Draft National Co-operative Development Strategy A

Response by Members of CDBs Forum

Comment

The DNCDS makes no reference to the scoping report and discussion documents here http://www.uk.coop/what-if/resources, nor to https://whatif.coop/, which together are presented to the public as The National Co-operative Development Strategy consultation. It is not clear how or if these online resources have contributed to the development of the strategy.

Good to clarify this. There are a number of building blocks that have fed into the draft strategy, including these, but others too, including the sessions at Co-op Congress in 2016 and the Co-operative Census. We can make reference to all of these, but not necessarily in the strategy document itself.

The Scoping Report set the definition of co-operative development and set the process for developing the strategy, which we are following.

Our aim has been to try to develop more of a short and inspiring document than a longer and more discursive paper with footnotes and references and designed for the co-op sector experts. There may be a case for something that does that as well, sitting alongside the strategy itself but that has not

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been our focus to date.

Some interesting insights by Jim Brown and Alex Bird (https://www.uk.coop/sites/default/files/uploads/attachments/consultancy.coo p_discussion_paper.pdf) in particular have been completely ignored.

Yes. There is a lot of material in all of these resources, from proposals for salary caps to new co-op capital markets, as well as in another discussion paper by John Mulkerrin and in posts on the www.whatif.coop blog site. Discussion Papers were for discussion. But they have not been ignored – it is just that there is far more in these and on the blogs than can be referenced or made to add up together in a short strategy document.

Our aim has been to use ideas in this to stimulate dialogue and content - and to that extent they are part of the strategy – and in particular to feed into a participatory process at Congress, which helped to refine the priorities.

The link to www.uk.coop/takeaction is not actually a hyperlink and in any case leads to a page not found.

Thanks. The consultation had not opened so this link was not live. See www.uk.coop/doit .

CDBs at Future Co-ops in January were getting an earlier viewing of the strategy overview so that views could be fed in and reflected in the strategy before it opened for wider consultation. We have also made some early changes anyway to the materials based on some of the comments here.

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The concluding Pathways to a participatory economy – illustrative targets section is only loosely connected to the strategy – the targets sit there like pies in the sky.

The DNCDS is not actually a strategy. It gets as far as proposing some broad and long term aims but does not translate these into specific objectives that are in any way SMART. Nor does it propose a way in which the stated aims can be translated into achievable objectives and so it is actually no more than an aspirational discussion document.

Yes, we should look at the targets though, to try to tie these in more. We have made some small changes for the consultation version, following this prompt – thank you.

But there is also a balance to strike here, because it is quite right to say that it is not a conventional hierarchical strategy because we don't have the luxury of pointing the finger for every item at who will do what by when and having the SMART targets that follow.

The sector doesn't work collectively in this way. Take for example the recommendations in the ‘2 to 20’ Action Plan from February 2012 – perfectly SMART …but there was little buy-in.

There are different types of strategy, from lean and agile to corporate and business planning, and debate around which way to go. Not everyone believes in SMART targets. What we have set out to do is to focus on a core purpose - setting a clear destination, somewhere that people want to go, with milestones to check progress and the offer of help.

This approach was set by the Expert Panel in May 2016 – that the purpose of the strategy is “to create a fresh, simple and stimulating framework to encourage and enable action

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supportive of co-operative development across the sector.”

The document and the online resources are remarkable in that they make little or no reference to co-operative development bodies or to professional co-operative development workers.

The co-operative development movement is not credited in the DNCDS as a “Key driver of success to date”. “Specialist networks... in key sectors” clearly excludes generalist CDBs.

We should be looking to acknowledge those who make such a key contribution, yes.

The only reference to co-operative development in the DNCDS is an exhortation for individual co-operative members to “Take action together to... be a partner for... specialist co-operative development bodies”. It is not clear what this actually means.

We can look at the wording of this, yes.

Co-operative development is not mentioned or reflected in the Pathways to a participatory economy – illustrative targets section. How is it possible for the conclusion of a co-operative development strategy not to include the word “development”?

Would CDBs and CDWs have no role in the implementation of a CD strategy?

The whole strategy is about co-operative development.

We can look at the use of the word ‘development’, but it may be helpful to flag up that the definition of co-operative development we have been working to from the outset is wider than may be used by ‘CDBs and CDWs’. The core business there tends to be business advice, generic or specialist, typically face to face and it is easy to assume that a co-op

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development strategy is therefore based on advice of this form – but that is only one of the important elements.

The definition of co-operative development is “the process of growing and advancing businesses owned and run by and for their members (in line with the ICA Statement on Co-operative Identity).”

