Proposals to develop co-operatives and other social enterprises in Brighton & Hove

In 2016 Mutual Aid in Sussex (MAIS) in partnership with several others co-wrote a document to lobby Brighton & Hove City council, and the local political parties, to support and expand the co-operative sector.

A previous version of this document was used to lobby the local political parties. Parts of that were incorporated into the Brighton & Hove Green Party 2015 manifesto.

After this document was written, MAIS was very involved in creating and running the Community-Led Housing Programme, led by Brighton & Hove Community Land Trust (BHCLT). Some of the people who wrote the document below were involved with that as well as others. BHCLT, working with Brighton & Hove City Council, implemented some of the ideas  outlined below in the housing section (5.4.4).

Please find the below document as a PDF here.

Proposals to develop co-operatives and other social enterprises in Brighton & Hove

April 2016

1 Introduction

The aim of this document is to set out proposals for co-operative and other social enterprise development in Brighton, Hove and the surrounding area. It is written by Mike Aiken (Co-operative Research Unit, The Open University) and Edward Jones (co-founder of Mutual Aid in Sussex) after consultation with different co-operatives and social enterprises in the city as well as with co-operative academics and development workers such as Dr Rory Ridley-Duff (Reader in Co-operative and Social Enterprise at Sheffield Business School), Kate Whittle (Co-operantics), Dave Boyle (Director of The Community Shares Company, Principle Six), Helen Russell (Co-operative Housing in Brighton & Hove) and Andrea Jones (PhD Researcher on Intentional Communities at University of Sussex). We are all keen to see the development of a strong, vibrant co-operative sector locally which contributes to the local economy and which also helps address social and environmental needs in the area. This document sets out a way forward.

2 Consultation: round tables

We undertook a brief consultation with key figures in the co-operative field during the spring of 2016 to develop initial proposals. We also examined some of the broader literature. This document aims to start a series of round tables with key players – such as local politicians and key council workers – to scope out the best ways to support co-operative development in Brighton and Hove in line with the city’s long traditions in co-operative working and living.

This consultation partly found what others have found elsewhere:

“The group…studied cooperatives in other U.S. cities and in Canada, Spain and Italy. They heard the same thing repeatedly: To get a mass movement of co-ops off the ground, a public investment is needed.”i

However, in light of austerity and the cuts, the document below suggests many cost effective pledges, most of which would be cost neutral and would create long-term savings. They build on the experience of what has been shown to expand the co-operative and social enterprise sectors in other parts of the UK and elsewhere.

To be clear, we remain opposed to the privatisation and outsourcing of essential public services – we believe that many services are best kept in the public sector, and that certain services should even be brought back into the public sector if in the interest of the community (and if possible with the cuts).ii We just want to make sure that the council does not fail to utilise the city’s biggest resource – its people – when thinking about how we make the city the kind of place that is great to live and work in now and will continue to be so in the coming decades.

3. Why co-ops and other social enterprises?

Locally-owned businesses, including co-operatives and other social enterprisesiii, make a better contribution to the local economy and can stop money generated in the city leaving it as profits for people outside it, be they distant shareholders or lendersiv.

By being owned and run by people in the city, for people in the city, they tend to pay better wages – and empowerv – their employees, reduce inequalityvi, are more resilient in economic downturnsviiviiiix, be more sustainable and take issues which affect local people like waste reduction much more seriouslyx as well as being at least as – and often more – efficient than private enterprises.xi

Housing co-operatives also play a small but growing role in Brighton & Hove in providing more genuinely ‘affordable’xii housing to people in housing need and are seen nationally as a strategic part of the solution to the housing crisis in the UK.xiii

Co-operatives and other types of social enterprise are increasingly being used to support community-led energy generation (Brighton Energy Co-op), community-owned pubs (The Bevy) and halls (Exeter Street Hall) and are becoming more important in manufacturing, retailing, education and social care provision. Well known workers’ co-operatives in the city include Infinity Foods and Magpie Recycling Co-operative and recent additions include Bartleby’s brewery, Coachwerks Wholefoods and Kindlings Outdoor Play and Education Co-operative. Housing co-operative’s in the city include Two Piers, Hedgehog and Out of Town Housing Co-ops, and are supported by the long-standing network – Cooperative Housing in Brighton and Hove (CHIBAH).xiv

The city has been slowly rising on the list of national ‘hot spots’ of co-ops.xv Our aim with the proposals in this document is to start dialogues on how to expand support for co-operatives in the city to make Brighton one of the co-operative capitals in the UK by 2020.

