What’s a co-operative?
For most of us, the first thing that pops into our head when we hear the word co-operative is the Co-operative supermarket or, if your studied History, the Rochdale Pioneers, but we probably don’t co-operatives much thought.
Co-operatives (co-ops for short) are businesses owned and run by their members on a democratic basis. Members are often employees but can also be customers, residents and other stakeholders.
Co-operatives offer a radically different model to conventional businesses, where ownership is typically restricted to an individual owner or institutional investors and strategic decision-making rests with a board of directors.
While the Co-op group is probably the most well known co-op probably the most well-known co-op. According to Co-operatives UK, there are nearly 7,000 independent co-operatives across the UK, working in all parts of the economy. Together they contribute more than £36 billion to the British economy.
Benefits of co-operatives
The Co-operatives UK website lists the following main benefits of co-operatives:
- Sharing ownership gives people a stake in a business they work in or buy goods and services from.
- Sharing ownership boosts productivity. According to Co-operatives UK, studies consistently show productivity is boosted because people are invested, emotionally and financially, in the business.
- Sharing ownership harnesses innovation. The structure of co-ops encourages the spread of decision-making throughout an organisation. Ownership gives an additional incentive for employees to contribute and drive improvements.
Wider social benefits of co-operatives as a vehicle for strengthening democracy
Personally, I would go further than the benefits listed on the Co-operatives UK website and say that co-operatives appear to present a credible means of transforming our society in two crucial respects.
I’ve been inspired by The American non-profit, Democracy at Work (especially their weekly podcast, Economic Update), which advocates for worker co-operatives as a way of bringing democratic control to the workplace. As an active political campaigner, I’ve always been disappointed by how under our current political system, democratic control effectively ends the moment we enter the workplace.
Recent high profile examples from the media industry show how undemocratic the workplace remains.
For example, in the United States earlier this month, Joe Ricketts, the billionaire owner of DNAInfo and Gothamist news sites abruptly decided to shut down the sites after journalists voted to unionise.
At the same time, here in the UK the sacking of the recently appointed editor of Gay Times over offensive tweets received significant media coverage. What received less media coverage, however, was the fact that the newspaper’s owner had only recently let go of all their journalists in the last re-structure, giving little or no notice to the affected staff.
In recent years, successive governments have been keen to stress that democracy is one of our ‘fundamental British values‘. If that’s the case, why doe we continues to accept that our places of work should be democracy-free zones?
On the same day I attended the Co-op Info Night, The Guardian reported that global inequality continues to rise, to the extent that the world’s richest 1% now own half the world’s wealth.
I believe co-operatives also have an important role to play in reducing inequality, both globally and within individual countries. I believe that if people had a say in how their organisations are run, we would not see the vast disparities in earning power.
I also believe that democratically-operated businesses would be more likely to make decisions that are good for jobs and long-term growth than traditionally-run businesses, where the pursuit of short-term profits eclipses other considerations.
Co-operative case studies
The Co-operative Info Night showed it’s possible to put your principles into practice and make a positive difference to your local area. It was also clear from listening to people’s stories how the actions of one co-operative can inspire others.
Birmingham Bike Foundry
Sean spoke about how he and some friends set-up Birmingham Bike Foundry in 2010 as way of working in a business without bosses where decisions are made democratically.
The business, which now has 2.5 full-time workers, aims to promote promote cycling as an affordable means of transport. It does this by refurbishing and selling donated bikes at affordable prices, repairing bikes and selling accessories and running a ‘tool club’, a subscription-based service which allows people to learn how to repair their own bikes in a social environment.
Sean and the members of the Birmingham Bike Foundry are keen to prevent the gentrification of Stirchley and the property speculation that goes with it. They want to find ways of bringing land into common ownership, beyond the reach of property speculators, so that new co-operative businesses can flourish in South Birmingham.
Leo from Autonomic, a newly formed technology co-operative which is working towards formal registration, spoke about how he and his co-workers were inspired to establish Autonomic in response to growing concerns over the dominant ‘surveillance capitalism’ technology model, where users’ privacy and security rights are compromised so that companies can commercially exploit personal data.
