Austerity: Who needs it and why don’t we focus on collecting all our tax liabilities?

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Sponsored by the Scottish Co-operative Party – the inaugural Scottish Co-operators Lecture.

An increasing number of commentators, including Will Hutton, are calling for corporations to be legally required to behave more ethically – to act in the best interests of a wider collection of stakeholders and to be accountable to them.

The Co-operative Movement has argued this case for centuries and continue to press the case for more diversity of ownership across the economy and especially in financial services.

Prof Prem Sikka (Essex Business School) has been a consistent advocate of more mutual and community focussed financial services such as credit unions. He has also frequently made the point that if more of our big businesses acted like responsible citizens and carried their fair share of the tax burden then there would be no economic argument for austerity. Prof Sikka will be expanding on these themes in Glasgow on Saturday 18th April 2015 @ 12.00pm.

If you would like to participate in this critical discussion, register at info@cets.coop. Attendance is free but limited and places will be allocated on a first come basis.

McCance Lecture Theatre
University of Strathclyde
16 Richmond Street
Glasgow
G1 1XQ
Saturday 18th April 2015 @ 12.00pm

Collaboration Prize – pair up to pitch big

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Collaborating with other businesses can help you reach new markets, share resources and improve creative thinking.

Co-operative Development Scotland’s Collaboration Prize aims to encourage companies to work together and will this year be making £40,000 available for new collaborative projects.

Open to all Scotland-based companies with a collaborative idea, the competition welcomes proposals around:

  • Collaboration to gain scale in selling/buying
  • Collaboration to share resources, premises or equipment
  • Collaboration to enter new markets

Four winners will be chosen by a judging panel and will receive £5,000 cash to implement their idea as well as up to £5,000 of consultancy and additional support to set up the consortium.

The deadline for applications is Saturday 3 August, and workshops will be held through June and July for businesses to find out more.

The competition will be delivered in association with Creative Scotland, Scotland Food & Drink and the Scottish Tourism Alliance.

For further information or to apply, visit:

www.scottish-enterprise.com/cds-collaboration-prize

Community and Place – UKSCS conference

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Diarmuid

The UK Society for Co-operative Studies (UKSCS) showcased its tradition as an independent voice in the movement at its annual conference in Lincoln this past weekend (1-2 September). The theme was ‘Community and Place’ and was aptly demonstrated by our keynote speaker, CEO of Lincolnshire Co-operative Society Ursula Lidbetter. In a polished yet passionate speech, Ms Lidbetter highlighted the various ways in which the Lincolnshire Society has embedded itself within its communities throughout the county. She used an interesting term, ‘benefits stacking’, to describe these community engagement activities; through its work with community groups, the University of Lincoln, and various local suppliers, Lincolnshire Co-operative Society has created a community with strong ties and respect for the co-operative model.

The rest of the conference produced equally interesting topics, :

  • A radical and progressive education initiative in the form of the Lincoln Social Science Centre co-operative;
  • A proposal by academic Dr Rory Ridley-Duff of Sheffield Hallam University to produce a theoretical framework for understanding workforce participation in organisations, including co-operatives and social enterprises;
  • A humourous look at an interesting and comprehensive archive of co-operative material held in Bishopsgate Institute, London.

UKSCS is not an organisation that remains rooted in the past however. It has recently embarked on a radical program of modernisation and innovation, with the aim of establishing the society once more as an informed commentator on the state of the movement. Member recruitment drives, rebranding, and a modernisation its internationally renowned Journal of Co-operative Studies (enabling online access) are some of the more recent and important activities but work remains. In this matter members of the co-operative movement have a part to play.

I implore any co-operators with an interest in critiquing the current state of the movement using relevant theory and best practice to get in contact with the society through their website:

http://www.co-opstudies.org/

In the interest of fairness, I should declare that I am a (very proud) board member of this organisation.

Review of UK co-operative economy 2012

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Diarmuid

Co-operatives UK’s publication, The UK co-operative economy 2012: Alternatives to austerity, has improved year-on-year since I first got my hands on the 2009 edition. It has gradually become more detailed and interesting. It ceases simply to be a dry record of co-operative performance and has morphed into a manifesto for the co-operative ideal.

This year’s stats throw up some issues that need more analysis and debate amongst the movement:

The number of new co-operatives emerging has been increasing steadily for two years and can be attributed to the quality and quantity of co-op development being undertaken in the UK. It is no surprise that this improvement has been matched by an increased focus on the fifth co-operative principle: education, training and information. We now need to examine how we can stimulate further co-op development by identifying new education channels (university curricula and student enterprises spring to mind).