4. The council’s vision for co-operatives and other social enterprises

A cultural change across the Council is necessary to ask at every possible stage: would it be better for the city and its people if this policy or that budget were spent to support the locally owned social economy through co-operatives and other social enterprises? Where such organisations exist, the council could look to support them through the policies it promotes and the money it spends (often called procurement). The council could also look to support the development of new social economy businesses as well as the expansion of existing ones and help them better link up to support each other and the city.

5. Practical policies to make Brighton and Hove a co-operative city

5.1 A Co-operative Commission: roundtables with co-operators and supporters

The council should establish a local, independent and cost-effective co-operative development commission to work with co-operatives, co-operative development bodies, unions, academics, the council and other interested parties, to review the barriers to co-operative and other social enterprise development in the city and provide recommendations. The council would then aim to provide appropriate support of those recommendations. This commission would build upon the experience, skills and wisdom accumulated over the years by co-operatives and other social enterprises that exist in the city. This should aim to lever in funds from co-operative societies and elsewhere in order to multiply benefits for long-term investment. The commission would be compact and action focussed – it would governed by a majority of co-operative members with partners from the city council, universities and community organisations.

5.2 Changes to procurement policies

Further amend council procurement policies to reflect the value of local co-operatives and other social enterprises, so the social, economic and environmental benefits provided by them are factored more into procurement decisions. The development of co-operatives would be part of the Corporate Plan and the council’s economic visionxvi and would build on provisions in the Social Public Services (Social Value) Act (2012) which requires regard for economic, social and environmental well-being in connection with public service contracts.xvii This could build on what other councils have already achieved, such as work on this by Knowsley Councilxviii and Edinburghxix

5.3 Direct support to people developing co-operatives

Support local people to create co-operative and other social enterprise alternatives to private suppliers for services which are already council-procured, particularly with transport, housingxx, leisurexxi and carexxiixxiii, where many positive examples of how to successfully do that already exist across the UK.

5.4 Joint work with co-operatives

Work with co-operative development bodies, co-operative experts and the council’s economic development team to expand legal support and other necessary training and facilitation for the formation and expansion of co-operatives and other social enterprises in the city. Such training, facilitation and development could be grounded in the International Co-operative Alliance’s principles for co-operatives and would aim to support different types of co-operatives and social enterprises, including workers’ (producer) co-operatives, consumer co-operatives (such as food co-ops), housing co-operatives and other varieties.

5.4.1 Working with businesses

Work with businesses across the city to encourage those selling up, whether due to retirement of the owner(s) or for other reasons, to give first right to buy the business to their employees before selling it on the open market.xxiv

5.4.2 Collaborate and harness existing experience – the power of education

Work with organisations such as AltGen and Young Co-operativesxxv to expand young co-operative schemes in local schools, colleges, universities and the wider community, teaching young people the history of co-operatives as well as how to practically set them up and work within them.xxvi These schemes would ideally celebrate the rich history and contribution of people in Brighton and the surrounding area to co-operative social and economic development, including the pioneering work of Dr William King.xxvii

5.4.3 Integrating co-operative knowledge into existing learning and information portals

The council’s economic development staff could work together with small and local co-operatives to help co-ordinate information about co-operatives such as public information days, leaflets, and public workshops teaching co-operative skills for people of all ages. The possibility could be explored of co-ordinating visits to existing local co-operatives from people wishing to set up new co-operatives.

5.4.4 Supporting co-operative housing solutions to the housing crisis

Brighton & Hove City Council (BHCC) has made a commitment in the City Plan (2016)xxviii and in its housing strategy (2015)xxix to support the development of co-operative housing. We support the existing efforts of BHCC to support co-operative housing in the city, such as the Estates Regeneration Team and Housing Department working with Bunker self-build housing co-op to use innovative building technologies to build very low cost family homes on a small disused council-owned site. However, we feel that further efforts could be made to support and encourage housing co-operatives given the housing crisis in the city, such as

  • Having a single point of initial contact within BHCC for housing co-ops seeking land or buildings.
  • Open up windows of opportunity when public-sector land or property becomes available for housing co-operatives to put in business cases before these opportunities are open to established commercial interests; especially for those housing co-ops whose members meet BHCC Housing Allocations Policy. xxx Consider making it a condition of disposal or partnership that bids include a co-operative or community-led element.
  • Continue to support self-build housing cooperatives, especially where members meet BHCC Housing Allocations Policy for housing co-ops.
  • Work collaboratively with the housing cooperative sector to apply for grants to provide a facilitation service and expertise for new housing co-ops in Brighton and Hove.
  • Publish online the self-build register required by the Self-build and Custom Housebuilding Act 2015xxxi, and work with co-operatives in Brighton to help interested parties find sites to satisfy the demand on the register. We note that the Housing & Planning Bill currently progressing through Parliament may also require BHCC to provide suitable development permission for enough serviced plots of land to meet the demand arising from the register.
  • Ultimately we would like to see, as the national Commission on Co-operative and Mutual Housing asks for, “an aim to be set that by 2030, each town, village and community should be able to offer co-operative and mutual housing options to potential residents.”xxxii

