(First published 1/2/2013)
The keynote speakers at yesterday’s Co-operatives Yorkshire & Humber AGM sounded notes of both caution and optimism about the next stage of co-op development. The caution related to Co-operative Councils and the use (perhaps abuse) of the term ‘co-operative’ to help them through the current programme of austerity. This was tempered by news from different parts of the country that there are new initiatives to develop member- (i.e. public-) led service delivery. With a number of co-op councillors present, keynote speakers were not shy in outlining opportunities for co-operative development with Local Authorities.
Derek Walker from the Wales Co-operative Centre highlighted a bill making its way through the Welsh Assembly that includes a duty to provide a co-operative social care organisation in every region of Wales. Laurie Gregory from the Foster Care Co-operative highlighted how their approach gives the recipients of care membership and voting rights in the organisation that provides their care. Furthermore, patient / family member contributions towards care can supplement state funds to improve the quality of care for all. Astonishingly, no other care organisation in the UK has this arrangement – not even the widely praised (employee-owned) Care and Share Associates (CASA).
Towards the end of his key note, Laurie called the co-operative ‘a cracker of a model’. This theme also permeated the workshop on the FairShares Model, a new initiative by six educators and consultants to encourage multi-stakeholder (solidarity) co-operatives that include both producers and consumers as members. Based on what works in practice, the FairShares Model draws on existing examples of power and wealth sharing. During the workshop, participants learnt about the Bank of the People’s Labour in Mondragon (1/3 worker controlled, 2/3rds consumer controlled), its university (1/3 controlled by students, 1/3 by staff and 1/3 by supporters) and Eroski, the fastest growing retail chain in Spain (1/2 controlled by consumers, 1/2 by producers).
Closer to home, there were discussions of Stakeholder Model Ltd, developed by Geof Cox, which enfranchises people through stewardship, partnership and investment shares. We discussed theNewCo Model (developed by Morgan Killick at ESP Projects Ltd with support from Sheffield’s Community Economic Development Unit). Alan Dootson commented that it enabled a co-operative social enterprise to get a ‘flying start’ by allowing customers to collectively invest in the service they needed. Over time, customers decrease their holdings to allow the workforce to increase theirs, while founders retain holdings that reflects their entrepreneurial efforts. Similar ideas have been embedded in Rory Ridley-Duff’s ‘surplus sharing’ social enterprise model. The authors of all these three models have been joined by consultants Nicci Dickins (MIH Consultancy Ltd), Cliff Southcombe (Social Enterprise Europe Ltd) and Emma Green (Co-operative and Social Enterprise Support Ltd) in a new organisation to further develop their ideas.
The FairShares Model is now supported by the FairShares Association. It was formally launched at the CYH AGM by Rory Ridley-Duff and Emma Green. Together with Cliff Southcombe, they have incorporated the UK’s first FairShares Company. Around the table (or, more precisely, in the circle of chairs) there were representatives from Co-operatives UK, Key Fund, Charity Bank, Co-operative Group and Doncaster Council. Questions focussed on the apparent complexity of FairShares and whether it would be attractive to traditional supporters of co-operatives and social enterprises.
In response, Rory and Emma stressed how the model documents the practices of successful UK co-operatives and employee-owned businesses (John Lewis, Scott Bader, Gripple, School Trends). Each developed a group structure and governance model that combines trading enterprises (directly / indirectly owned by members) with secondary mutuals that receive and distribute surpluses for employee, community and public benefit. This approach is embedded in the FairShares Model. It even allows a single-person to start an enterprise and develop it over 5 – 10 years into a multi-stakeholder co‑operative enterprise without ever having to change Articles of Association. This saves tens (even hundreds) of thousands of pounds in legal fees.
Another series of questions (prompted by discussions of public sector spin outs) focussed on provisions to resist takeovers by private firms and dissolutions by local authorities. In this case, the one-person, one-vote model of governance for regular decision-making was contrasted with special resolutions needed to sell or wind-up a FairShares Enterprise. To pass a special resolution, each stakeholder group (founders, employees, service users and investors) have to secure a majority, in addition to a 75% majority overall. This gives FairShares Enterprises a better defence mechanism than Building Societies and Bus Companies had in the 1980s/90s.
All in all, it was a good day – plenty to think about.