The movement has a lot of small co-operatives (65% have a turnover of <£250,000) and a stable segment of large co-operatives (12.5% have >£1,000,000). What becomes apparent is the ‘missing middle’, co-operatives that are more medium than small. This opens up debates relating to growth issues for co-ops (lack of capital, increasing divergence of business and member aims, member apathy etc).  Perhaps this ‘missing middle’ issue could be addressed by promoting the Enterprise co-op model. Many organisations have an optimum level, whether in terms of membership, revenue, market share etc. By combining through Enterprise co-ops, organisations can redefine their optimum levels and achieve scale. Mondragón and Emilia Romagna come to mind as successful examples of this strategy in action.

There are 3 times more co-op members than direct shareholders in the world. An interesting statistic but this is an average; far more interesting is the disparity between different continents. Asia/Pacific has 5 times as many co-op members than shareholders, ditto Africa. On the other hand, Europe has only twice as many members than shareholders. What are the reasons for this? A preliminary hypothesis would be that Europe is more advanced economically and so co-operatives, in their poverty reduction guise, are not needed as much. How then do we, the UK movement, promote co-ops if they are not too relevant as a poverty-reduction vehicle? One approach is to appeal to the ethical-consumer base but I believe that the greatest gains can be achieved by espousing co-ops as a more common sense approach for businesses/entrepreneurs.

£30,000 PRIZE FUND FOR BEST NEW CONSORTIUM BUSINESS IDEAS

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Co-operative Development Scotland (CDS) is offering £30,000 worth of cash and support to develop new consortium co-operatives in Scotland.

The inaugural Collaboration Prize aims to encourage businesses to consider working with others to form a new consortium co-operative. Co-operatives are collaborative vehicles that play an important role in creating globally competitive businesses. They enable employees, businesses and communities to work together to fulfil shared interests.

CDS is calling for interested parties to pitch an idea for a new consortium co-operative with up to three winning concepts each receiving a cash prize of £5,000 and a further £5,000 of support to get the business off the ground.

First Minister Alex Salmond, who has backed the initiative, said: “I am determined that the Scottish Government does everything possible to get more businesses thinking about how they can work better together, and the Collaboration Prize is a very valuable opportunity.

“I hope the new prize will stimulate new thinking.”

With a combined turnover of £4bn and employing around 28,000 people, Scotland’s 550 co-operative businesses currently play a key role in driving Scotland’s economic growth.

The deadline for entries is 31 July 2012 and winners will be announced later this year in August.

For more information about the Collaboration Prize or Co-operative Development Scotland, please visit: www.scottish-enterprise.com/cds-collaboration-prize or call 0141 951 3055.

Co-operative capitalism; Cultural Nationalism and Scraggie Aggie’s Co-op Baggie!

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I decided to take the advice of my peers and get out a bit more.  In the past few weeks I have been to a variety of events, some co-op and some general public policy.  However, it was in my more natural repose, on the couch with the remote control and a glass, that the inspiration for this blog arrived.  I was surfing and came upon “Val and Roger just Got In”.  It transpired that Roger had just got in from winning his job back at an Industrial Tribunal and Val suggested a holiday to recuperate but “….. not to the Scottish Islands.  I want to go somewhere where they have restaurants and not just a co-op”.  I regarded this as a nice little piece of observational humour and a pat on the back for the Community Retailing Network CRN in supporting isolated communities.   (I have subsequently been informed that Dawn French (Val) is a supporter of things co-operative and the mention of an off screen character called Pauline Green did make me wonder).   Many of the community co-op members of CRN have been operating for over 30 years and one of them featured in the BBC Series “An Island Parish” (Eriskay, if memory serves) along with local character Scraggie Aggie who has featured with her green Co-op Food “Bag for Life” scavenging for crustaceans at low tide and delivering a hand knitted pullover to the parish priest.  I have previously blogged about coops being referenced in contemporary literature and film but it is heartening to see it continue in the UN International Year of the Co-operative.  There is even a film being made about the Rochdale Pioneers (talk about history repeating itself, not only did Fenwick beat them to title of first ever co-op but also produced their own short drama piece on DVD last year!).  It appears that co-ops are becoming part of the message.

