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Phone Co-op bows out, not with a bang but a whimper 1 May 2018

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“And so we had to destroy the co-op in order to save it” was what came to mind after the special general meeting of the Phone Co-op in Sheffield last Saturday.

Ben Reid, Midcounties CEO, addresses the Phone Co-op SGM

It was a remarkably unanimous act of collective suicide, with no fewer than 202 of the 223 votes cast in favour of the merger with Midcounties. It was a good result, but a sad one. The Phone Co-op has grown and excelled for 20 years, but now finds itself out of its depth.
The debate did not start well, with the first intervention being an all-too-minutely detailed account of billing problems at Co-operative Energy 3 years ago – until the speaker was shouted down by members impatient to get to the nitty gritty. But the nitty gritty never really came. I had been secretly spoiling for a showdown, a revelation of the folly of the outgoing board and interim CEO. But the crunch never really came, thanks to the sure-footed leadership of the new chair, Jane Watts (the old chair was detained for family reasons).
The meeting quite rightly asked for the results of the vote on the merger motion to be announced before the second vote was taken, and the 92% majority surprised me (and cost me a pint in a side-bet). I began to feel a little out of control, as if forces beyond my ken had been orchestrating this all along. We had not really got to the bottom of why and how our strategy had gone wrong, or even if it had. Maybe it was meant to be this way.
I regretted the absence of constitutional stickler Richard Bickle – but his expertise was not needed, since the meeting was a procedural marvel, with neatly numbered and perforated voting slips (and even a spare in case of an unexpected ballot) all superintended by Emma Laycock of Co-ops UK, who is standing in as interim society secretary.

A bit more clarity on the growth strategy

The second vote, to approve the growth strategy, was paradoxical. New CEO Nick Thompson said that the board had presented it again because it was “judicious and considered” and hadn’t been properly explained at the AGM in February. But what we got was the same strategy we had criticised first time round – and with very little elaboration. We had none of the risk analysis that Simon Blackley’s motion had called for, and if anything fewer figures. According to Nick Thompson, the investment, which will lead to a £700,000 loss this year, is covered by guaranteed contractual revenues, and to succeed we only have to reach 486 of the 53,000 target business customers. The ‘green shoots’ are already showing. As for risks related to the merger, it seems probable that those brought out in debate – drop in member involvement, less personal service, staff terms and conditions – have been addressed in the heads of agreement between the two co-operatives.
The good point about discussing the strategy again is that it is forward-looking. It balanced the agenda and put the merger into context. Otherwise we might have felt we were at a burial service. It can be argued that Midcounties will find it a helpful starting point, but it can also be said that it was precisely this strategy that precipitated the co-op into the loss of its independence. Ultimately the debate was futile since the board of Midcounties will have to take its own view on what path to take.

Hobson’s choice – but a good choice

The merger is something of a Hobson’s choice. If we did not merge, what would have happened? Probably we would have struggled on for a few more years before running out of cash and merging anyway – if Midcounties wanted us by that stage. So we voted it through, albeit with a significant dissenting minority – the tally was 136 in favour but with 50 against (73%).
Anyway the members followed the board’s advice, as helpfully set out in a letter mailed out just beforehand. The growth strategy has a much higher chance of success given the potential to cross-sell telecoms services to energy customers and vice versa. As for governance, Midcounties plans to enlarge its current Energy Panel into a Utilities Panel, on which two ex-Phone Co-op board members will sit – presumably two of the more recently elected ones. And of course by a supreme irony Vivian Woodell, the Phone Co-op’s founder, is a vice-president of Midcounties.
All that remains is a confirmatory vote, on a simple majority, to take place after the Midcounties AGM in Droitwich on 12th May. And that will presumably be a shoo-in.
The result is a good one for staff, for customers, and for the co-operative movement as a whole. Ultimately, we did what we had to do efficiently and with little drama – and it was precisely this lack of drama that left me with a sense of anticlimax.

