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

Making 2013 a great year for Co-op Education

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Diarmuid

‘What could be important in this co-operative initiative is not what is accomplished but what it is intended to do.’
– José María Arizmendiarrieta

One of the key messages of the UN 2012 Year of Co-operatives was to see the celebration not as an ending but as a beginning. We have taken that to heart at CETS and have a variety of activities, resources and projects planned for 2013 that will hopefully improve co-operative education in Scotland and the UK.

  • The first cohort of students will be completing the inaugural SQA Awards in Co-operative Studies in 2013. Offered at levels 4, 5 and 6, the qualification provides secondary students with a detailed understanding of the core historical, social and organisational topics relating to co-operatives. We are working on promoting these awards to other Scottish secondary schools in the year ahead.
  • 2012 saw the development of our interactive online resource on the Commonwealth Games. The Co-operative Games: Succeeding together is aimed at upper primary/early secondary level pupils and covers a variety of topics within the Curriculum for Excellence. We will continue to promote? this resource in the run-up to the 2014 Games.
  • We are always seeking to develop relevant, interesting learning and teaching resources on co-operatives and 2013 will continue this trend. The end of the summer will see the launch of a resource on ‘making your school co-operative’. Loudoun Academy became the first “Scottish School of Co-operation -SSC”. We are now building on our work to create the first cluster of SSC schools in Edinburgh and the first Primary SSC in Angus. We also have plans for a second resource but we’re still at the idea generation stage; any ideas/suggestions are welcome at info@cets.coop.

2013 will also be also a big year for us in relation to our work at tertiary level:

  • In co-operation with Co-operative Development Scotland (CDS), we are organising a series of screenings of the US employee ownership film, We The Owners, across 3 or 4 Scottish Universities. Open to students, academics, local business people, and co-operators, the screenings will take place during late February, early March; contact info@cets.coop if interested in attending.
  • March will see the completion of an innovative project, supported by Co-operatives UK, to establish a co-operative providing employment to students from a Scottish university. Student-owned and led, the new co-operative will be launched in late March and will be based on a successful model from Mondragón Corporation in the Basque Country.
  • Finally, work continues, thanks to the support of CDS, on disseminating the outputs of a recent Knowledge Transfer Partnership project between CETS and the University of Aberdeen. These outputs include an academic textbook, a collection of essays, an entrepreneurship guide for students/graduates, and a virtual learning environment. We are also delivering a series of lectures across Scottish universities, in particular with the University of the West of Scotland.

What co-ops mean to kids

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CETS and the Clydebank Co-op have been working in partnership with Kilbowie Primary to look at the Co-operative Values and Principles and put them into child friendly language. The resulting pop-ups and poster will be displayed in Kilbowie Primary and Clydebank Co-op, to promote understanding of the benefits of the co-operative business model and encourage people to join their local co-op.

Kilbowie Co-op Poster

Poster created by Kilbowie Primary pupils on what co-ops mean to them

A Celebration of Co-operation – New Lanark 14/06/2012

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Carlogie Primary pupils discuss their fairtrade café

Carlogie Primary pupils discuss their fairtrade café

Over 100 kids, 8 workshops, 5 speakers, and an awards ceremony; the madness that was our annual event is now over. Set in the New Lanark World Heritage Centre, home to Robert Owen’s social initiatives, we were joined by over 100 educators, students, practitioners and co-operators to celebrate co-operative education in Scotland. It quickly became apparent that co-operative education takes many forms, including:

  • A pupil-run fairtrade co-operative serving up delicious treats to primary students;
  • A young co-operative that donates its profits to an impoverished school in South Africa;
  • A cohort of pupils successfully completing ASDAN awards in Co-operative Studies; and
  • A secondary-school in Ayrshire working towards becoming a ‘co-operative school’ (see Peter Flood’s presentation below).

We made some attempt to organise the chaos: pupils were assigned workshops depending on their age, and the adults in attendance were treated to a series of interesting, informative (and occasionally controversial!) talks. This ensured that there was ‘something for everyone’ at the event and kept the wee (and not so wee) ones engaged throughout the day.

Pupil workshops

Presentations

Nick Morgan, Education Scotland – Developing Global Citizens

David Cameron – Co-operatives and Co-operation in Scottish Education

Alan Wilkins, CLADA – A Learning Philosophy

Peter Flood, Loudon Academy – A Scottish School of Co-operation

Stonelaw High Fairtraders – The South African Connection

Ashley Simpson, Reddish Vale Co-operative Graduate also spoke of his experience of attending the UK’s first co-operative trust school.

Our sincere thanks to all who attended and supported the event (especially the volunteers from Robert Owen House in Glasgow) and, after a well-deserved break, we’ll have an eye on next year soon enough.

(There are some photographs of the event that can be viewed on our Flickr account; if anybody who attended has some pictures that they wish to share then please email us at info@cets.coop).

£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.