So if we are making some headway in raising awareness of co-operation amongst the general populace can we expect to make the leap to “Co-operative Capitalism”   I can see the general concept gaining credence as a response to “Big Society” (or “co-operation for slow learners” as suggested by Dave Scott) but it implies that we are part of the existing system rather than an alternative, an acceptable face of how to compete ethically within markets.  In terms of the co-operative business model that is fine but, in my limited reading on the subject so far, it doesn’t really get to grips with co-operation as a social movement, with co-operation as a value system or a different way of organising society.  As a trained economist my main concern would be that it doesn’t really tackle the neo-classical model of rational economic man.  There is a growing school of behavioural economics and others who are making the point that co-operation is just as, if not more, natural than competition.  I am delighted to confirm that we have Dr Matt Bell – the Meerkat Man – speaking on this very topic at two IYOC events this year (Aberdeen in may and New Lanark in June).

Finally, I was at a discussion on the need for a constitution for Scotland (in the event that there was a vote for independence?).  I made the point that the Co-operative movement has more constitutions, more discussions on constitutions and more experience in this field than anybody else.  I also argued that when you need to fall back on written constitutions it generally means the culture has broken down.  At their most basic co-operatives only work when there is mutual self interest, a common objective which is not achievable individually but is collectively – the Co-operative Donkeys.  So I have to confess the design of a constitution for an independent Scotland when there is no visible support for the latter does seem an inefficient use of our scarce time.  However, it did set me thinking that independence/devo max wouldn’t really change much in terms of business models in the Global economy.  MacDonalds, Vodafone, Shell, HSBC et al would still sell their services in an independent Scotland.  Most of the profit would still be exported.  So the UK wide co-operatives, mutuals and employee owned businesses would still continue with some minor restructuring in recognition of different tax regimes.  Who knows, it might even end up be beneficial for the Co-op Group to re-locate from Manchester to Fenwick for favourable tax treatment!

Fairly hypothetical, especially if one debates the independence issue solely from an economics perspective.  If one considers the concept of cultural nationalism however the party loyalties and economics tend to get lost and that does take us into the unknown.  The economists might deride this as emotional and irrational.  Maybe but that takes us back to simply accepting that we only make decisions based on perceived economic  outcomes.  I suspect there is a huge middle ground as yet undecided on independence or devo max or whether to make that decision on social, cultural or economic grounds or some combination thereof

The First Minister is known as a betting man but at this stage I would be as likely to correctly guess the contents of Scraggie Aggie’s Co-op Baggie in any future series of “An Island Parish” as the outcome of a referendum.  And I don’t see the First Minister putting his shirt on a runner he isn’t convinced will win.

Scottish parliament launch of Year of Co-op

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Diarmuid

On 9 February 2012, the UN International Year of Co-operatives (IYC) was launched at the magnificent (and slightly odd) Scottish Parliament building in Edinburgh. Organised by the Holyrood cross-party parliamentary group on co-operatives, it was an event designed to showcase the political support for the co-operative movement in Scotland and provide an opportunity for co-operators across all sectors to meet and greet.

I am aware that I am biased but I must say that the quality of the event was superb; well-respected speakers (including finance minister John Swinney, who spoke with authority and passion on the role of co-ops in his constituency) and hardy exhibitionists co-operated to create an enjoyable and dynamic atmosphere. For CETS, it was an opportunity to showcase some of our most recent work (a couple of launch dates in the pipeline – we’ll keep you posted) and gain valuable feedback and contacts. Rather than try (and fail) to fully describe the tone and content of the event, I will let the excellent video produced by Glasgow’s own mediaco-op tell the tale.

The Big Society, mutually employee owned, John Lewis style, social enterprise public service delivery vehicle!

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It has been rather a strange month or so for the co-ops, mutuals and employee owned sector.  And education.

 First we had the news that Central Surrey Health (CHS) , held up as the employee owned model to create the Big Society, had not succeeded in the tendering processes for other parts of the Surrey NHS.  This brought forth claims of unequal playing fields and too much emphasis on financial costs at the expense of social benefit.  Then we learn that Circle, again a company who describe themselves as an employee owned social enterprise (can someone tell me what that is along with an employee owned mutual) were successful in securing a hospital contract and £40M of debt.  (Maybe someone should inform the board of Glasgow Rangers FC about this organisation which is willing to shoulder massive debts, just in case they lose their tax tribunal with HMRC).  The coalition were adamant this was not a privatisation but the media invariably referred to Circle as a private concern with no reference to the employee involvement or Big Society (Haven’t read the Guardian yet)  So we have a flagship “Big Society” business losing out and an employee owned privatisation (or not) succeeding.  Confused?  You should be! 

