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 Attendance is free but limited and places will be allocated on a first come basis.

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

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: 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.

Updated Summer Update

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Author: Hugh

Traditionally it is a quiet time for us here at CETS but that hasn’t stopped me taking the easy option of combining my turn to blog with a newsletter for general consumption. 


Young Co-operative Enterprise

 There are two major strands of our efforts in this field which will take major strides forward when the Scottish schools return in August.

ASDAN Awards through Co-operative Studies 

Supported by the Co-operative Group Scottish Values and Principles Committee, we will be working with several secondary schools (Loudoun Academy, Alva Academy, Jedburgh Grammar, Broxburn Academy, Armadale Academy, Whitburn Academy and All Saints Secondary) to ensure that nearly 200 Scottish pupils will achieve ASDAN Enterprise and/or COPE accreditation through Co-operative Studies.  This will be a major advance in our primary objective of imbedding co-operative values and principles into the Scottish education system.

Young Co-operatives

We have often highlighted the excellent work done by longstanding Young Co-ops at Hillpark and Stonelaw and we are hoping to see a new wave as we engage with Govan High, Hillhead Secondary and Whitehills Primary (Forfar) to develop their co-operative business models.

We also had a highly successful 2 day Co-operative Enterprise Awareness Session at St Paul’s Dundee where 40 pupils investigated the potential for creating Young Co-ops.  This event was run in conjunction with Dynamix, the Bristol based worker co-op.

SQA Qualifications

As stated above, our main objective is to imbed co-operative values and principles and the co-operative model of enterprise into the Scottish education system.  The ongoing implementation of Curriculum for Excellence is starting to offer opportunities in this field.  We instigated discussions with the SQA over a year ago and it now seems that our message is getting through, that co-operatives as a context for learning are an effective way to achieve the outcomes laid down with Curriculum for Excellence. 

The SQA have themselves proposed the creation of an award in Fair Trade/Ethical trading which will sit nicely alongside our proposed award in Co-operative Studies, again supported by CG Scottish Membership V & P.  We are also awaiting a response from the Education Minister on his proposal for a new award in Scottish Studies and our suggestion that Co-operative Studies should be an integral part of any such award.

Hopscotch Theatre

Hopscotch has been involved in some excellent pieces of drama aimed at raising awareness amongst young people about the democratic system and trade justice.  We are currently working with them to take to our ASDAN schools (as above) a drama workshop which will introduce them to the concept of democratically owned and controlled businesses.

Summer Events

Working with CG Membership we have agreed to sponsor (through the Cammanachd Association) the supply of three “First Shinty” kits for use in primary and secondary schools throughout the City of Aberdeen.  The kits will be handed over at half time in the Aberdein Considine Sutherland Cup Final at Aberdeen University’s King’s Fields on Saturday 30th July 2011.

Again, we will be hosting a short workshop on co-ops at the Belladrum Festival, alongside the “Verb Garden” when the Co-operative Group Scotland & NI Board will be joining the festivities.

Scotmid are hosting an Enterprising Practitioners event in August at Hillwood House.  This group of schools enterprise development officers came together under Determined to Succeed but not have to look at those co-operative virtues of self help and self sufficiency if they are to continue functioning.  The Scotmid session will be used to explore a co-operative model as well as further progressing their knowledge and understanding of co-operative enterprise.

They will also be able to hear how co-operative business engagement is enabling pupils at Craigmount High to work towards Intermediate Retailing Awards with support from Stevenson College, Scotmid and CETS.

Learning and Teaching Resources   

In our 2009/11 funding application to CG Social Goals, we forecast we would get over 1500 of our various resource packs into 750 schools.  With over 6 months still to run, we have surpassed those targets by at least 10%.

We are now working on a new “Co-operative Food Chain” resource with financial and technical support from SAOS.  There are many existing resources out there and it has been noted that the majority of co-operative activity in the UK still centres on food in some shape or form.

 This will be an online option which highlights the co-operative option at every stage of the cycle – food production, food retail and distribution and through to food waste and re-cycling/renewable energy.  This resource will be launched early in the next school year.