Just to illustrate, the Expert Panel has looked at interventions

for co-operative business improvement across the following matrix:

Information

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Generic information Specialist information Awareness raising and promotion

Skills development

Education and learning Training Peer learning, events and support networks

Policy action

Culture and behaviour change Regulatory frameworks Taxation and related incentives

Advice and support

Advice of a standardised form Specialist or situational specific advice, consultancy Coaching, counselling and mentoring Access to technology or infrastructure Access to export markets

Multi-intervention

Local interventions, such as business incubators, accelerators and science parks

Sector interventions, such as co-operative federal networks

Social entrepreneurship programmes, including grants,

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training and access to social investment

Quality

Quality standards and accreditation schemes Third party assurance Benchmarks Self regulatory codes

Finance

Equity investment Investment brokerage

Innovation programmes

Intrapreneuring Open innovation, challenge prizes and networks Open data Business model development

Enterprise co-operation

Cost-saving, purchasing co-operatives supply chain co-operation.

The section heading Do it ourselves – a National Co-operative Development Strategy gives the game away. The strategy is based on the premise that co-operative development services are best delivered by workers in trading co-ops and does not

This is not the premise or the model we are working to. Co-operatives operate on the basis of self-help and mutual aid. Peer learning has a place in that context but it should be seen as a complement rather than as a competitor to professional

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recognise that they can only ever provide limited support to other co-ops.

advice.

This would appear to be an attempt to eliminate the professional co-operative development sector. That would be a tragedy for the co-operative movement in this country. As CDBs we have to declare an interest but we are alarmed at this and that we are actually being asked to design our own redundancy.

This is absolutely NOT the intention and it is hard to understand where this conspiracy thinking could have come from!

We recognise that there are problems in the CDB sector, including lack of new entrants, patchy coverage and lack of capacity at scale, but these are surely challenges for a CD strategy to address rather than a reason to run down the entire sector.

Rather than trying to eliminate the CDB sector the strategy should be to find ways to unleash its full potential.

There is no intention to run down the CDB sector. There are these challenges, and others such as knowledge transfer in the context of a loss of capacity over time. Over time there has been a shift in resources away from the CDB sector – whether local authority or state programmes – and this is perhaps the underlying challenge. There has been work within the CDB sector to organise in new ways and to innovate and there has been efforts by Co-operatives UK to bring new resources into the sector, with CDBs as key partners for delivery. Both are important.

It is worth saying that other sectors have some of the same troubles as the co-operative sector when it comes to this challenge. Business support interventions may be focused on the enterprise or on the entrepreneur. For mainstream

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business, there has been a shift in government activity away from the former and towards the latter. This has included the ending of government funding for cross-sector generic business advice through face to face channels.

Some of the same issues are faced by federal members of Co-ops UK – Plunkett, Supporters Direct and others – and it makes complete sense to look at growing from what we have. In iterations of the strategy, we have built on what we have heard, to recognise and strengthen what exists, and it sounds like it is the same signal we should be giving for all, federals and CDBs alike.

A fundamental problem is the failure to distinguish between the development of co-operatives and the development of co-operation. The document purports to be about the former but is actually about the latter. More street parties would help with community co-operation but would not be enough to help a community to take over their pub – it could only get them as far as the first rung. In fact, co-operation can be to the detriment of co-operatives: too much fluffy co-operation in the wrong direction and you will be trampled all over.

There is no mention of street parties.

The focus of the strategy is on co-operatives and on cultures of co-operation in line with Principle 5.

A barrier to the growth of the co-operative sector has been a lack of demand among people to start co-ops, and as such it seems right that awareness raising and championing of co-ops among the public and potential entrepreneurs is part of the strategy. See the actions intended to help deliver on the first target: https://www.uk.coop/developing-co-ops/your-views-

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national-co-operative-development-strategy

The co-op sector has been insular and defensive at times, rather than engaging in wider trends. The promise of platform co-ops is to combine sharing economy with sharing ownership – it seems best to engage, but to engage critically rather than ignore.

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Start with the seven Co-operative Principles. Principles 1-5 and 7 specify how any co-operative enterprise should operate and be constituted. It is Principle 6 that creates the co-operative movement by joining individual co-operatives together. Therefore the root of the problem is a failure of co-operatives to implement Principle 6 in such a way as to engender the sustainable development of new and existing co-operatives and to build a co-operative economy.

This is not necessarily the fault of the individual co-operatives. The ICA guidance notes for Principle 6 state only that “Co-operatives serve their members most effectively and strengthen the co-operative movement by working together through local, national, regional, and international structures”. There is no reference here to any obligation specifically to support co-operative development and it puts no obligation on local, national, regional, and international structures to provide or facilitate co-operative development services.