For a more balanced report of the SGM see Miles Hadfield’s article in Co-op News.

Phone Co-op members demand clear limits to risk 6 February 2018

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I am now eagerly awaiting the decision of the Phone Co-op board following the decisions of the AGM last Saturday in Sheffield. The meeting, which was attended by 153 people – about 15 of whom were not members – voted overwhelmingly to support two motions critical of the co-op’s new growth strategy and asking for greater transparency and care with the members’ investment.

Overall the experience of the AGM was very pleasant: a convenient venue right opposite Sheffield station, a copious lunch served in an airy atrium, and a lecture theatre fitted with electronic voting equipment.

Even better were the two guest presentations: the first from Jean-Paul Flintoff introducing the 1 Million Conversations campaign. “A transformative conversation may only take five minutes,” he said, brandishing a mug designed to stimulate exactly such talk. I was disappointed not to pick up one of those mugs myself – I’m sure they’ll become collectors’ items. The second presentation was by Vivian Woodell (ex-CEO) and Dame Glenys Thornton on the plans of the newly-established Phone Co-op Foundation.

The meat of the meeting was however more serious, and concerned the whole culture and strategy of the co-operative.

Part of the solution to inequality?

I moved the first motion, which noted the apparent doubling of pay differentials to a ratio of 10 to 1. I alluded to my previous jobs where pay was much more equal – above all at Suma, which now has 162 workers and has practised equal pay for upwards of 40 years. I mentioned Wilkinson and Pickett’s 2009 book The Spirit Level, which correlates income inequality with a host of social ills from obesity to imprisonment. I said how much I admired the Phone Co-op’s balanced model of development, the way it cares for members, employees and the environment, and the impressive contribution it makes to the co-operative movement. “It is indeed the inspiring ‘better model for business and the economy’ that it claims to be,” I said. I called on the board to continue their commitment to honest and open communication about recruitment – and only 2 members disagreed with that, while 89 supported the motion.

The second motion was moved by Simon Blackley, who chaired the co-op for the first nine years of its life. The motion queried the ‘dash for growth’ strategy that had been briefly set out in the annual report. While welcoming growth, he felt that the upside of the plan was unrealistically ambitious, while the downside was downplayed. That downside has already absorbed a quarter of the co-op’s reserves of ₤1m, and risks eating into the member’s share capital of ₤7m. Seeing as this capital is withdrawable, retaining the members’ trust in the liquidity of the co-op is paramount.

A credible plan?

Interim CEO Peter Murley had already given much greater detail on the new growth strategy he has masterminded since his appointment in the middle of last year. His starting point is that the co-op is “A telecoms business with a co-operative USP, not a co-operative with a telecoms USP”. He believes that the co-op has underinvested in systems as well as in people, and that it must achieve critical mass or wither on the vine. This means achieving a sixfold increase in customers and targeting the business market, which is growing four times faster than sales to individuals. This turnround requires the co-op to sustain losses of ₤2.3m before reaping the reward of much higher profits.

All business plans follow this curve, so the question is whether it is a credible projection – and whether it is fair to risk the members’ investments without a more inclusive debate. In the 3 hours at our disposal, and even by overrunning for ¾ of an hour, debate had to be curtailed. But at the vote, 79 members supported the motion, with 12 against. Some members had had to leave by then, and at least one, attending by internet, reports that he could not vote.

These two reverses leave the board, and the new permanent CEO Nick Thompson, who takes up his post on 19th February, with a tough nut to crack. One solution proposed was that the coop could issue a separate class of shares to fund this investment. Then members would be clear about the risk they are sharing. I for one would buy some.

Video of the AGM: https://www.youtube.com/watch?v=tOw0qFOk3d0 (I am on at 2:44:40)

Community wealth building through anchor institutions 3 October 2017

Posted by cooperatoby in cooperative, social economy, Social enterprise.
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A report to the British Labour Party analyses the characteristics of different forms of ownership of businesses – co-operative, employee-owned, local, municipal and national. It proposes the creation of ‘Anchor Institutions’ to promote local economic development.