Year of the Co-operative 2012

 The aforementioned support from CG Scottish Values & Principles is intended to culminate with the launch of the new SQA Awards and the graduation of the 200 ASDAN Young Co-operators.  It will obviously be our intention to showcase these at a major event in 2012.  Once we are clear of the overall Scottish programme of events we will announce more detail.  It would be our intention to aim for June 2012.

Some of you might have noticed that we are engaging with schools (Govan and Loudoun, including Fenwick Primary) which can lay claim to pre-Rochdale co-ops within their catchment areas.  We have also approached schools in Brechin (1832) and Lennoxtown (1812) to see if we can develop a co-operative co-op history project, highlighting the Scottish contribution to the global phenomenon that is the International Co-operative Economy being celebrated by the UN. (A point we made in our communication to the Scottish Education Minister).  Watch this space!

Higher Education

 We are now at the halfway point in our Knowledge Transfer Partnership with the University of Aberdeen and the first learning and teaching resources should be available for the new university academic year.  This work has resulted in a grouping of co-operative academics working together and after an initial CETS presentation to the UK Society for Co-operative Studies Annual Conference 2010, there was a fringe meeting at Congress to progress the idea of a Co-operative University and Business School.

The Mondragon co-ops in the Basque Country already have their own university and CETS, with support from CDS, will be sending 3 students from the Scottish Agricultural College over on a study tour in early October.  The students won the CETS/CDS essay competition with a business plan for a farm forestry co-op.

Instantaneous Democracy

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As a registered charity it is not our place to comment directly  on the results of the Holyrood election or the party politics involved.  However, as an organisation promoting democratic forms of enterprise, I think we can safely make some observations on the processes and structures of said democratic process.

I have to declare an interest relating to the first point.  My daughter, a 3rd year politics student, now finds herself out of paid employment.  She worked one day a week with our local constituency MSP and he lost the tightest first past the post (FPTP) seat on SEVEN votes.  On the one hand you might see that as good for democracy that any seat is so tightly contested.  If you are a supporter of proportional representation you might think it highlights the inherent unfairness of FPTP that if such tight results were replicated in every constituency then you could collect 40-50% of the popular vote but no seats.  An impossibility many would argue but then we were told, until the early hours of Friday, it was impossible for any one party to gain an outright majority at Holyrood .

It might also be noted that there was a tactical option of standing on both constituency and regional lists.  There seems to me a certain irony, possibly even hypocrisy, to resort to a form of PR to gain a seat in our parliament whilst arguing against PR in principle.  I can’t give any specifics but on the law of probabilities?

Similarly, proponents of PR would suggest that it can’t be fair for public policy for the next 5 years to be shaped by the views of only 25% of the population i.e. 50% share on a 50% turnout (very roughly).  However, the attempt to redress that imbalance with a move to AV (albeit in Westminster) was resoundingly defeated. 

On a similar vein, my brief viewing of results coming in on Friday morning failed to identify any FPTP winners whose votes exceeded the combined total of their opponents, which obviously goes to the core of the additional vote (AV) argument.

It has also been noted that the Westminster FPTP system is the one which needed a negotiated coalition whilst the Holyrood system, supposedly custom designed with its own form of PR to prevent an SNP majority, has produced just that form of strong majority government that only FPTP can produce, according to its adherents.

The main issue from our perspective, of arguing the case for democratic forms of enterprise, is about the quality and levels of participation.  There are lots of different ways of creating a democratic co-operative structure (IPS, guarantee company, CIC and many variations within each) and there are a variety of ways of deciding who runs the country (FPTP, PR, AV, STV and combinations thereof) but if people don’t get off their backsides and get involved then nothing much is likely to change.

The aforementioned politics student who squats on my premises has pointed out that there are other ways of engaging in politics other than voting in elections.  Volunteering, community action, co-ops and stand alone campaigns.  There was somebody in the Westminster elections who suggested we needed a new form of politics and there are signs of significant, seismic changes on the political landscape.  However none of them seem to address the fairly fundamental issue of how do you, and how can you claim, to represent people who don’t engage with whatever system you adopt.

