26 May 2010

Japanes visit to Co-operatives UK and Suma

Recently Co-operatives UK received a request from the Japanese Embassy in London to help them with research into worker co-operatives.  The Japanese Government is looking to update their co-operative legislation and were interested in the situation in the UK. How we  promote and develop worker co-operatives and what the barriers for growing and developing the movement are.

Co-operatives UK quite regularly gets international enquiries and we do our best to support co-operatives in other countries whenever we can. I therefore organised a visit to Co-operatives UK and Suma for the First Secretary (Economic Section) a Mr Ishizu that took place yesterday.

Mr Ishizu was fascinated with Suma's business structure; especially their lack of executive management.
Suma deals with this by treating management as a function (not status) and different aspects of management are dealt with by different people on behalf of the Co-operative. All members of Suma are paid equally and all have an equal responsibility for the management and performance of the business.

Here is a picture of Bob Cannell showing Mr Ishizu photographs of all the members in Suma.

20 May 2010

CECOP General Assembly Brussel's: Part 1

Bob Cannell (Suma) and I attended the CECOP General Assembly earlier this week to represent the UK. This post will give a brief overview of what CECOP is and what the main issues discussed were. I hope you find this interesting and if any worker co-operatives want to get more involved or build links with our European partners please contact me.

CECOPCICOPA Europe is the European confederation of cooperatives and other employee-owned enterprises that are active in industry, services and crafts, most of them being worker and social cooperatives. It affiliates 25 national federations in 16 EU countries, which in turn affiliate approximately 50,000 enterprises which employ 1.4 million workers and generate an aggregate turnover of around €50 billion.

Big numbers and the UK is a small fish in this pond with France, Spain and Italy all having massive worker co-operative sectors in comparison to us. Mondragon in Spain is their 7th largest Corporate Group....

CECOP's is similar to Co-operatives UK but on an EU level, their primary role is unite all the different national federations and lobby the EU commission and Parliament on our behalf. The main discussions were:

Impact of the Financial Crisis
On the whole, worker co-operatives have faired better during the crisis, particularly more likely to survive and with lower job losses. CECOP has made a point to lobby on behalf of the sector to take advantage of this turn of events. Reason's for why worker co-operatives have faired better include:
  • Longer term thinking, re-investment of profits.
  • Less reliance on financial markets lower levels of debt (leverage).
  • Prioritise good quality and sustainable employment for its members rather than withdrawing wealth from the business.
  • Worker Co-operatives tend to focus more on training and development.
  • Not so much in the UK but Italy and Spain have a good track record for Co-operatives supporting each other and "clustering" to gain economics of scale and provide services for each other.
Lobbying work and Post-Lisbon EU Strategy (2020)
After the Lisbon Treaty the EU Commission has developed a strategy and priorities for the future, CECOP were involved in the consultation process and has worked hard to lobby and make sure that Co-operatives get treated fairly.

In the UK we don't get any real preferential treatment (in fact it could be argued we get less favourably treated than mainstream business forms). Whereas in other countries like Italy and Spain there are benefits, concessions and tax breaks for co-ops. For example in both Spain and Italy people can use their employment benefits to invest in setting up a worker co-operative that succeeds the previous business that employed them (employee buy-out).

Other Lobbying work includes, working hard to make sure changes to International Financial Reporting Standards do not put Co-operatives at a disadvantage (Whether members investments are treated as Assets or Liabilities for example).

Social Co-operatives and Social Enterprise
In the UK we have taken a different approach to other EU countries when looking to change public service delivery. Italy, Sweden, Spain and France have focused on the co-operative model as the vehicle to deliver these services and be the "social economy"; we have mostly focused on Social Entrepreneur model of Social Enterprise.

"Social Co-operative" is a growing term and a source of new co-operatives (7000 just in Italy alone). CECOP has recently released a book and is working on standardising the term across the EU with the future goal of properly recording them and promoting the model.

Whats a Social Co-operative?
It is always difficult to understand concepts from other countries, but basically a "Social Co-operative" is:
  • Multi-stakeholder Membership - users, workers and customers (funders).
  • Deliver services of "General Interest" (which is similar, but a tighter definition than our "community interest" test for CIC's, more specifically about public services).
  • They abide by co-operatives principles; in Italy they have their own legal form.
What is fascinating for the me is there are definitely Co-operatives in the UK that fall into this category, and there maybe other democratically owned social enterprises as well. Both groups would benefit from understanding and learning from the more developed sector on the continent. 

I don't understand the full import, of this new model, but once CECOP completes their work I will do a bigger article.  This model could be what the new coalition Government is looking for to square the circle between freeing up public service delivery but keeping it accountable.

Relationships with Trade Unions
A big theme of the conference was building links with Trade Unions when dealing with businesses in crisis (particularly relevant in the current economic climate!).  Other than in Wales, where that has been some great examples Tower Colliery).  The UK is miles behind our European colleagues when it comes to Trade Unions and the Co-operative movement working together to turn business in crisis into sustainable worker co-operatives (Particularly France).  There is a myth that worker co-operatives by there nature don't need trade unions. This doesn't seem to be the case with worker co-operatives like Suma being heavily unionised (over 80%).

Other Tid bits
Dealing Business Succession - France, CGSCOP are very good at it.
Bringing Disadvantaged people into employment - Italy, Federsolidarieta are very good at it.

Mostly written while traveling back so apologies for poor prose...