Download Alternative Models of Ownership at: http://www.labour.org.uk/page/-/PDFs/9472_Alternative%20Models%20of%20Ownership%20all_v4.pdf

Further information:
A description of the work on community wealth building developed in Preston in north-West England, as part of the URBACT ‘Procure’ partnership:

Community Wealth Building through Anchor Institutions, Centre for Local Economic Strategies (CLES) can be downloaded at: https://cles.org.uk/our-work/publications/community-wealth-building-through-anchor-institutions/

Visualising the interconnectedness of all things 15 January 2015

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Twitter just alerted me to the existence of Wikigraph, a brilliant tool which shows the shortest path between two Wikipedia entries – and all the other pages they and the intervening links connect to. Here’s how close Suma is to being a social enterprise:

Employee ownership stalling 15 January 2015

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EO in Europe 2007-14Employee share ownership is almost the other side of the coin from the investor-led type of ‘social business’, in that it addresses the third dimension of social enterprise – participation – rather than a company’s objective (social or not) or profit distribution policy.

It is based primarily on an individualist model and is conceived of as giving individual workers an incentive to work harder, by sharing the returns with them through the payment of dividends, thus increasing returns for investors too. But it can have a collective dimension, as in the case of ESOPs, where worker shareholdings are held and voted by an employee trust. It is also generally held to improve the efficiency of work organisation. There is some overlap with the social economy in the case of Spain’s 11,500 sociedades laborales, in which pubic authorities can invest for local economic development purposes.

Employee ownership has progressive intents in that it shares the fruits of labour more equitably, and also deters hostile takeovers (though it does not prevent corporate takeover as in the case of Britain’s bus companies). Many governments have therefore enacted measures to encourage it, and until 2011 it has been steadily growing. The European Federation of Employee Ownership (EFES) annual survey reports that in 2013 8.75 million employees 31 European countries held fractionally under 3% of company capital, worth in total €267 billion (an average holding of €30,000). However its latest annual survey finds that although in 2014 this total rose to €310 billion, the number of employee shareholders has now stopped:

For the third consecutive year in 2014, the number of employee shareholders decreased in Europe. This should be a warning signal for everyone. In fact, the number of employee shareholders in continental Europe decreased by 500.000 persons (-8%) from 2007 to 2014, while the number increased by 200.000 persons in the UK (+8%). These changes are clearly related to the regressive fiscal policies in many European countries, while in contrast, the UK chose to double the fiscal incentives for employee share ownership, considering it is a key element of recovery and an investment for the future.

Employee ownership is one the tools we need to transform the economy, so the reversal of this growth trend is worrying as well as surprising.

Whatever the definitional difficulties, social enterprise is building the future 14 January 2015

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Another excellent post from Les Huckfield, who traces the evolution (or degeneration) of the idea of ‘social enterprise’ in Britain since 1998, when Social Enterprise London was founded. the idea had collectivist roots but never succeeded in bridging the gap between the (democratic) cooperative model and the (more hierachical) voluntary sector/charitable model. Under New Labour the idea was transformed (or deformed) to include investor-driven enterprises. Under the Coalition it has degenerated to cover public service spin-outs majority owned by venture capitalists but misleadingly labelled ‘mutuals’. He concludes:

Public Service Mutuals, like Social Enterprise, are becoming a term of public derision, killing off what’s left of the cooperative and mutual idea.

The fatal loophole is the inclusion of the fatal word ‘primarily’ in the UK government’s definition of social enterprise:

A social enterprise is a business with primarily social objectives whose surpluses are principally reinvested for that purpose in the business or in the community, rather than being driven by the need to maximise profit for shareholders and owners.