Whether you agree with AV or not, it is quite depressing from an educational perspective to see the credence given to the argument that it was too complicated for the majority of the population to understand.  Maybe we should learn from the X Factor and all those reality shows that consistently achieve such impressive voting turnouts and move to a system of rolling referendums on any number of topics and people can vote from the comfort of their own homes, cars wherever and whenever – is that the new high tech future with Simon Cowell and Lord Sugar competing to be the Presiding Officers in our instantaneous democracy?

How does a Garden of Eden grow?

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Author: Morag

Having heard Tim Smit speak at an event at Paisley Abbey a couple of years ago, organized by the scottish social enterprise coalition I jumped at the chance of their organized study tour to the legendary Eden Project in Cornwall. Throw in a gourmet dinner at Fifteen Cornwall and I even offered to pay for the visit myself and take annual leave! Having an insightful and generous director…. (any chance of a pay rise this year?!) , meant neither sacrifices were required and I happily left home at 6am to begin the journey to the Garden of Eden.

The aim of my visit – apart from the obvious sensory enjoyment- was to see how really successful social enterprises work and what CETS can learn from them.  Eden and Fifteencornwall are businesses, for money making purposes as well as social good, quite different from a general perception that they are some sort of charity funded partly by token selling of questionable quality goods and services but mostly by government grants, or by you and me through donations to a noisy tin can.

No tin can mentality evident at Eden – any lurking tin can would have been recycled into a pair of earrings or used in an “educational” sculpture.

The first impression of Eden is surprise. Initially that such a huge project was undertaken in such a remote area, and then wonder, at the energy and imagination the development and sustainability of such a site required.  Listening to Tim made me realize why Eden has now managed to survive to celebrate its 10th birthday! Finding out how he secured the funding for this project included needing nerves of steel and perhaps distinct criminal tendencies! In another life with a less supportive family, perhaps his type of character would have become a notorious Robin Hood style gangster or a benign dictator? The traits are the same but the impact on society is different. Fortunately for Cornwall, whatever Tim’s start in life was, he ended up doing remarkable things, for the good. This was evident in the way he talked enthusiastically, with humor and often digressed then meandered back to various points, almost as if he has given his brain the same freedom of expression as he gives his staff!  However, as with the Eden employees – it was always the same message – “Put your whole self into whatever you are doing, take the risks and responsibility with no negativity!” His passion for giving people autonomy to do, and be the best they can, is quite inspiring.

This is what I believe Eden is about:  self-motivation and self-determination to create a better “world” (macro, micro, or bio) and enjoy the process.  The emphasis is on something tangible, not theoretical, something that “is” in a practical way, and something that you can “do”. In a modern “virtual” world it seems we need an antidote to living solely in “the cloud” and people like making and creating stuff.

The result- an economically viable social enterprise!

On my return from this visit I was delighted to read that Stonelaw High’s Young Co-operative had won the Young Social Entrepreneurs of the year at a star studded event in London – congratulations to them. They have been involved in this project for over 5 years now  – have a look at – now their turnover has exceeded £150K proving that this co-operative business model is profitable and works! All they needed was a small start up grant from CETS five years ago (though my Christmas shopping sprees at their annual fayres, have no doubt boosted their profits significantly!) and the resulting success of the venture came from the students motivation and engagement with the business. I do here have to recognize that their “lead” teacher, Isabel Gilchrist, displays many similarities to Tim Smit  – loads of enthusiasm, energy, commitment and belief in the people around her to do a good job.

I’m beginning to see a pattern here….. good leaders with good social goals, who believe in their “crew”…… can achieve anything they really want? If Eden have such belief in their crew and ask them to accept risk and responsibility then the next obvious step is to share ownership with them, so why hasn’t Tim developed it into a co-op, like the young people at Stonelaw?  The “buy in” from the crew could give it even more longevity with potential to grow a democratic Cornwall, along the line of Mondragon ?

Since this was a funded study tour, I needed to explore what benefits my visit will have for the work that CETS does? In order to do this I needed to ask myself a number of questions:

1. What is my job, and what do CETS do?

Not having had a job description for sometime has been very liberating but it is also much more challenging. Where to start and how to choose what to do?! Having distilled my job down to a concept rather than a series of activities: my Mission (should I choose to take it) appears to be “to enlighten and encourage the Scottish youth to understand and apply the values and principles of the Co-operative movement to their life and work” Without sounding like a 19th century free Presbyterian minister from the Western Isles, that could be quite tricky and possibly fairly off putting to Scottish young people! How to make this concept fun and engaging for students and acreditable for teachers would be a success criterion! A visit to Eden and Fifteen was certainly fun and engaging, how to make “exams” in this area meaningful and worthwhile is difficult and quite frankly, I think, pointless…….. So what to do?