The full package: CETS newest resource aimed at higher education

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Diarmuid

The culmination of  a two-year collaborative project with the University of Aberdeen, today CETS launched its newest resource, its first foray into higher education: Democratic Enterprise: Ethical business for the 21st century.Here’s the description of the text:

The United Nations has declared 2012 to be the International Year of Co-operatives in recognition of the impact that co-operative enterprise has on more than three billion people across the globe. Co-operatives contribute to national and local economies in virtually every country by championing an ethical approach to business underpinned by internationally agreed values and principles. Yet despite the wide-ranging successes of co-operatives, in financial terms as well as in the development of sustainable communities, the study of these democratic forms of enterprise remains surprisingly absent from the curricula of most university business schools around the world.

Designed primarily for undergraduate students, Democratic Enterprise provides an introductory-level analysis of democratic models of enterprise, namely cooperatives and employee-owned businesses. A supplement to any course that deals with these topics, it also stands alone as a template for academics who wish to incorporate material on democratic models of enterprise into courses relating to economics, business studies, sustainable development, enterprise, and organisational theory and behaviour.

The book is free to download and can be accessed here:

http://www.abdn.ac.uk/cets/resources/democratic-enterprise

With our new primary resource and the approval of SQA qualifications in Co-operative Studies, we have provided a pathway or educational journey for students interested in co-operatives, one that starts in the Curriculum for Excellence and culminates in higher education.

Young Co-operatives – Fairlogie Café

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Morag

Do you know how to set up and run a successful Fairtrade Café? If not, but you would like to, get in touch with the P6 class at Carlogie Primary in Carnoustie and they will be delighted to help you!  Over the last few months they have been planning the opening of their monthly fairtrade café.  The first very successful morning was held on the 23rd November, in the local church hall.

I arrived to be greeted and escorted around by a group of very enthusiastic and knowledgeable young people who delivered me into the capable hands of tea and coffee makers, who then engaged me in conversation around the merits of their fairtrade products. They were unfazed by doing mental calculation to give me my change after I had been persuaded to buy other attractive fairtrade products from another stall!

Their easy, relaxed and informed manner created a warm happy atmosphere for all their customers – I counted at least 60 –who arrived from all over their community to support them. Asking the minister to announce their enterprise from his pulpit on the preceding Sunday was obviously also a very good marketing ploy!

At the co-op, we are always trying to explain clearly what our values and principles are – looking at the student’s interpretation of them, perhaps we can learn how to apply them more easily through children’s eyes.

Fairlogie Cafe values

Fairlogie Cafe principles

I also have to mention, for teachers benefit, that to my mind this is a really good example of how to “do” Curriculum for Excellence. There was evidence of true interdisciplinary learning – listening and talking, writing, numeracy, health and well-being for starters, as well as showing how to put the four capacities into action. If you want to see this all happening for yourself – go along to their next Fairtade Café event at Panbride Church Hall, Newton Church, Arbroath Road, Carnoustie, 10am-11.30 on Wednesday 14th December. Remember to take plenty of cash as their excellent sales team will persuade you to buy lots of their excellent products specially selected for Christmas.

There – they have now managed to get me to do some marketing for them as well!

The four pillars of co-operation (Mondragón style)

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Continuing our reflection on our trip to Mondragón to see one of the largest worker co-operative systems in the world, Diarmuid discusses the four pillars driving the development of this great industrial democracy experiment.

Many co-operators will be aware of the Mondragón Co-operative Corporation (MCC) structure, as well as its principles derived from those developed by the Rochdale Pioneers. What might not be known are the pillars providing the foundation for MCC; these pillars reflect where MCC has come from, the challenges it currently faces, and the direction it wishes to drive the organisation in the future. The four pillars are education, social welfare, finance, and research & innovation.

Education
The worker co-operative movement that originated in the Basque town of Mondragón was driven by a need to create sustainable employment in an area that suffered greatly during the Spanish civil war. Mondragón is much more than employment however; it is an educational movement, an experiment in social and industrial democracy. As Father Arizmendi once said,

It has been said that cooperativism is an economic movement that uses the methods of education… (it can) be modified to affirm that cooperativism is an educational movement that uses the methods of economics.

MCC holds the educational ideal of Father Arizmendi close to its heart and education is built into many of the functions of the group, be it the development of Mondragón University, member training and development or the many study visits it facilitates in order to educate the wider co-operative movement on its structure.

Social welfare
One of MCC’s core objectives is provide sustainable employment for its members. To this end, MCC places great importance on the social welfare needs of members and their families. Spanish law recognises members of worker co-operatives as self-employed, placing them in a vulnerable position. MCC created Lagun Aro, an insurance and pensions co-operative, to look after the social welfare needs of members. 26% of every member’s gross salary goes to Lagun Aro, of which 18% goes to their pension, 6% to the health fund, and 2% to the employment fund. This is supplementary to the 2% of gross profit that every Mondragón co-operative contributes to a solidarity fund to help pay the wages of members when they are ill or not working.