5.4.5 Establishment of Co-operative Trade Fair

Explore the setting up of a local trade fair where co-operatives and community enterprises in the city can meet each other, learn from each other, trade with each other and socialise. The council should be committed to encouraging and facilitating co-operation between co-operatives for mutual learning and trading.

5.4.6 Kick start joint finance initiatives with existing organisations

Work with local banks, mutuals and credit unions to expand start-up or expansion loans for local co-operatives. Explore if more affordable capital lending can be made via East Sussex Credit Union. Collaborate with central government, where appropriate and with sufficient safeguards, to invest in co-operatives for a financial return.

5.4.7 Develop fiscal and planning incentives for the local co-operative economy

Explore introducing economic incentives to promote co-operatives, such as rental and business rate discounts for co-operatives where appropriate, in particular for those newly created, expanding or in short-term financial difficulty. If possible, streamline the process, and provide dedicated support, for co-operative licensing and planning.

5.4.8 Blend existing programmes to involve co-operative development

Encourage co-operatives to fully feature as an alternative to traditional commercial enterprises and employment, and as a path after education, through, where possible, career advisory bodies and job centres.xxxiii Pilot a New Co-operative Allowance as a variant on the New Enterprise Allowance, with job seekers and working benefit claimants are supported in establishing new co-operative ventures. Potential beneficiaries should be helped to find others with similar skills and ideas, and be encouraged to explore working jointly, rather than just on their own.xxxiv

5.4.9 Facilitate collaboration to establish a Mutual Employment Agency

Work with the co-operative sector, trade unions and businesses to try and create a Mutual Employment Agency. This will provide access to employment on more favourable terms than most agencies and gang masters currently offer, while still retaining flexibility in the labour market. This would build on the living wage campaign that Brighton & Hove City Council has supported and committed to, and would aim to reduce inequality and the amount of zero-hours contracts in the city to ensure that agency workers are well supported. A Mutual Employment Agency would enable agency workers to work together to defend the employment rights the council is supportive of them having. Steps will be taken to ensure that this model is not abused by those who exploit vulnerable workers. We remain opposed to forced or coercive work programmes related to involvement in co-operatives – engagement in co-operative working needs to be voluntary.xxxv

5.4.10 Encourage development of pilot Entrepreneurs’ Co-operatives

Work with central government, the co-operative sector, trade unions and private businesses to try and pilot Entrepreneurs’ Co-operatives, in which young people, the unemployed and vulnerable workers with business ideas are supported to use a consortium co-operative model to share input costs, provide mutual financial and legal cover, and offer ‘mutual guarantees’.xxxvi

5.4.11 A focus for co-operatives in the City Council

Introduce the councillor posts of elected Co-operatives’ Champion and the officer post of Executive Co-operatives’ Champion to ensure that the pledges are met.

6. Bibliography

i Nzinga Ifateyo, A. (2014) ‘A Co-op State of Mind: New York City jumpstarts worker cooperatives’, In These Times http://inthesetimes.com/article/17061/a_co_op_state_of_mind

ii If council services are to be mutualised, the council should at the very least follow the best practice guidance developed by the TUC and Co-operatives UK. See: ‘Public Services, Co-operatives and Mutuals: Best practice guidance’, http://www.uk.coop/sites/default/files/uploads/legacy-files/downloads/tuc_co-operatives_uk_guidance_0.pdf

iii For an overview of the different types of co-operatives, see: Aiken, M. (2014) ‘Co-operatives in the United Kingdom’, Working paper prepared for the UK Work Programme on EMES ICSEM Research.

