Blog article

Co-op Policy Blog #9: Our impact and priorities

Members have told us they would value clearer summaries of what we achieve through our policy work. So, Policy Blog #9 gives a very quick review of the tangible gains we made in 2018 and, in the context of extreme uncertainty, sets some priorities for 2019.

Inclusive ownership and control  

Since the EU Referendum politicians across the spectrum have emphasised the need to foster an economy that is better at sharing opportunity, wealth and power – this is usually called an ‘inclusive economy’. Depending on the degree of political sincerity, there are opportunities here to win better support for businesses that share ownership and control in the economy. Finding ways to take advantage of these opportunities remains a high priority in our advocacy work.

In 2018 we won new support for community co-ops in Government’s Civil Society Strategy. According to the Strategy, there will be new efforts to promote and support the community shares model and more support for community ownership of assets. There will also be a new forum through which community co-ops can raise policy issues with Whitehall. And there’s a hint that recent changes to Social Investment Tax Relief, which left it of little use to big parts of the community business landscape, will be revisited. Through our work with the Civil Society Team, we’ve also gained some influential allies in Whitehall, as we prepare to campaign for community economic development to be supported by whatever replaces EU regional funds post-Brexit (see below). 

In 2018 we tried and failed to get worker ownership onto the Westminster government’s inclusive economy agenda. In the spring and summer of 2019 the government will run a Spending Review, which will set multiyear budgets for departments. We’re talking to the Worker Co-op Council and the Employee Ownership Association about calling on central government to fund programmes of support for people to choose worker ownership, through start-ups, early evolution and conversion during planned succession. 

Our lobbying led to government commitments in 2018 that will create further opportunities to make the society legal forms more user-friendly.

User-friendly options for co-ops

One of our top priorities is for policy that makes it easier for people to set up and develop co-ops. Last year audit requirements for growing co-operative and community benefit societies were made much fairer, following two years of lobbying on our part. At the back end of last year the FCA Mutuals Team began making real progress towards offering societies a better deal, with proposals to abolish high fees and the launch of a much-needed online portal. While the Mutuals Team deserves a lot of credit for this, we know the pressure we’ve applied behind the scenes has helped make the business case for these changes inside the FCA bureaucracy. 

Our lobbying also led to government commitments in 2018 that will create further opportunities to make the society legal forms more user-friendly. In June 2018 government promised to explore non-legislative and legislative options to improve ‘regulatory clarity’ for societies. We now know that this commitment will be fulfilled through a Whitehall forum; and that Co-operatives UK is down to play a leading role for societies. We’ll be using the responses we received to our recent members’ consultation to inform priorities for government. At the top of our list of non-legislative issues, will be the fact that societies are currently being badly under-served in the Making Tax Digital project.

Our member consultation has also helped to crystallise priorities for legislative reform. While there are some important dissenting arguments that must be taken into account, there is overwhelming support among our members for reforms that give co-operative societies the option of adopting ‘statutory common capital’ rules - for example, giving statutory weight to rules most co-operative societies already have that prevent residual assets being distributed to members. While we will be using what we’ve learned from members to feed into Whitehall, we have also already used it to inform the Labour and Co-operative Parties’ policy development process (see here).  

Campaigning for community economic development 

The biggest barrier to the growth of the co-op economy is a lack of awareness and practical understanding about co-op options among people for whom the model might be beneficial. To address this we need to expand the use of community economic development in places across the UK. Community economic development is a process through which people living, working and running businesses in an area work together as a community, to effect positive change in their economic circumstances. The focus is very much on livelihoods, enterprise and influence over local resources and wealth flows. So co-ops tend to feature prominently. The national policy should be for all local communities to have access to the funding, technical advice and policy support they need to participate in community economic development, with priority given to people in areas of concentrated deprivation.

In 2018 our emphasis on community economic development was reflected in the Civil Society Strategy, as government announced pilots for community-led, place-based investment using dormant assets. And while the Strategy was a little underwhelming on the role of communities in local economic policy, there were encouraging nods from ministers in that direction. 

In 2019 we intend to campaign for community economic development to be funded and supported through the UK Shared Prosperity Fund. This is the government’s name for what replaces billions-a-year EU regional funds. Right now, the plan is for all this money to go straight to Local Enterprise Partnerships and Metro Mayors to spend on regional productivity. If this happens one of the earliest opportunities to turn Brexit into something that empowers people on low incomes in deprived places will be missed. Together co-ops and other aligned movements can fight for something better. 

Protecting farmers’ ability to co-operate after Brexit 

We also had a significant impact in 2018 advocating on behalf of farmers’ co-ops. Following our concerted efforts to convince government that farmers outside the EU will need to co-operate more and with greater impact, Defra announced a new £10 million Collaboration Fund. Defra also set out an important role for farmer co-operation in its official plans for post-Brexit agricultural policy. Our interventions also led to amendments in the Agriculture Bill and Brexit legislation that will protect farmers’ ability to co-operate outside the EU. 

There will be more to do in 2019 to ensure the detail of the post-Brexit policy supports new and existing forms of farmer co-operation. 

Ways to get involved in 2019

All members of Co-operatives UK are encouraged to get involved in our advocacy work. Here are some of the things we plan to work on in 2019 that will be strengthened by member participation:

  • UK Shared Prosperity Fund: campaigning for community economic development
  • Spending Review: campaigning for funding to help people understand and adopt worker ownership models, including at start-up and early evolution, using worker co-op models 
  • Social Investment Tax Relief Review: making the relief work to co-ops and community investment
  • Social Sector Forum: feeding in priorities for making the society legal forms more user-friendly

Thank you for supporting our policy work through your membership of Co-‑operatives UK. 

James Wright, Policy Officer

Written by James Wright
Updated: 29/01/2019