Co-operative Bank donates £20,000 to emergency appeal for co-ops hit by natural disasters

Devastation on the island of Jost Van Dyke after Hurricane Irma

Anca Voinea reports, in the Co-operative News, that the Co-operative Bank has donated £20,000 to Co-operatives UK’s appeal fund set up to help co-ops in countries affected by the recent spate of national disasters. The World Disaster campaign led by Co-operatives UK aims to help co-operatives to recover after severe floods in South East Asia and hurricanes across the Caribbean devastated their communities.

Co-operatives UK’s appeal will channel funds through the International Co-operative Alliance to enable long-term support to reach co-operatives in affected countries. The emergency fund will be distributed to co-ops on the ground in these areas in order to allow them to rebuild. The Bank’s donation will be split equally between co-ops in the Caribbean and South East Asia.

Liam Coleman, chief executive at the Bank, said: “The recent natural disasters in Asia and the Caribbean are a human tragedy with lives, homes and livelihoods lost as a result of the devastation. Our donation, along with those from the wider co-operative movement, will help those communities who need it most – by giving long-term sustainable development to those co-operatives who play such an important role.

“As a bank that is defined by its values and ethics, our co-operative heritage and on-going commitment to the co-operative sector is vitally important to us and we hope this donation can make a real difference to co-operators who are rebuilding after recent events.”

Ed Mayo, chief executive of Co-operatives UK, said: “The floods and storms are devastating the lives of millions of people. We know that co-ops offer a vital tool for people to rebuild their homes and livelihoods together. We are encouraging UK co-ops to donate what they can to this emergency appeal to support the development of co-operatives that will aid long-term sustainable reconstruction. This is people-to-people support.”

Donations to the emergency fund can be made by contacting Co-operatives UK, emailing finance@uk.coop indicating the amount organisations wish to donate and their preference to contribute to development in south-east Asia or the Caribbean.

 

 

 

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Co-operative & Community Finance collaborates with other funds to develop community food and farming businesses

In March, at the Responsible Finance conference, Co-operative & Community Finance won the Citi Microentrepreneurship Award for Effective Partnership for its work with the Just Growth Fund, which supports businesses in community food and farming. Tim Coomer, CCF’s Business Development Manager referred to collaboration with Funding Enlightened Agriculture (FEA) and Esmée Fairbairn Foundation, which has unlocked grant, loan and social investment for this work.

Co-operative & Community Finance has made loans to four enterprises via the fund:

Bread Matters notes that in 2015, Scotland produced over one million tons of wheat, most of it sold as animal feed, to distilleries or as ‘biofuels’. As the country’s breadmakers rely on wheat imports, Bread Matters have searched for more nutritious bread wheats, suitable for low-impact farming. Scotland the Bread sells this specialist grain and flour and runs bakery courses for community groups.

Agriculture and food processing account for 18-20% of UK annual greenhouse gas emissions, so reducing the distance between field and plate, and limiting the use of fossil fuel-dependent inputs and the energy intensity of processing all make sense as part of a joined-up carbon reduction strategy.

The cost of diet-related ill health in Scotland is soaring, and if people, especially those on modest incomes, the old and the very young, are to be better nourished, there has to be an accessible and affordable supply of appropriate food. Local bakeries can supply fresh, properly fermented bread to nearby customers, without the synthetic additives deemed essential for long-distance loaves.

A Community Benefit Society will be set up to ensure that this work is focussed on people not profit.

The vital importance of ‘fair trade’ is stressed

Arrangements between farmers, millers and bakers should ensure equitable rewards and honest prices that also allow for the variability of the weather which affects grain quality

Scotland the Bread: an ethical investment

 

 

 

 

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‘How can West Midlands councils build community wealth?’

In celebration of the Co-op Party centenary this event is an absolute must for all those interested in transforming the West Midlands region by reorganising local economies and supporting communities to help themselves.

                                       First outing at the 2017 Durham Miners’ Gala

Lucy Seymour-Smith writes:

In times of austerity, services, organisations and communities are being starved of the funds needed to survive and grow.

We cannot regenerate or communities by relying on large organisations who can, and do relocate according to their own financially driven agenda.

Instead we need a new approach to regeneration framed around co-operative values of self-help, participation, social responsibility and democratic accountability that is led by organisations that have a genuine long-term stake in our communities.

Panel speakers include:

Liam Byrne MP

Claire Campbell, UNISON Head of Local Government

Anna Birley, Coop party policy officer and Labour/Coop Party Cabinet Member in Lambeth

                                Thursday 14th September, 5.30 for 6pm start.

UNISON Regional Office, 24 Livery Street, B32PA (next to the Old Contemptibles and opposite Snow Hill Station)

                                       *Spaces limited so sign up quickly*

                                                 nibbles and networking

https://www.eventbrite.co.uk/e/how-can-west-midlands-councils-build-community-wealth-tickets-37093770466

 

 

 

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The Co-op Bank rescue plan

Earlier this month Save our Bank updated its 10,000 supporters – 1,500 of whom have become members of the Customer Union for Ethical Banking:

At the end of June the Co-op Bank announced that it had reached agreement on a capital raising plan, “to secure the long-term future of the UK’s leading ethical bank”. The bank’s announcement is here [PDF].