Leo spoke about how his co-operative uses exclusively free and open source software, as opposed to proprietary solutions developed by tech giants such as Apple and Microsoft. He also spoke about how he’s part of CoTech, a network of 20+ technology co-operatives.
Just Film for a Fairer World film co-operative, Central England Co-op Gardening Club and Birmingham Co-operative History Group
Sue explained how the Just Film for A Fairer world film co-operative, which receives financial support from Central England Co-operative, puts on environmental and just ‘films that make you think’ every month of the year. The group currently meet at the Irish Centre in Digbeth. Membership costs just £12 a year and members get a say in selecting the film programme.
Birmingham Co-operative Housing Services
Carl from Birmingham Co-op Housing Services explained how the housing association currently has approximately 1, 200 homes in Birmingham, mainly in Small Heath, Handsworth and Balsall Heath. The association is also working on plans for low carbon, eco-friendly housing in Redditch.
Carl explained how the co-operative structure encourages residents to play an active role in managing their homes and communities and said that most residents are keen to get more involved in decisions that affect their lives.
Central England Co-operative
Richard, A board member of Central England Co-op, explained that they were a large regional business with nearly 9,000 colleagues (staff). The group currently operates 250 foodstores, 100-plus funeral homes, filling stations, post offices, travel branches, florists, opticians, masonry outlets, a crematorium and a coffin factory.
Central England Co-op is a consumer co-operative. Customers can sign up to become a member. In return, members receive a share of the profits, the chance to apply for community benefit grants known as the Community Dividend Scheme, Members Groups (such as the Central England Co-op Gardening Club) and have their their say on how the business is run.
Richard explained how the group continues to face challenges around meeting its historic pension obligations whilst still delivering on its core mission to provide good food and services at fair prices. Despite the challenges it faces, Richard is proud of the fact that 2% of the group’s surplus goes to supporting educational and community causes, and that every £1 invested by the co-op generates £20 of social benefit.
Nancy from Loaf explained how Loaf, a popular bakery in Stirchley, was first established by ‘Tom the Baker’ as asocial enterprise. The business consists of a bakery and a cookery school, with the cookery school subsidising the bakery. The business now has around nine members/staff.
Nancy explained how through contact with Birmingham Bike Foundry and others Tom and the staff decided they wanted to transition to become a co-op. (For now), the business remains a limited company. What’s very different, however, is the fact that the staff collectively decided that everyone should be paid a flat rate of pay, which works out at £9, around the Living Wage.
While Nancy said she finds Loaf and finds it an exciting and rewarding place to work, she was also quick to recognise they are still working out their business model. A particular challenge for the team is balancing operational demands with making time for planning and developing the business.
Kieran from Artefact explained that he’d been inspired by the example of Loaf and Birmingham Bike Foundry and was in the process of converting the business, which until fairly recently was trading as P Cafe, from a traditional capitalist model to a co-operative business.
Kieran spoke about the importance of learning from each other and leading by example to show others that it’s possible to run successful businesses along co-operative lines.
Gung Ho housing co-operative
Established by group of students including Sean from Birmingham Bike Foundry in 2009, Gung Ho housing co-op is a terraced house in Selly Park neighbourhood of Birmingham. The students were motivated by a desire to find affordable and secure accommodation and to avoid being ripped up by dodgy landlords. You can read a good account of the co-op’s development in The Guardian.
Catherine from the co-op explained that the co-op consists of five members who all live at the house. The co-op is ‘fully mutual’, meaning all members have an equal stake in the house and how it is run. The house is owned by Gung Ho as a company rather than the individual tenant/members. This means that tenants do not own a share of the mortgage and could not profit personally by selling the house, or be held liable for a the co-op’s liabilities when they leave.
Membership of the house is linked to Radical Routes, a UK-wide federation of housing co-ops, worker co-ops and social centres. Radical Routes administers loans to co-ops to help them to buy properties and other assets such as solar panels, provides financial and legal advice to get co-ops started and support to keep them running. Members of the house are expected to contribute to the work of Radical Routes.