Journal of Co-operative Studies, who talked about changes to the journal, making it open access with an online archive and easier search function and links.

“There’s been a lot of work behind the scenes bringing the journal into the new format,” she said, adding, “Really impressive research on co-ops is going on around the world, with lots of exciting things happening in the journal over the last 12 months.”

Going forward, the journal is planning a mix of special issues and open-access articles, which will allow it to set an agenda and attract contributors. For instance, the recent edition on Robert Owen drew papers from “different generations of Owen scholars”.

This year, the journal will revisit co-op education with an edition to be edited by Cilla Ross and Malcolm Noble; in 2025 and beyond it will look at the Woodcraft Folk Centenary, worker co-ops and concern for community, and co-op futures in China.

In terms of supporting the movement, Mangan said the journal supports the co-op ecosystem by backing a global network of scholars and practitioners, including early-career researchers, and also wants to tackle the “invisibility of co-ops in the mainstream media”.

Next, India’s secondary co-ops came under the microscope with a presentation of researcxh from Lakshmi Jayan, of Sree Narayana College, India.

Their project, the Entrepreneurial ecosystem approach of secondary co-operatives in agricultural infrastructural financing, looks at the state of Kerala, where there are 12,000 functioning co-ops, mainly working in agriculture, which benefit from state support as well as the Kerala Co-op Bank, established in 1914 and restructured in 2019.

Jayan said the study looks at how the Sustainable Development Goals (SDGS) are being delivered by co-ops, with a focus on gender equality, deprived people and youth.

“Co-ops are doing it – but they don’t know they are contributing to the SDGs,” she said, arguing that sustainable development comes naturally to co-ops. However, there is a low level of satisfaction with the structure of the bank relating to green finance.

She also found that to create a suitable entrepreneurial ecosystem, co-ops need a culture of collaboration, education and funding, and problems with legislation need to be identified and fixed.

Kerala’s state legislation was also discussed as case study for how co-ops can use generative AI, with a presentation from Abilash Unny of PWC UK. He said AI can be used to summarise large documents, run chat bots and translate languages, all of which can help co-ops as long as they bear in mind the flaws of the tech, such as its capacity to hallucinate false information. 

Unny had his AI programme read Kerala’s Cooperative Societies Act, as well as a UN report on the state’s co-op sector, and asked the AI to suggest ways to improve conditions for co-ops.

“It’s an example of how it can take 50% of the administrative burden out of your life,” he said.

Related: Report from last year’s UKSCS conference

Co-op policy is also the subject of research by Tony Webster, professor of history at Northumbria University, which looks at States, co-operatives and social enterprises: the design and impact of local, national and international policy on the co-operative and social/solidarity economy

Next year is the second UN International Year of Cooperatives, which will include a focus on the role of state and legal frameworks in co-op development. Webster said this is well timed, with the world facing “war, global warming, nuclear threat, the rise of the populist right, inequality and democratic deficit” and the “failings of neoliberalism coming home to roost”.

This all offers “potential for changing the way we think about the world”, he said. 

To prepare for the year, co-op research network CoRNet is running monthly sessions, held online to make participation from around the world easier, with events staggered to include different timezones. Sessions will be recorded so people can access them. 

“We want to encourage engagement from very diverse audiences,” said Webster.

The sessions will look at legal frameworks – from international to local – in which co-ops operate, and study the role of co-ops in promoting participative democracy. “It’s not just about what states can do for co-ops, but what co-ops can do for what looks around the world to be a flagging democracy. The offer a way of rebuilding that participation.”

He added: “The danger is that democracy just withers on the vine. Populism and the outrageous views it presents are based on cynicism and disillusion, and we need to rebuild engagement and encourage the understanding of complex issues.”

The tensions between populist rhetoric and complex issues have fed into the recent spate of farm protests across Europe, including Ireland. Patrick Doyle, chair of the Society for Co-operative Studies in Ireland, said: “There’s a good reason why farmers are nervous after being in the Common Agricultural Policy for so long. We need to rethink relationships between land ownership and production, consumers and producers … and have tough conversations on the climate crisis with agri co-op sector.”

Related: European agri co-ops call for solutions as farm protests continue

The co-op movement can offer ways forward, he said: either directly through environmental land initiatives like the Sligo-based Western Forestry Co-op, or through education.

Doyle was representing a group of researchers – also including Bridget Carroll, Peter Couchman and Tiziana O’Hara – who are looking at Strategic renewal: the future of cooperative education in Ireland.