The most interesting point is made by Jim Brown, who in 2003 suggested that it was not so much the government as the co-operative movement that was responsible for this dilution of principle. This is logical for co-ops, whose members do indeed have a right to a distribution of trading surpluses, in the form of a rebate or bonus related to their contribution to the co-ops business (e.g. as customers, suppliers or workers). But the loose way it was phrased also conveniently leaves the door open for distributions to investors of capital. If it was due to co-operative movement lobbying, then one would also have expected participation (if not full democracy) to have figured in the definition – but it is absent.

European parallels

The Trojan horse that was inadvertently let into the gates of social enterprise by the different visions of the co-operative and voluntary sectors might never have been born had Britain made the distinction that exists in Italy between co-operatives in general and social co-operatives. Although Italy introduced a legal definition of the social enterprise (impresa sociale) in 2006, in practice it is synonymous in most Italians minds with the social cooperative (cooperativa sociale). Italian social cooperatives can in fact distribute up to 80% of profits may be distributed, however interest is limited to the bond rate and dissolution is altruistic (assets may not be sold off).

The ambiguity over profit distribution has been carried over into the European Commission definition, which to its credit does include the criterion of participation:

The Commission uses the term ‘social business’ to cover an enterprise:

– whose primary objective is to achieve social impact rather than generating profit for owners and shareholders;
– which operates in the market through the production of goods and services in an entrepreneurial and innovative way;
– which uses surpluses mainly to achieve these social goals and
– which is managed by social entrepreneurs in an accountable and transparent way, in particular by involving workers, customers and stakeholders affected by its business activity.

This definition has the necessary virtue of inclusiveness, and is leading to a European convergence, with successive Member States introducing legislation and support programmes. However in practice, operationalising the criterion of whether trading profits are ‘primarily’ or ‘mainly’ reinvested is problematic, because most businesses (excluding asset-strippers) reinvest a large part of their profits. A minimalist interpretation, as adopted by the UK’s Social Enterprise Mark, sets the bar at 50%. This criterion was a major stumbling block in the way of the Commission’s mapping study, whose summary was published last November. This study (led by Charu Wilkinson of GHK with me as a member of its scientific committee) had great difficulty setting the boundaries, and adopted the criterion:

It must have limits on distribution of profits and/or assets: the purpose of such limits is to prioritise the social aim over profit making.

Les Huckfield deplores the loss of co-operative self-confidence, but there is an upside. Even today, most social enterprises in European are co-operatives. Yet beyond that, the social enterprise meme is attractive to many people with varied political views who see the evident malfunctions of modern capitalism. It offers them a way forward, and its broad appeal should be seen as a sign of its success and its potential. It is clearly making a very cogent criticism, and saying that corporate social responsibility is not enough. A new economic model is needed. Whatever the definitional difficulties, social enterprise is building the future.

European co-ops – who’s using them, why and for what? 18 February 2014

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SCEr illoAt the end of January I went to the final seminar of the SCEr project (conveniently pronounced Share in Italian). Luca Pastorelli of DIESIS had structured the seminar as an opera, but the ECS story seems to be more of a comedy than a tragedy. Nobody got killed, and the world carries on much as it did before.
The SCEr study was taking the temperature of that too-rare beast the European Co-operative Society. This legal status, part of the level playing field that the EU guarantees for the social economy, has existed since 2006, but few co-ops have opted to use it. Why is this? Is it any use?
Research by the ETUC and DIESIS found that in the last seven years, precisely 45 European Co-ops have been set up (there is no central registry, so there may be few more still undiscovered). Of these, a mere ten are operating with employees and a genuine business activity. The rest are shelf co-operatives or ‘UFOs’. (This is actually quite a high proportion, when you think that only 284 of the 2,052 registered European Companies (SEs) are trading actively.) There is no evidence that being an ECS confers any commercial benefits – indeed Co-operatives Europe considers that it will not be a useful tool unless and until it is simplified.