The fact is that when a co-op starts up it typically has only the resources to implement principles 1-4. It is only when it reaches a level of maturity and wealth that it can begin to think about its obligations to Principles 5-7. Even then, Principle 6 is usually interpreted to mean “Join CUK and your local RCC and try to

The Values and Principles of the Statement of Co-operative Identity are at the heart of what it means to be a co-operative. The interpretation of these does evolve and change over time, as we are a democratic social movement, but it is a mistake to think that issuing a new prescription from the ICA or Co-operatives UK is a simple solution or simple to achieve with the consent and unity of the movement that is then affected by it.

The example of the push to highlight sustainability in the Principles is a case in point. There are signs of progress in practice, but a ten year campaign led out of the Latin American co-operative sector has not led to a direct change in the Principles. It is right that these things should be debated, consulted on and should change over time, but it is not a practical strategy to make that change the starting point for other things to happen.

The idea of an accounting system is a fabulous one on paper, but would it really work? Leaving aside the issue of consent and the assumptions it makes about the unity and willingness of the sector to do something like this, can’t some of the oldest co-ops learn – and therefore develop – from some of the newest? How would that be accounted for? As ever, you don't make a sheep fatter by weighing it, and the process of

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trade with other co-ops” and not much more beyond that.

So a co-op cannot contribute to any co-operative development programme until it has accumulated some reserves and even then it usually does not. But a co-op most needs to draw on co-operative development services before and during its start up phase and at critical growth phases, the former being exactly when it has least reserves and long before it can itself contribute to co-operative development. Therefore there has to be some kind of co-operative development account which co-ops draw from according to their need and pay into according to their ability to pay. It must be the job of the National Co-operative Development Strategy to set up this account and specify how it is to be managed.

weighing can sometimes get in the way.

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The aims of the strategy must be to:

1.Find a way for existing and especially mature and large co-ops to put resources into co-operative development on an equitable basis

2.Ensure that the structures and bodies responsible for the delivery of co-operative development are sustainable, regenerative, have sufficient capacity and scope and are quality assured

3.Find a way in which pre-starts, new starts, existing co-ops and co-operative buyouts, conversions and spin-outs can draw down appropriate development services.

A (probably overly) simple way of looking at it would be to say:

• 1 is a task for Co-operatives UK

• 2isataskfortheCDBs

• 3isataskforTheHive

• Integrating the whole and specifying how these tasks are to be carried out and resourced is the job of the National

This suggests that the key goal should be to win resources from mature and large co-operatives for the work of CDBs, that co-operative development is focused on advice and will be organised around CDBs (and not other partners such as federal bodies) and that there should be a portal for all this.

It is certainly true that there is a resource challenge for CDBs and that this is work of real value, but the current draft takes a wider view than this and it is not clear that narrowing it down in this way is going to be successful.

We can’t simply turn again and again to the retail co-operatives and larger worker co-ops to put money up, without doing more both to spread the load, with other large co-operatives, and to show the benefits. The CEH for all its good sides was also something of an embittered process for the Co-op Group from its delivery partners and we have to build the constituency for doing the right thing in terms of putting resources in. It is not a strategy simply to say that someone else should pay. We have to re-enchant those mature and large co-ops with what they can do in terms of co-operative development. Above all, we have to build the unity of the co-operative sector, rather than assume it – a point that was made at the start of the process in the

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Co-operative Development

Strategy.

It is only by taking an approach like this that a practical and detailed action plan can be drawn up.

Scoping Report.

The comments here perhaps also overlook the extent to which there are efforts to do this – and therefore how can we build on these? For example, the Hive is not a separate organisation, to be tasked with strategy. It is a programme that draws resources in from the Co-operative Bank that Co-operatives UK has championed, just as other programmes may do (and the risk is that it is sponsored by just one organisation, as the Enterprise Hub was).

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Because the draft strategy proposes an essentially amateur model of co-operative development it does not recognise that money needs to change hands when development services are delivered and therefore does not recognise that its task is to design a market for co-operative development.

This is not to say that there is no role for peer support between co-ops. There is and it should be recognised and facilitated but peer support alone can never deliver a comprehensive programme of professional co-operative development.

Implementation of a strategy for quality assured co-operative development must involve managing movements of money. The most practical way of doing this would be the establishment of a Fund for Co-operative Development. But because co-ops will typically draw from the fund before they pay much in, it will need working capital if it is to be functional from the start. Sources of that capital will need to be identified. Ideally, Credit Unions will help to facilitate this great project but there are other potential funders. Once the fund reaches a certain level the initial injection of cash can be repaid.