Finance
Finance is always a concern for co-operatives of all types: sourcing, managing and increasing capital requires innovative solutions. MCC recognises the importance of this and has a number of procedures in place to ensure their co-operatives are adequately financed. Firstly, the Caja Laboral (co-operative bank) plays a central role in supporting the establishment and maintenance of a co-operative. Secondly, MCC facilitates the transfer of loans between one co-operative and another. At firm level, MCC rules stipulate that 45% of a co-op’s net profit is to be allocated to reserves; even the 45% that is give to members is retained in the business in individual capital accounts.

Research and innovation
Mondragón’s great industrial experiment would not exist today if it weren’t for the emphasis placed on research and innovation, both in terms of product development and support institutions. MCC currently has 14 research centres supporting the 120 or so worker co-operatives in the group to develop new products/services. It is through this innovation that the future of the group is secured; new technologies give birth to new products and co-operatives, helping to replace declining industries with ones in their infancy.

These four pillars support MCC’s continued success, both from a business and co-operation perspective. They give rise to the practical implementation of MCC’s principles, support its structure and facilitate the achievement of future objectives.

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

Co-operative innovation: lessons from the Basque country

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Diarmuid, Hugh and Morag from the Co-operative Education Trust Scotland, as well as three students from the Scottish Agricultural College, visited the Basque country in Northern Spain to research co-operative models of enterprise. For the next week, we will publish a series of blogs on our experiences. In this post, Diarmuid outlines some of the ways in which the Basque co-operatives have developed innovative solutions to meet member needs.

A trip to visit the co-operatives of the Basque country, in particular the Mondragón Co-operative Corporation, is quite a popular excursion for global co-operators; Mondragón itself facilitated over 5000 visitors in 2010. Rather than recount the details of these co-operatives (much better examples exist – see the notes at the end of the article), I will share the most important insight I derived from the trip: the willingness to innovate to meet member needs.

1. Dealing with the downturn

While co-operatives have dealt with the current economic crisis better than other models of enterprise, they haven’t been immune to its effects. Mondragón has attempted to negate some of the worst effects by implementing measures aimed at protecting member interests. Some of the measures they take include withholding the 7.5% dividend paid on members’ capital accounts; reducing the working week to four days; letting non-member workers go; and relocating members from poorly performing co-ops to ones that are not in financial difficulty. These range of measures are designed to protect employment levels amongst members and to dilute the amount of risk borne by any one member or co-operative.

2. Getting capital onside

Day three of our trip took us outside of Mondragón to a potato processor, Udapa. Udapa is a secondary co-operative consisting of three member classes: a producer co-operative, a worker co-operative, and a credit union. Now, there is nothing hugely innovative about secondary co-operatives but I was intrigued by the role the credit union played; I just couldn’t figure out the need the secondary co-operative solved in terms of the credit union. It turns out that the credit union’s role is central to the financial stability of the co-operative: as well as contributing 20% of the capital requirements of the co-operative, the credit union forgoes its claim of the surplus in return for the co-operative conducting its banking with it. Udapa’s financial support might just be replicable here in the UK and could significantly increase the probability of smaller co-operatives surviving and subsequently prospering.

3. Involving multiple stakeholders

Following on from the previous innovation, the Mondragón co-operatives are particularly adept at productively managing multiple member classes. Take Eroski, the equivalent of the Co-operative Group. It successfully balances the needs of worker and consumer members to operate a multi-billion euro business. Representation on the board is equal: 6 worker-members and 6 consumer members. The co-operative bank, the Caja Laboral Popular, is no different: the needs of its co-operative members are balanced with those of the bank’s workers. In this case, representation is weighted 8:4 in favour of co-operative members but the result is the same i.e. a highly successful enterprise. And finally, Mondragón University is a secondary co-operative whose members are the different faculties, who in turn have three member classes: students, lecturers and collaborative partners (local businesses, authorities, community organisations). Co-operative practitioners and scholars will be aware of the challenges associated with operating a hybrid co-operative but the Mondragón experience, while not offering an off-the-shelf solution, could possibly offer a way of galvanising the disparate consumer and worker movements here in the UK.

Many co-operators consider the Mondragón co-operatives to be one of the best examples of a co-operative network in the world. They are not without their problems though. The key for the UK movement is to analyse its strengths (a well established consumer movement and an increasing presence in local communities) but look to the lessons from Mondragón to help address some its weaknesses (a divide between the consumer and worker movements, insufficient support structures for new and established co-ops). With the 2012 Year of the Co-operative fast approaching, now is the time for the UK movement to draw inspiration from Mondragón and instigate its own program of innovation.

Notes:

http://www.solidarityeconomy.net/2011/03/16/mondragon-as-a-bridge-to-a-new-socialism/ contains details of some of the great pieces of work that discuss Mondragón. Have a look at the work of Oakeshott, Ellerman and Whyte for further analysis also.

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