The deal – and bear in mind it’s not formally agreed yet – means the bank will raise £700m in capital from its existing investors, principally US hedge funds, and that the Co-operative Group’s stake will fall from 20% currently to under 1%, with the relationship between the Group and Bank reaching a formal end by 2020. £250m of the total will be raised through selling new shares, and the remainder through investors agreeing to swap their bonds for shares. The bank will also have a separate pension fund from the Group as part of the arrangement.

How does the deal measure up against our aims?

Our campaign was established with two main aims – to make sure the bank sticks to its ethical policy, and to help it ultimately return to cooperative ownership. This deal is clearly a set-back for the second of those aims. The bank’s cooperative ownership is being reduced to next to nothing. This means that the Co-op Group will lose the right to appoint a director to the bank’s Board and Values & Ethics Committee, that the right of bank customers to become members of the Group will end, and that the Group will no longer market the bank’s products. But the impact of this from a customer point of view may not be that significant. While the Group’s stake made the bank “20% cooperatively owned” in theory, in practice the bank was managed independently of the Group, with no clear channels for Co-op members to try to make or influence decisions at the bank. (In fact we think we’ve had much more influence over the bank as a group of organised customers than we could ever have had through the Group’s democratic channels.) There are upsides as well. The bank’s ethical policy does not seem to be under threat from this deal. We think it would have been had it been absorbed by a larger bank, as seemed likely earlier on in this process. The bank is independent, and we hope the deal will secure its long-term future as promised. We’re also mindful that the hedge fund owners are not in this for the long-term; they will want an exit at some point, and a return to cooperative ownership must be on the table when that time comes.

The Co-op Bank should emerge from this process with less debt, and with a stand-alone pension scheme, making it a more attractive investment for cooperative capital. With shares in the bank at a low price, this would be a good time to move forward with our plans to build a new cooperatively-owned stake in the bank, through the cooperative Customer Union. But we also need to see how the Co-op Bank plans to live up to its commitment to support cooperative values after it severs its links with the Co-op Group.

Co-operatives UK has spoken, and determined that the bank can continue to use its current name, despite the further drop in cooperative ownership. Co-operatives UK has criteria for non-cooperatives like the bank using the ‘Co-operative’ name, and these are not related to ownership. Although it seems jarring for the bank to keep using the name “The Co-operative Bank” while it is not a cooperative (and never has been, in the strict sense), the name can be seen as reflecting its role as a bank for the cooperative sector. Given the bank’s history, its support for cooperatives, and its position as the largest provider of financial services to cooperatives, this is legitimate, although the bank needs to do more to show how it supports cooperative values and principles in light of the ownership change.

What does this mean for the Save Our Bank campaign and the Customer Union? 

As we said at the start of this update, this deal is not yet done, and depends on the agreement of bondholders as well as the success of the new share issue. Once it is complete (assuming it succeeds), we’ll urgently seek a meeting with the bank to ask for more details about how it will preserve cooperative values after its break with the Co-op Group. We want to see the bank develop a plan to grow cooperative ownership when and if the hedge funds sell up, and we want to work with the bank on ways for customers to have a real say at the bank.

 

 

 

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Shadow Chancellor: Co-operative Ways Forward conference

“Co-operatives should, I believe, play an essential part in the economy of the future” 

Edited extracts, added information and links (full text here).

John McDonnell pointed out that wealth is more concentrated now than it has been for a century or more, social mobility has dwindled, financial legislation is being unwound and serious attempts at scrutiny scrapped, just a few years after the catastrophic crash that was the bankers’ responsibility.

A succession of governments promised that by unleashing markets, governments would unleash opportunity and creativity. This approach promised new freedom for individuals, free from the dead hand of the state – a “shareholding democracy” would arrive through privatisation. But the promises turned out to be illusory.: today, share ownership by individuals is at the close to the lowest level ever recorded. Just 12% of shares are owned by individuals in the UK, down from 28% in 1982, and pension funds own only 3%. 

The co-operative tradition 

We must look elsewhere. There is a long labour movement tradition of decentralisation and grass-roots organisation, stretching from RH Tawney, GDH Cole and the guild socialists, back to the Rochdale Pioneers, the Society of Weavers in Fenwick, Ayrshire, and even further back to the radicals of the English Civil War.

The expansion of co-operatives in Britain since the crisis, matching developments across the rest of the world, shows the potential. There are now more than 7,000 independent co-operatives throughout the UK, contributing £35bn to the economy. Co-operative businesses are more stable. Whilst only one in three new businesses makes it through the difficult first five years, four out of five co-ops do.