 To add to my confused state of mind, I then encounter the news that the NAHT has balloted its members and found them in favour of strike action.  The first time in their 100 or so year’s history.  Their spokesperson suggests that this is an indication of how dire the economic situation is but I can’t help thinking how you could be a trade union for over 100 years and never have considered strike action!  Did they miss the Great Depression and the 1970s?  Again, much of the media coverage focussed on the disruption to parents child minding needs, presumably because they perceive education as much of a child minding service as an investment in society?

 Next up to highlight the confusion and unrest in the public sector we had students marching against fees.  As someone who had their university tuition fees paid plus an enhanced grant as a mature student I am wholly supportive.  When are we going to accept the fact that education is necessary investment in our younger citizens and not a cost to be minimised.  Yes, we have decisions to make with limited resources about where we incur public expenditure.  We had them before the greedy bankers blew a hole in our PSBR – it’s called economics, deciding the best use for scarce resources and recognising that if you spend on one item , you can’t spend on lots of other things (opportunity cost).  Surely, investing in our future workforce and citizenry is a fairly basic concept in any civilised, modern democracy.  Instead we are trying to create a market in education services.  I have said before and will keep saying, if I am being asked to buy a degree at £36.000 then I will be demanding (yes, in a market economy the customer is always right and his demands have to be satisfied) a first class honours.

 So, are we on the road to a new Big Society or are we simply looking to reduce the role of the state. 

Are we as confused as the US Republican presidential candidate who was most certainly for reducing government but couldn’t, despite some very helpful prompts from competitors and the audience, decide exactly which parts he wanted to cut.  Does the creation of a public sector as commissioning agent rather than the delivery mechanism fundamentally change a national health or education service so long as it continues to provide on a basis of need and not an ability to pay.  If it is on the basis of need, does it matter who delivers as long as the quality is assured and value for money is achieved.  But what about wider social benefits, which brings us back to Central Surrey Health and level playing fields.

 I have come across a couple of academic papers in the past week making the point that when we try to measure the performance of co-ops with traditional scientific management tools they don’t necessarily come out looking too good in comparison to investor driven models.  Co-operatives are not profit maximising, rational economic entities.  Until we get government and society to stop measuring everything in monetary terms and start recognising and accounting for wider social benefits then we will remain stuck in the mind blowingly confused state highlighted above.

 If Big Society is simply about motivating employees to be more productive then it totally misses the point.  If those who advocate public sector delivery can’t take on board the need to be more efficient with our scarce resources then we are in danger of doing a Berlusconi on our economy.  We need, more than ever, to get across the message that co-operatives understand the need to be viable and efficient but at the same time recognise the need to consider social and community objectives.  There is an opportunity cost in pursuing social goals, in terms of reduced profitability but there is also the need to generate surplus to support the pursuit of those social goals.  That’s a balancing act the co-operative sector has always had to perform.  Let’s hope government and the rest of our society can finally get their heads round that and we get to the point where I could have headed this piece “The Co-operative Option” and it would have been clearly understood.

Start Guy Fawkes day with a sparkle(r!)

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Morag

5th November is a date I’m looking forward to – not because of fireworks but because it is the next Enterprising Practitioners Network meeting to be held in the Young Enterprise Offices in Glasgow.

Of course I am not ruling out some sort of sparks flying as the attendees at these events are inclined to say what they think and are happy to have strong opinions – one of the main reasons I enjoy this group! You can join in the conversation on Linked in at The Enterprise Practitioners Association Group on twitter @EPAScot.

The inaugural EPA meeting was held on the 27th August, in the Scotmid headquarters at Newbridge – accommodation and great lunch provided for around 50 attendees by them too! The theme of the event, of course, was co-operatives! David Erdal came along to offer his insights into employee ownership and explore how this can give people a stake in the organisation that can in turn create a more sustainable and fairer business models.Having been to Mondragon recently, (see previous blog) I now  also have a much better understanding of the value of employee ownership too. I would thoroughly recommend a visit to the Basque Region of Spain to see for yourself how successful this model can be – and their red wine is pretty good too!

This event also boasted the Real David Cameron as one of the guest speakers and as expected, thee attendees found lots of what he said, to agree with!

Also, come along to run a workshop on how to set up and run a Young co-operative within your school – they also didn’t miss the opportunity to sell some of their excellent fairtrade products!

If the 5th of November – focus on Young Enterprise this time – proves to be half as interesting as the August meeting then you will regret not having got out of bed on a Saturday morning to come along and get involved! Start Guy Fawkes Day with a ‘bang’ – or at least a bit of a sparkle!