2.What have I learned from my visit?

  • Do what you are good at doing and enjoy it.
  • People need practical outcomes, something tangible to make them feel engaged, useful and alive and consequently valued. (See earlier Stonelaw bit)
  • Negative people destroy everyone else’s energy
  • Follow your intuition; think big, blag if you have to and keep believing in your dream. (If you haven’t got a dream get one!)

3. How can apply what I have learned?

This is the tricky bit. Maybe you should only ever look to “self development” as all else is arrogance and vanity and eventually futile?  The only person you can ever educate is yourself, as education has to be a self-motivated and willingly participated in experience to create any change. Not a principle that all teachers can adopt I suspect, despite them being “reflective practitioners”.  The exam system and target setting agenda see to that! However, giving real life experiences such as setting up their own co-operative and running it for profit now can be accredited. We are supporting 200 young people with CoPE ASDAN accreditation.  At long last, the education system is beginning to recognize that vocational and academic skill have equal value. Young people can now do the “useful stuff” within the school day rather than having to squeeze it into lunchtimes a and after school activities,

Perhaps my visit has also allowed me to give myself (more?!) permission to do what I think is right; identifying others’ strengths, telling them what I enjoy about them and encouraging them to follow their intuitions and instincts? Ask them to think big and believe in their visions- ignore  (or sack!) the “abutters” and the “no ah canny becausers”. Sacking those individuals of course may decimate large swathes of certain sectors of the public sector, so its probably just as well I don’t have that kind of power, but I can try to ignore the naysayers and focus on working with the optimistic risk takers!

If this all works, we should see inspirational co-ops springing up in educational establishments all over Scotland. This then may show that my visit to see how to “grow” the Eden effect has been worth the investment and maybe the adults will see the wisdom of the young peoples’ ways?

You have been challenged – in a positive and optimistic way of course!

Something Better Change

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Change.  We are all subject to it but it is still the natural reaction of the majority to be resistant to change.  Conservatism with a small “c”.

I had a bit of a Eureka moment this week (stay with me, it isn’t about my bathing habits) about change in politics, economics and education.

I started reading David Erdal’s new book (Beyond the Corporation: Humanity Working) which produces sound evidence and practical examples of employee ownership confounding the predictions of neo-classical economics.  However the prevailing economic orthodoxy will not accept these facts.   This resistance is particularly acute in our business schools but also across our education system in general.

The irony of this inability to offer alternative choices in organising enterprises and the economy seems to be completely lost on these learned academics.  One of the key premises of achieving equilibrium in a perfectly competitive economy is that rational economic man makes rational choices based on perfect information provided by the market.  There seems to be a flawed logic in not even making any attempt to provide information on alternative organisational structures such as co-operatives, mutuals and employee owned enterprises and then claiming that the traditional structures achieve an optimal solution.

Erdal’s book repeatedly makes the point that the people who generally make substantial gains in business transfers are the advisors and providers of capital.  The de-mutualisation of the financial sector along with soft touch regulation led to lots of fees being earned by the City; a handful of senior bankers making a killing and you and I being left to foot the bill.  Again, the irony is that the proponents of Adam Smith’s “Invisible Hand” totally ignore the fact that he warned against greedy individuals corrupting capital markets.  Selective amnesia?

Erdal also makes the point that very often the “Invisible Hand” is invisible because it is just not there.

The key point here is that intellectually lazy civil servants, academic advisors and acquiescent politicians need to be challenged on the orthodox assumption that the market will provide the optimal solution.  It may, and sometimes does, but it is far from automatic and we need to offer alternatives.  There is a need for change.

Which leads me to the political arena.

In last year’s Westminster elections many people thought they were voting for a new approach to politics.  In the sense that we have the first UK Coalition government in the best part of a century, that’s new.  In the sense that within days of taking control the Coalition was proclaiming to be more radical than the Thatcher administration, it would appear that we are still lurching from one end of the two party system to another.