Advantages of the ECS

I set myself the objective of recording as many advantages of the ECS as I could, and some unexpected new ones cropped up. Here they are:
• when a new member joins, you don’t have to go to the bother of reconfiguring or dividing your share capital
• having one ECS is simpler to administer than having and association plus a trading company
• it enables you to exclude members if they break the rules
• it is symbolic of international values and activities
• it enables mutuals to operate in countries where it is impossible to establish one
• you can incorporate in the country where start-up assistance is best (what might be called “start-up shopping”
• it is easy to expand your brand to more countries
• it provides an upgrade path, within which peer support can deepen into common management
• it’s exciting and ’sexy’ (no one knows what it is but they are impressed)
• even if it’s not much of a practical tool for business, it enables cultural change
If there’s a disadvantage, it’s the teething problem that registration can take months, since national registrars are still unfamiliar with the beast. And, note, when the founder members gather to sign the papers, if you have a notary on the spot it can save months of delay.

Wonderful variety

They pursue a wonderful variety of activities. In the cases presented there was an interesting contrast between the pragmatic northern and image-conscious southern styles and motivations.
Euromovers, headquartered in Hamburg, enables 70 removals companies across Europe to manage transnational shipments easily. It merged its association and its share company into one ECS to cut bureaucracy.
Barcelona-based IES-MED promotes and manages transnational social economy projects across the Mediterranean, to give investors something to invest in. With 10 employees, it is working on 50 initiatives in 12 countries, and organises the MEDESS forum. It incorporated its ECS in France, where start-up help was better.
Fondo Salute was set up in 2010 in Milan and has the longest experience of being an ECS. Founded by French and Italian health insurance mutuals, it provides integrated healthcare insurance on a non-discriminatory basis.
Harmi operates a local currency in Pannonia, on the Hungarian-Austrian border.
Flandria was formed by Christian mutuals in Belgium and Poland to offer health shops and social pharmacies in Poland. It may expand to cover Romania.
Wecoop, in Reggio Emilia, is a co-operative among the 1,200 employees of the CCPL Group, through which they appoint a worker director. It gives its members a strong sense of identity, and includes members from Spain, France, Italy and Slovakia.
Ikastolen Elkartea organises Basque schools across the French-Spanish border.
The funniest moment came when Luca and Dorotea were asked why DIESIS itself is not a European co-op! Although in practical terms it is the epitome of European co-operation, it is constituted as Belgian co-operative with a social objective. This is because the regulation says that if you want to convert an existing body into an ECS, you have to have permanent offices in at least two countries – and they can’t afford that!

Worker participation

There is one issue which causes a lot of concern to lawyers – especially those who are drawing up the future European mutual statute – which is worker participation. The ECS regulation comes along with a directive which obliges ECSs with more than 50 employees to set up a European works council (below this threshold national consultation arrangements apply). It was devised in order to avoid ECSs being used as a ruse by globalising multinationals to escape this rule. The biggest ECSs have an underlying workforce of 2,000 – indeed some ECSs adopted the form precisely as a platform for involving them. The irony is they are mostly in fact employees of the member businesses, and no existing ECS has more than 50 employees. So the directive is a dead letter. The ETUC knows of no trade union agreements with ECSs – but there are no conflicts either. In any case the national registries seem to be registering ECSs without checking whether they comply with the worker participation directive.

Market it!

What can one draw from this? The purpose of the statute was that the co-operative identity could thrive in the Europe’s single market. But the framework we actually have derogates extensively to differing national laws, and thus lacks a real identity of its own. The (co-operative enterprise) dot-coop internet domain has proved a far better label, and it’s global to boot.
On the bright side, the framework seems to work in practice. The worker participation directive has not proved to be any hindrance. It seems that what is required is some marketing! Apostolos Ioakimidis, who looks after the ECS on behalf of the Enterprise DG, suggested that there might be a website along the lines of DG MARKT’s site on the European Company statue, and that would be a good start.