Notes:

Stonelaw High’s fairtrade group http://theco-operative.ethical.tv/node/180

What I Did on my Holidays or Co-ops Really Are Everywhere (Except in the Travel Sector)

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Author :Hugh

Last year I started collecting photographs of co-ops I encountered whilst on holiday, to support my oft made claim that there is virtually no where in the world where you won’t find a co-op (or mutual or employee owned operation)  The collection now ranges from a community co-op pub in the lake district (I was on holiday!) to a plumbers merchants co-op in Sicily (yes, sadly I was on another holiday); a small community based credit union on the West coast of Ireland to an AFL-CIO (trade union) credit union just round the corner from the White House (Obama’s place, not the derelict public house in Holytown).

 I have to confess to visiting Corleone, of Godfather fame, whilst in Sicily but I didn’t manage to get any photographs of the Libera Terra agricultural co-ops, created by handing over former Mafia owned land to community co-ops.  A colleague has come across their produce being sold in Palermo markets (olive oil, fruit and veg).

 Conversely, there was little glorification of the Godfather connection.  The Museum was an Anti-Mafia one and we parked in the Piazza to the Victims of The Mafia.  The Italians seem to be better than most in using co-ops for social cohesion.  In Genoa they brought warring factions from Sampdoria and Genoa football clubs together in a Type B co-op to provide the cleaning service in the communally owned stadium used by both teams.

 Whilst I continue to ramble (I did get a lot of sun on my hols), I have been reminded by some recent reviews that there are co-operative champagne houses out there and that the Co-operative Food and Waitrose do stock them.  I suspect that much of the other supermarket own label wines still come from “caves co-operatives” in France, Italy and Spain and I was delighted that several of the reds I enjoyed on holiday were from co-operatives.  There really is nothing I won’t do to support co-ops.

 Co-ops not only feature in the real world but pop up regularly in fiction.  Inspired (?) by my visit to Sicily, I have started re-reading one of the first novels to tackle the Mafia concept – “The Day of the Owl: Leonardo Sciascia (1961).  The opening scene is a young man being gunned down as he tries to board a bus to Palermo.  It soon becomes apparent that he is targeted because he is a member of the Santa Fara Building Co-operative Society and has not been showing due respect to the men of honour i.e. refusing to get involved in bungs relating to public contracts.  So even in fiction, co-ops are held up as the ethical alternative.

 In the Stieg Larsson novels (The Girl with the Dragon Tattoo etc) there are repeated references to Konsum (the Swedish food retail co-operative) and several characters are members of housing co-ops, reflecting the role of co-ops in Swedish culture.

Which does beg the question, if co-ops started in Fenwick and they are ubiquitous socially, culturally and literally speaking, then why don’t we have more of them in Scotland?

Education?

 However, the big breakthrough for my photo album will come in October, when I am taking some students over to Mondragon.  There should be co-op photo opportunities galore.

 Whilst on the topic of photo opportunities, I was on my travels again at the weekend (business, not a holiday) and was snapped, at half time in An Camanachd’s Sutherland Cup Final, with the First Minister.  The Co-op connection was the Co-operative Group Membership were sponsoring a shinty taster event for school kids; we were providing shinty starter packs for Aberdeen schools and Aberdeen University Camanachd were celebrating their 150th, which puts constituted co-ops a hundred years ahead of constituted shinty clubs.  Not to worry, we did manage to get some interest from An Camanachd in looking at co-op structures for their member clubs, so yet another possibility of co-ops springing up in new areas.

 It would seem remiss to talk about travel and not mention the future of Co-op Travel.  It would appear that the deal with Thomas Cook is back on after consideration by the Competition Commission.  There has been some disquiet about the co-op brand being used when the Group and Midlands Society only retain a minority stake.  If the alternative was simply to exit from the travel market, making lots of people redundant then I would have to say the deal with Thomas Cook not only secures employment (maybe not for all as there will be some rationalisation) and offers the co-op partners the chance to maximise the value they realise for what was a failing business.  Personally, I would have liked to have seen the Co-op Travel employees given the chance to take the business over as a worker co-operative but I’m not sure that option has permeated the senior ranks of decision makers in the movement.

 Any engagement I have had with Co-op Travel staff in Scotland has been very positive and they always struck me as get up and go types.  The Webbs still have a lot to answer for.

 Anyway, this should be the last instalment of our Summer Special, as the schools return and the CETS nose is returned to the grindstone.  At least that is what the Resident “Hiedie” tells me.

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