There is an interesting connection here to Erdal’s writing, in that amongst the people he cites as providing the inspiration for his conversion to employee ownership are an American corporate lawyer, who adapted the leveraged buyout, beloved of free market financiers, to creating ESOPs where the employees all shared in the wealth (we’re all capitalists now!) and a Jesuit priest who saw worker co-operatives as the antidote to fascism. (Socialism!)  Confused?  You should be but get your hands on the book and Erdal will explain it a lot more lucidly.  The point again is that something isn’t working in the best interests of the majority in our democratic society and needs to be fixed.  There is a need for change.

You might now be asking what all this has to do with education.

Curriculum for Excellence requires significant change in the way we educate our young people.  We seem to accept the need to move from a Victorian factory system  of churning out batches of awards in”the skills that are easiest to teach and test and are also the easiest to digitise, automate and outsource” to one where we enable learners to “undertake meaningful, problem-based inquiry, which might be multi-disciplinary, supported by blended teaching methods and hybrid resources”.  It’s certainly a major challenge for teachers but one we think CETS can help with.  We are supporting several schools and their pupils to attain the “Asdan –  Certificate of Personal Effectiveness through Co-operative Studies” and are confident it fits substantially within the new educational paradigm.

We offer co-ops as a context for this new learning and a way to adopt self help and self responsibility to build democratic enterprises and create a better (Big, Medium or Small) society

Change is happening in the teaching arena but I’m not sure the accreditation is keeping pace.  I have recently seen SQA proposals for qualifications in economics and business which adopt the same lazy orthodoxy of the market and offering little understanding of alternative forms of enterprise such as those showcased in David Erdal’s book.

Change can be for the good.  We have elections for Holyrood this year with the potential for change and from that might flow increased opportunities for changes in how we run the economy and how we educate our future citizens.   Co-operatives, mutuals and employee ownership can and need to be at the heart of that change for the better.  Revolutions can be bloodless although they do tend to take longer.

You need to participate to make change happen.  You need to challenge the orthodoxy, the status quo, you have to offer alternatives.

As the song says, something better change.

P.S.  Name that tune and win a copy of David Erdal’s book.  Answer to

The Importance of Democracy – Learning Resources

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Hopscotch Theatre production

“The Parliament Show”

Suitable for P1 – P7 & S1, Touring Feb – June 2011.  

I was invited to the dress rehearsal of Hopscotch’s newest production and was entertained as well as educated for the entire 55minutes! They achieved that difficult task of making “history come to life” for youngsters with humor, clever dialogue, believable characters and audience participation that was finished off with a real good sing along! Even I was reinvigorated with renewed belief in the importance of democracy, having been reminded how hard fought for my right to vote had been!

The production managed to simplify the history of the development of Scottish democracy, from serfdom, through the Darien Adventure, to the union of the Crowns, Suffragettes and back to the reconvening of the Scottish Parliament in 1999, in an engaging, high speed 55 minutes without losing the thread.  The mixture of clever writing and strong engaging characters, delivered by four enthusiastic and talented actors allowed the audience to be believably carried along with  “wee Jenny’s” transition from couldn’t care less attitude about her school visit to the Scottish Parliament to becoming an active member of her own school council.

I can thoroughly recommend this production as a great starting point to any project involving the students taking personal responsibility, such as setting up co-operative enterprises or tackling Global Citizenship. Perhaps it is particularly relevant at a time when we are seeing the peoples of the Middle East striving for democracy.  

The other as well as or an instead option is a 90minute “Drama and Democracy” workshops, which can be used at any stage in  the school. They also have great accompanying resources written to support this topic further in the classroom. At £150 the drama session looks like great value for money!

Drama Synopsis

Wee Jenny is whisked back in time during a visit to the Scottish Parliament, the ghostly figure of Purly Wilson appears and explains why participating in our representative democracy is so important…how we fought to have our devolved parliament and how women have in recent history fought to have the vote. 

Free – Teachers Resource Packs
These specially commissioned packs contain lots of resources and exciting lesson ideas including some pre-show activities and suggestions. (Packs funded by The Scottish Co-operative Membership)