Preston, inspired by cooperatively run communities in Cleveland, Ohio and the world’s largest co-operative group, Mondragón, in the Basque region of Spain, has developed an extensive programme, working with the Centre for Local Economic Strategies thinktank and an EU network of cities that face similar challenges. Major local employers and buyers – so-called anchor institutions, like the University of Central Lancashire, are driving through a local programme of economic transformation. By changing their procurement policies, these anchor institutions were able to drive up spending locally. They’re looking to shift a proportion of the joint council’s £5.5bn pension fund to focus on local businesses, keeping the money circulating in Preston. And the council is actively seeking opportunities to create local co-operatives as a part of local business succession, working with the local Chamber of Commerce. The aim of the Preston Co-operative Network (includes video) is to sustain high quality local employment, by giving the chance for workers to keep a business in local hands. Read more here. There has been interest in this programme from other councils, including Birmingham, Rochdale and Sheffield.

The great majority of people pay their taxes because they know taxes sustain the services we all need. It’s part of what makes a good, functioning, fair society. Yet we have large corporations and the super-rich apparently viewing tax payments as an optional extra. That can’t go on. Ultimately, it undermines the public services we all need – and forces the burden of taxation onto people less able to carry it. State spending is not the answer to everything: there are clear limits on what can be achieved here. But we can make the system work far better, and distribute the burden more fairly.

A fairer economy requires a fairer tax system. The tax system will be re-examined and simplified so it is fairer to everyone and encourages the growth a fair and prosperous economy, taxing assets in an economically efficient way. 

Co-operatives, like other small businesses face real difficulties in getting the funding they need from high-street banks

We’d work to bring about the conditions for a flourishing of co-operative entrepreneurship. No other major developed economy has just five banks providing 80% of loans. We’d look to break up these monopolies, introducing real competition and choice. Regional and local banks, prudently run and with a public service mandate, have to be part of the solution here. With consortium co-operatives providing an effective means for new businesses to share and reduce costs, we’d look to support these at a local level, working with local authorities, businesses and trade unions. Italy’s Marcora Law, supporting employee buyouts and providing matched funding for those seeking to establish co-ops, is a model worth considering. 

The Tories have offered a “Right to Buy”. Labour would seek to better this. We’d be creating a new “Right to Own”.

McDonnell concludes:

“We will look into the recommendation in Graeme Nuttall’s report on employee ownership, creating a statutory right to request employee ownership and have proposals considered by their employers. We should look to extend this approach, offering employees first rights on buying out a company or plant that is being dissolved, sold, or floated on the stock exchange.

“And as our policy development process rolls out over the next few years we will ask ourselves time and time again how the practical, everyday-socialist principles of the co-operative movement can be applied. In an uncertain world where a laissez faire market approach continues to fail, co-operation is an idea whose time has come again. This is the start of developing a new, positive economic alternative for Labour – the new economics”.

 

 

 

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Locally based, small-scale social care co-operatives

Last year the subject of social care and the way forward offered by the co-operative model was considered in this column:

“The care system is in urgent need of reform. Private companies profiteer, whilst older people, (and all) who rely on social care and the staff that deliver it, pay the price. The market in social care services is broken – incentivising a race to the bottom on quality and workforce conditions, a lack of accountability, and de-personalisation of services”.

Could the active membership and co-operative ownership of workers, service users, volunteers and family members rebuild public trust in services through a socially inclusive solution where the system of care is owned by the recipients?

It was surprising to find no mention of this sector in the Social Economy Alliance  post-election outreach (below) – but there were four passing references in its manifesto (above, left).

As Pat Conaty has frequently pointed out, in a growing number of countries co-operative models of social care are expanding; many will agree with him that these approaches can be further developed in the UK. More in this video.

Personal experience leads the writer to advocate that such co-operatives will provide optimum care if locally based and not large. Conaty finds that social co-operatives “celebrate and prove that small is beautiful, and do so through dynamic forms of democracy” He adds that most Italian social co-operatives have fewer than 30 worker-owners and less than 100 other stakeholder members.

A further search led to the website of Wales’ Social Co-ops Forum which has, as one of its aims, the encouragement and support for the sustainable development of local co- operatives. It was no surprise to find that David Smith was one of the founding members.

The writer has seen at first hand the advantages of co-operatives employing local people to give care in the home, rather than in a communal setting. They will have the same background as the person being helped and see him or her as a neighbour in need of help, to be treated with respect instead of indifference, neglect or – at worst – active cruelty.

The performance of larger, profit-driven companies can fall short, giving only a fraction of the care stipulated in contracts. If the individual scheduled to receive help is deteriorating mentally and unable to complain effectively it has been known for notes to be pushed through doors saying that carers were unable to gain admittance.

A local care provider would be far less able to ‘get away’ with such neglect; the neighbourhood, as well as ’the active membership and co-operative ownership of workers, service users, volunteers and family members’, would informally oversee the care, adding another dimension to that formally exercised by the co-operative.

 

 

 

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