The Fund for Co-operative Development would also be used to support the continuous professional development of CDBs and CDWs.

We can look at this. There is no suggestion that we want an amateur world of co-operative development.

The draft strategy does not go into this, but it is helpful perhaps to look at the example of community shares, where this has been developing as a market, including the scope for specialist advice where required and with strict underlying quality standards to underpin this.

The market though needs to be structured around the needs of the users rather than the providers of advice and in contexts where external grant funding is unavailable, the primary source of resource will be the co-operative itself. Co-ops want to develop and they will need to value the interventions they can call on to support them in that regard. The users will want quality assurance, as you say, although in times past this has sometimes been resisted by some of the provider community.

There are some funds for the sector in play already, such as Co-operative and Community Finance, focused on recycling funds through lending, and it makes good sense, yes, to promote the Solid Fund as a way to build resources and the constituency for support.

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Increasing the level of investment in co-operative development should also include strategies for actions with government, LEPs, European and replacement investment, community shares, ethical banks and internal investment programmes like The Hive and CEH.

In principle, yes, but there is a level of detail here – like the unlikely state of the CEH – that a high level strategy is not the place to go into detail on. The core question is whether we are organizing effectively as a sector to engage with potential sources of capital for the sector, whether at local, regional, national or international levels.

When writing strategy we should also draw on evidence from Canada, United States, Asia, Europe and elsewhere where there are long and interesting histories of investment in the sector and development of regional co-operative economies. The Mondragon model of profit share pooling is a good example.

We have commissioned and published a review of international practice on co-operative development as part of the strategy development.

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British people generally lack the skills to work together co-operatively without an authority hierarchy telling them to and so co-operatives do not start up and grow naturally here. Italians, Basques, the French, Japanese and Argentinians do have these skills and they overcome their problems with co-operative working because it is natural to them. Development workers and practitioners in this country routinely rescue and repair co-ops that had no prior help in this area – they stumble and disagree and the business suffers.

Its not difficult for British people to acquire these skills but they are loathe to make a start on it because we are conditioned from an early age to fear these 'people issues' and prefer to hide behind hierarchy, often masquerading as a co-operative. If you ask co-op members what are their priority needs they do not say these things until the whole organisation is bogged down in conflict (chronic and acute) and then they say “Save us please, somebody”. They needn't have got into that mess at all if we had co-op development strategies that helped build co-operating teams before they tried to run businesses.

We need to increase levels of education about co-operatives and co-operation to include co-operative history, co-operative economics, co-operative social practice, The Co-operative

Agreed. There is a reference to the scope for a campaign on the co-operative option, in line with some of what is explored here, plus reference to joining in campaigns to inspire co-

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Party, co-op member education etc. in The Woodcraft Folk, schools, colleges, universities, adult education, co-operative businesses, the press and elsewhere. Reaching out to young people and opinion formers in particular are vital strategic objectives.

operative action.

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Recognising that the original intention of the Rochdale Equitable Pioneers was to create a just and equitable society using co-ops as a tool, we should develop regional and sectoral collaborations, not as a brand but as a movement working towards a new economics, by:

• Working closely with social enterprise, mutuals, community businesses, trading charities, trades unions, local authorities and others

• Grass roots market making, perhaps by developing co-operative versions of the Transition Network's highly successful Local Entrepreneur Forums

• Using new digital platforms as tools for true co-operation

• Unashamedly putting out the message that a new economics is possible and indeed essential for economic justice and taking control.

CDBs could have roles in these activities.

Agreed.

Another action to take is to put pressure on the ICA to extend the guidelines on Principle 6 such that co-ops globally are

This is a debate to have, but we may be better advised to build consensus around what can be done in the UK so that we are

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obliged to support co-operative development. This will facilitate and enable the building of sustainable co-operative economies at scale all over the world.

walking the talk.

A step further would be to comprehensively review the set of Principles as suggested here: http://www.thenews.coop/94300/news/general/time-to-extend-the-seven-co- operative-principles/.

It is good to debate changes to the Principles, but the draft strategy is not the place at this stage to load these into.

The Draft Strategy appears to have been written by people who have no idea what co-operative development is or how to write a strategy. Nevertheless, it is a good starting point for debate and for that we are grateful to those who have put work into it.

We will have to change the name of the Expert Reference Panel drawn from our members if so!

There is much more debate to be had and work to be done to flesh it out and it is important to maintain a positive attitude as we do this. We look forward to contributing further as the strategy is developed.

The intention of the consultation phase is to allow for input and development. What has been published is a draft only.

Ed MayoMarch 6th 2017

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