iv Sacks, J. (2013) ‘Evaluating the local impact of the co-operative pound’, New Insight 10, Co-operatives UK http://library.uniteddiversity.coop/Money_and_Economics/Cooperatives/Local2-Evaluating_the_local_economy_impact_of_co-operative_using_LM3.pdf

v Napier-Moore, R. (2007) Power in Utopia? Analysis of two UK workers’ co-operatives through Steven Lukes’ three-dimensional lens, IDS Paper, http://tinyurl.com/jsrw5l9

vi Pickett, K. and Wilkinson, R. (2014) ‘Reducing Inequality Through Economic Democracy’, Journal for a Progressive Economy http://www.progressiveeconomy.eu/content/reducing-inequality-through-economic-democracy-en

vii CECOP (2012) ‘The resilience of the co-operative model’ http://www.cicopa.coop/Resilience-of-cooperatives-to-the.html

viii ILO (2013) ‘Resilience in a downturn: The power of financial cooperatives’, http://www.ilo.org/wcmsp5/groups/public/—ed_emp/—emp_ent/—coop/documents/publication/wcms_207768.pdf

ix Birchall, J. and Ketilson, L. (2009) ‘Resilience of the Cooperative Business Model in Times of Crisis’, International Labour Organization http://www.ilo.org/empent/Publications/WCMS_108416/lang–en/index.htm

x Sahakian, M. and Dunand, C. (2015) ‘The social and solidarity economy towards greater “sustainability”: learning across contexts and cultures, from Geneva to Manilla’, Community Development Journal, 50(3): 403-417

xi Borzaga, C. and Depedri, S. (2014) ‘When social enterprises do it better: efficiency and efficacy of work integration in Italian social co-operatives’, in S. Denny and F. Seddon (eds), Social Enterprise: Accountability and Evaluation Around the World. London: Routledge, pp. 85–101.

xii Housing co-operatives provide affordable housing, both by the statutory definition as well as by many other more stringent definitions. The definition of what is ‘affordable’ is contested. The statutory definition is “80 per cent of the local market rent” (see: Department for Communities and Local Government (2012) National Planning Policy Framework https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/6077/2116950.pdf p.50). For a broader discussion on the different definitions of ‘affordable’ housing, see: Alakeson, V. and Cory, G. (2013) ‘Home Truths: How affordable is housing for Britain’s ordinary working families?’, Resolution Foundation http://www.resolutionfoundation.org/wp-content/uploads/2014/08/Home-Truths.pdf p.15-19

xiii The Lyons Housing Review (2014) Mobilising across the nation to build the homes our children need http://www.yourbritain.org.uk/uploads/editor/files/The_Lyons_Housing_Review_2.pdf See p. 87, 94, 112 and 139

xiv For a list of many of the co-operatives and other types of social enterprises in the city, please see: https://maisnetwork.wordpress.com/local-co-ops/

xv Co-operatives UK (2015) The co-operative economy 2015: An ownership agenda for Britain https://www.uk.coop/sites/default/files/uploads/attachments/co-op_economy_2015.pdf p.10

xvi Co-operatives UK (2014) Co-operative Councils: opportunities for growth, Policy Briefing, See pages. 4, 6 and 7. https://www.uk.coop/sites/default/files/uploads/attachments/co-operative_councils_briefing_0.pdf

xvii Public Services (Social Value) Act (2012) http://www.legislation.gov.uk/ukpga/2012/3/enacted

xviii Walters, N. (2013) ‘Creative commissioning – the Social Value Act in practice’, The Clore Social Leadership Programme, http://www.cloresocialleadership.org.uk/userfiles/documents/Research%20reports/2013/Research%20Nathalie%20Walters%20-%20Creative%20Commissioning%20.pdf . See also: Co-operative Councils (2014) ‘Knowsley: Growing the social sector through a Social Value Model’, http://www.coopinnovation.co.uk/case-studies/knowsley-growing-the-social-sector-through-a-cooperative-social-value-model/#sthash.AQ9Gr0NL.dpuf and Knowsley Council (2015) ‘Corporate Plan: Knowsley Council 2015 – 2019’ https://www.knowsley.gov.uk/knowsleycouncil/media/Documents/corporate-plan-2015-19.pdf

xix Communities and Neighbourhoods Committee (2015) The Cooperative Capital Framework: Year Three Progress Report http://www.coopinnovation.co.uk/wp-content/uploads/2015/12/Item_7.1___Cooperative_Capital_Framework_Year_Three_Progress.pdf

xx See, for example, Redditch Co-operative Homes http://rch.coop/about_us

xxi See, for example, Greenwich Leisure Limited http://www.gll.org/b2b/pages/3

xxii Conaty, Pat (2014) Social Co­operatives: a Democratic Co-production Agenda for Care Services in the UK, Co-operatives UK http://www.cooperatives-wales.coop/wp-content/uploads/2014/07/CUK-Social-Co-operatives-Report-final.pdf See also: Roulstone, A. and Hwang, S. K. (2013) Co-operation and Co-operatives in the Development of Direct Payment Schemes in Wales: A Report for Wales Co-operative Centre and Disability Wales http://www.disabilitywales.org/wordpress/wp-content/uploads/direct-payments-report-eng.pdf

