In political terms, 2016 was a momentous year. Co-operatives UK’s Policy Officer, James Wright, looks at the big things that happened for the co-op sector – the gradual development of co-operative approaches to care, important decisions on the regulation of co-ops and, of course, the challenges and opportunities posed by Brexit.
Care
Throughout 2016 Co-operatives UK has worked with partners in our Co-op Care Forum to identify, support and champion co-operative approaches to care and wellbeing.
The end of 2016 has finally seen the multi-billion pound funding gap for adult social care become established in the news cycle and recognised as a national emergency by government. For-profit providers are exiting the market in droves and already substandard provision is becoming increasingly inadequate and unreliable.
New models of organisation and delivery cannot in themselves mitigate the current funding gap. But some co-op care providers tell us they can stay in the market longer while retaining a more engaged and caring workforce, because their business model is about people not profit. What is more, co-operative approaches to care and wellbeing, which empower workers, users and communities, can improve safeguarding and enable people to be live healthier lives for longer. Thus a system which adopts co-operative approaches will spend money more efficiently and effectively for people.
When it comes to championing co-operative approaches to care and wellbeing the Welsh government has led the way in 2016 by funding ‘Care to Co-operate’, a programme which supports the development of new care co-ops. Some local authorities in England have shown an interest in this area in 2016, but overall too many remain fixated on a failing private sector and the rest of the UK has lagged behind Wales in embracing real change.
Co-op finance
We have thankfully seen off moves to impose financial promotions regulations on co-operative and community benefit societies. At the start of 2016 we saw a genuine risk that member capital in societies would inappropriately be subjected to a new regime for ‘social investments’. A concerted lobbying effort by some in the crowdfunding and social investment industries from 2014 onwards led to parliamentary and ministerial pressure for a full Financial Conduct Authority review, which duly came.
Co-operatives UK was particularly concerned by a narrative which portrayed member investment in societies as an exploitation of loopholes not open to other legal forms. In our corner of the policy world, the FCA review created a lot of excitement and no small amount of work, but ultimately concluded in October that nothing would change. Essential freedoms for people to pool capital to meet their own needs and aspirations have been retained, so long as we adhere to co-operative values and principles and comply with the Co-operative and Community Benefit Societies Act.
Investment in co-ops was given another potentially significant boost this year when the government confirmed bonds issued by co-operative and community benefit societies could be eligible for the brand new Innovative Finance ISA. This came late on, following the rapid mobilisation of Co-operatives UK members to apply pressure as the draft legislation was laid before Parliament. We’re very excited by the potential of the Innovative Finance ISA to help savers to invest in co-ops over the long term, and hope 2017 will see some key players in mutual and social finance come together to explore this further.
Brexit and beyond
The second half of 2016 has been largely dominated by Brexit. We’ve spent a lot of time analysing what leaving the EU could mean for our members, for our policy work, and for the prospects of a more co-operative UK. We’re approaching Brexit guided by three broad principles:
- Despite the Brexit workload for government, our basic policy needs must still be met
- Co-ops should not be put in a disproportionately worse position by the Brexit process
- The potential for co-ops to give people control and build a better economy should be harnessed
We’ve started working with our agricultural co-op members and government to ensure farmer co-operation is properly positioned in an emergent UK agricultural policy. Co-ops are a great way to make the UK’s farming and food industries fairer, more resilient and more productive, at a time of considerable uncertainty and danger.
We’re also taking a close look at the EU directives co-ops will need transposed into UK law through the Great Repeal Act.
More than anything, though, the political fallout from Brexit has presented genuine opportunities to advance our policy agenda, not least with the formation of a new government in Westminster which has a headline ambition to “create an inclusive economy that works for everyone”. On our own, with other members of the Social Economy Alliance, we’ve had opportunities to feed co-op ideas into the new Inclusive Economy Unit. As co-ops, we have a particularly bold and practical take on what a genuinely “inclusive economy” would look like and we’ve already begun marking government’s copy book from that perspective.
Right now there is genuine interest in how outcomes for inequality, opportunity, productivity and social cohesion are influenced by the distribution of ownership and control in our economy and society. We need to convince people that this focus is correct and demonstrate how co-ops can make a real difference to people’s lives.