The Society for Co-operative Studies in Ireland (SCSI), an all-Ireland co-op, works closely with national sector apex ICOS and with the Centre for Cooperative Studies at the University of Cork. Looking to improve education around co-ops, it has produced a series of open-access educational resources, with teacher packs and videos for primary and secondary schools.

But although the project had some government funding, the education department said it couldn’t distribute the material because it was too political. Instead SCSI had to cold-call schools or speak to teachers to get the packs into classrooms.

In wider sense, Ireland’s co-op movement needs a “strategic renewal”, warned Doyle. Credit unions are in crisis because financial regulators treat them like high street banks, and proposals for legislative change might be lost to the election cycle. 

What, he asked, is role of co-op education in this context? “We need to define co-operation through a modern lens,make it relevant to people who don’t have the insider knowledge we have.”

Doyle suggested a revival of the 19th century idea that democracy and education are intertwined. “We need to tell a co-op story about the commons and remember that ownership is central to much of what we do, and to many aspects of our lives.”

Elisavet Mantzari

Dr Elisavet Mantzari, from the Department of Accounting at the University of Birmgingham, gave an update on efforts to create a specific accounting framework for the co-op sector. 

Accounting frameworks for co-ops are fragmented, she said, with no specific formats or statement of recommended practice (SORP). In 2019, the International Cooperative Alliance passed a motion supporting the development of international co-op SORP; work towards this is starting in the UK with a view to a global rollout.

The project has drawn funding from the Economic and Social Research Council (ESRC), and a committee has been formed including academics, accountants, Ian Adderley from the Financial Conduct Authority, and Rose Marley, CEO of Co-operatives UK. They are working to identify the problems co-ops face in accounting and in communicating their accounts, and what impact this has on members and decision making. 

“We want to generate evidence that there are issues and inconsistencies in reporting, and promote change,” said Mantzari. “Accounting is important in enabling co-ops to be accountable and improve performance.”

Mainstream accounting is designed for investor-led enterprises, she added, and there is also social purpose accounting. Co-ops, on the other hand, have dual financial and social purpose, “enterprises that want to be profitable but also responsive to members and communities”, and a SORP is needed to allow for this. 

There are also specific issues such as the need need to see the divi as distributed profit rather than a cost, and whether to classify contributions of members as capital or a liability. And there are technical issues around interest on member shares.

Mantzari said there are co-ops trying to link their ethical pursuits with their financial information – by using KPIs to communicate social impact, producing information on trade with other co-ops, and giving statistics on trade with members as opposed to non-members.

Calling for input from the co-op movement, she said: “We don’t want the monologic of focus on profit and shareholders – we want an accounting model that incorporates more viewpoints and discourses, encourages participation, social change, and political engagement.”

In response, Central Co-op director Tanya Noon said: “We need evidence to back up our claims of co-op difference – we we need to include the SDGs as well as the values and principles.”

Good member communication might also help to avoid situations like the recent row over the divi at Channel Islands Co-op, she added.

Mantzari agreed, giving the example of how the SORP for the charity sector has helped make it clear how resources are allocated.

The conference ended with a presentation from Janette Hurst, lecturer in leadership, ethical, and responsible management at Sheffield Hallam University, on Sustainability worker co-operatives: getting on with sustainable development.

Hurst carried out research among worker co-op teams and found “empirical evidence using robust methodology that people in worker co-ops people have agency, flourish, have good work life, take personal meaning from work by putting their personal goals and values into practice at work – which means a lack of dilemmas and anxiety”.

As there is currently a lack of information in human resources literature on co-ops, Hurst said this evidence should be presented to HR teams to convince them of the value of the co-op values and principles. “People say ‘my work life is my life’, ‘I am happy at work’… HR people would be delighted to hear that.”

In worker co-ops, the values and principles are seen as a natural way of making work fair, said Hurst, and also fit in with sustainability.

“I didn’t find conflict in decision making,” she added. “I was expecting people to be rending their garments as they balanced financial imperatives and sustainability, and so on, but it was surprisingly harmonious.”

Worker co-ops delivered freedom and choice at individual and organisational levels, she found, but also brought responsibility – as individual, to make a living – “enough but not huge amounts” and on an organisational level. “They are more free from the conventional business paradigm but still have to play the rules of the game.”

“A worker co-op is a place to be your existential self,” she added. “Some people would find it a nightmare place to work, it’s not the only way to do business… but it’s our way.”