xxiii See the examples of Sunderland Home Care Associates Ltd http://www.sunderlandhomecare.co.uk/aboutus.html and Shepshed Carers Co-operative http://case-da.co.uk/wp-content/uploads/2012/11/CASE-Newsletter-Feb-14-Shepshed-Carers-special-edition.pdf

xxiv Nolan, N. and Perrin Massebiaux, E. (2013) Saving Jobs, Promoting Democracy: Worker Co-operative Conversions http://www.labourafterconflict.org/wp-content/uploads/2012/05/Worker-coops-conversion-in-France-revised.pdf

xxv See some info about the work of Young Co-operatives here: http://www.co-op.ac.uk/schools-and-young-people/young-co-operatives/#.VpeCLWH97tQ and AltGen here: http://altgen.org.uk and here

xxvi Welsh Co-operative and Mutuals Commission (2014) Report of the Welsh Co-operative and Mutuals Commission http://gov.wales/docs/det/publications/140221coopreporten.pdf?lang=en p. 4-5, 37-39

xxvii Dent, J. J. (1997) The cooperative ideals of Dr. William King: editor of the Brighton Cooperator, 1828-1830, Ann Arbor, London. Also see Dr William King: The Cooperator http://www.thisbrighton.co.uk/city-politics/dr-william-king.htm

xxviii BHCC (2016) Brighton & Hove City Plan One, Brighton & Hove City Council’s Development Plan. https://www.brighton-hove.gov.uk/sites/brighton-hove.gov.uk/files/FINAL%20version%20cityplan%20March%202016compreswith%20forward.pdf p.116 The City Plan states: “Some land within the city’s urban fringe has been identified as having potential to help meet the city’s housing requirements (see Part B, Policy CP1 Housing Delivery). Sites identified through the 2014 Urban Fringe Assessment Study (or parts of sites where relevant) will be considered to have potential for housing in the Strategic Housing Land Availability Assessment exercise. Further consideration and a more detailed assessment of potential housing sites will be undertaken to inform allocations made in Part 2 of the City Plan with a particular emphasis on delivering housing to meet local needs. As part of this process, the City Council will consider how best to ensure that opportunities for community land trusts, community-led development, right to build, and housing co-operatives are brought forward/safeguarded in order to maximise housing opportunities that meet local housing needs. This will be taken forward through the City Plan Part 2. Sites coming forward for development ahead of the preparation of Part 2 of the City Plan will need to address criteria c) to e) set out in Policy SA4 above and satisfy detailed information requirements110 at the planning application stage.”

xxix BHCC (2015) Housing Strategy 2015, https://www.brighton-hove.gov.uk/sites/brighton-hove.gov.uk/files/Housing%20Strategy%202015%20(FULL%20COUNCIL%20FINAL).pdf

xxx BHCC (2013) BHCC Allocations Policy, https://www.brighton-hove.gov.uk/sites/brighton-hove.gov.uk/files/BHCCAllocationsPolicyOct2013.pdf See also: BHCC (2015) Housing Strategy 2015, https://www.brighton-hove.gov.uk/sites/brighton-hove.gov.uk/files/Housing%20Strategy%202015%20(FULL%20COUNCIL%20FINAL).pdf

xxxi Self-build and Custom Housebuilding Act (2015) http://www.legislation.gov.uk/ukpga/2015/17/contents/enacted

xxxii Commission on Co-operative and Mutual Housing (2009) ‘Bringing Democracy Home’ http://www.cch.coop/wp-content/uploads/2015/07/bdh-commission-report.pdf p.5

xxxiii Co-operatives UK (2015) Co-operative Call to Action 2015: Strengthening the economy through self-help and mutual aid http://www.uk.coop/sites/default/files/uploads/attachments/call_to_action_2015.pdf

xxxiv Co-operatives UK (2015) Co-operative Call to Action 2015: Strengthening the economy through self-help and mutual aid http://www.uk.coop/sites/default/files/uploads/attachments/call_to_action_2015.pdf p.9

xxxv Co-operatives UK (2015) Co-operative Call to Action 2015: Strengthening the economy through self-help and mutual aid http://www.uk.coop/sites/default/files/uploads/attachments/call_to_action_2015.pdf p.10

xxxvi Co-operatives UK (2015) Co-operative Call to Action 2015: Strengthening the economy through self-help and mutual aid http://www.uk.coop/sites/default/files/uploads/attachments/call_to_action_2015.pdf p.10

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