Co-operatives and the "Big Society"

As a co-operator you would probably expect me to argue that every organisation could benefit from being more co-operative, that people are naturally co-operative, that co-operative enterprises are innovative, flexible business models that operate in every sector of the economy. As there are some 800 million members of co-operatives globally, employing 100 million people – more than all the multinational companies put together – I do not need to be convinced that co-operatives are a better way of doing business.

I have to say that internationally, not just here in the UK, the lack of confidence in the welfare state and the lack of trust in the private sector has lead to a renewed interest in co-operative enterprise. Indeed the United Nations General Assembly have designated 2012 the International Year of Co-operatives.

So should I be flattered when the Prime Minister himself argues for more co-operative’s in the economy and goes on to make the case for the transfer of previously state provided public services to the co-op sector?

There is no simple statute in English law on what constitutes a co-operative, indeed currently; we have at least eleven different legal bases for co-operatives in UK law. I maybe looking a gift horse in the mouth but my first instinct is to wonder if David Cameron and I are talking about the same thing.

Clearly there is plenty of room for growth in the sector currently there are only around five thousand co-operative businesses in the UK, even so they have almost 13 million members, employ a quarter of a million people and turnover of £33.5billion. So I am happy to talk to anyone who is genuinely interested in growing the sector.

But are we talking about the same thing? The co-operative identity statement agreed by the International Co-operative Alliance in 1995 says that a co-operative is: An autonomous association of persons united voluntarily to meet their common economic, social and cultural needs and aspirations through a jointly owned and democratically controlled enterprise.

This is derived from the seven some times called the ‘Rochdale’ principles of co-operation, simply put these are:
1. Voluntary and Open Membership.
2. Democratic Member Control.
3. Member Economic Participation.
4. Autonomy and Independence.
5. Education, Training and Information.
6. Co-operation amongst Co-operatives.
7. Concern for Community.

Clearly some of these are more fundamental than others. Firstly, the enterprise has to be autonomous or independent secondly it has to be under democratic member control. This incorporates the one member one vote principle which ensures the business is people rather than capital controlled, next comes member economic participation which follows since members who have an equal vote are likely to allocate surpluses in a fair way. Voluntary and open membership means that people have the opportunity to join of their own free will. I would argue that these four principles are fundamental in creating the structure and principles for a member owned business.

The other principles are desirable rather than essential but just from these principles it is clear that a co-operative is not something that can be created by decree. The transfer of public undertakings into co-operatives, setting aside if such a change is desirable, will be a long drawn out complex procedure.

There is no doubt that internationally from places that would appear to have little in common like Venezuela and Cuba to the UK the scope for co-operative enterprise has never been greater yet it is something of a cliché that for co-operatives you need co-operators. This requires a huge shift in our business culture and our education system, as well as changes to the legal and financial framework for business in the UK. Currently co-operatives are discriminated against in all these areas. Work will be needed across the piece if we are to see a genuine paradigm shift in the proportion of the economy in the co-operative sector.

Also on a practical level we need more support for co-operative business, with better co-operative business, accountancy, banking and legal advice services across the country. In the tradition of self help both Co-operatives UK and the Co-operative Group are doing sterling work in this area but there needs to be more. There are numerous existing businesses with succession challenges, where the necessary shared commitment, common interest and mutual trust exists and like the recent case of Blackwells Bookshops would benefit from a move to co-operative ownership. That transition could be made that much easier if the right advice and support services were available.

2012 can indeed be the year of the co-operative. The co-operative movement can make a significant contribution to the ‘Big Society’ but it needs more than warm words it needs practical action.