Trade unions and social enterprises – win-win solutions 16 February 2014

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The final panel: L-R Bruno Roelants (CECOP, Marcel Smeets (Social Economy Europe), Patrick Itschert (ETUC), Emilio Fargnoli (UNIEuropa), Allison Roche (UNISON) with Marina Monaco (ETUC)

The final panel: L-R Bruno Roelants (CECOP, Marcel Smeets (Social Economy Europe), Patrick Itschert (ETUC), Emilio Fargnoli (UNIEuropa) and Allison Roche (UNISON), with Marina Monaco (ETUC)

At the MESMER final conference last Thursday, the highlight for me – and many of the 40 others present – was the presentation by Bob Cannell of Suma Wholefoods, my old co-operative. He showed engagingly how 150 ordinary people can run a successful and very profitable business using a collective management system based on equal net pay and job rotation, dispensing entirely with conventional executives. They have no trouble living with the double qualité of worker and manager. Economists would say that a business of this scale in a commonplace industry – food distribution – couldn’t survive, so they must have got this wrong too, mustn’t they?
But why does such a radical business need a trade union? After getting the brush-off from the major unions, in 1998 Suma set up a branch of the Bakers, Food and Allied Workers Union (BFAWU) to which 80% of the co-op’s members belong. The union plays a valuable role in helping the co-operators to avoid exploiting themselves, mediates in cases of conflict (and not automatically on the employee’s side, either) and helps spread Suma’s progressive practices (6 months’ full maternity pay!) to other workplaces.
I regret to say that some of the other presentations were less enthralling – those from Spain in particular being an object lesson in how not to perform in public. Speed-reading one’s text from the podium is not the way to keep an audience’s attention. It’s a tribute to the interpreters that they managed to make any sense of it at all. I certainly didn’t.

Good practice snapshots

The conference gave, if not a comprehensive overview, then a range of snapshots of the different styles of employer-employee relations in Europe’s social enterprises – from the highly structured national social dialogue in Italy to the fragmented situation in Britain. One outstanding example is the 1,400-worker Formula Servizi in Forlí, Italy, where social dialogue has reduced labour turnover from 45% to 3% a year.
In France, as Emmanuel Verny from CEGES explained clearly, the social economy has introduced a 4th level of social dialogue, with five national agreements feeding down to 13 trade sectors.
The UK contribution started with a summary from me of the fragmented nature of the relationship between social enterprises and trade unions in Britain. Unionisation runs at 62% in the public sector but only 22% in the private and voluntary sectors. Nevertheless, as the Workplace Employment Relations Survey shows, unions still do play a significant role in protecting working conditions and pay.
Despite this lack of co-ordination, there are good examples of productive relationships between trade unions and the social economy – or at least there are with co-operatives (and their 100,000 employees). Other types of social enterprises (974,000 people according to the optimistic self-selected government definition), and the voluntary sector (765,000), have been much less concerned to build bridges. Perhaps this will change. It is noteworthy that trade union membership in voluntary organisations has been rising, as more of their workers worry about their futures. I think the employee ownership sector (130,000 employees) is a major missed opportunity for trade unions: by and large they have failed to engage or to maximise employees’ input into management.
I agreed with Derek Walker from the Wales Co-operative Centre when he said that successions are major opportunity for co-operatives. WCC, set up in 1983, is a co-operative which develops co-ops, and it is sadly still the unique example of a trade union initiative to convert threatened businesses to employee ownership, and to preserve indigenous enterprise. Its most celebrated success is Tower Colliery, closed by the coal board but reopened and run by the workers for a further 13 years.

Questionable public service spin-outs

Allison Roche spoke on behalf of the UK’s major public service trade union, UNISON, which has 1.3 million members, including 60,000 in the voluntary sector. The union is concerned that the so-called ‘public service mutuals’ which the government is setting up – sometimes without the consent of the workforce concerned – will be short-lived in the face of competition from large corporations. Though flexibility and ‘social innovation’ may bring some advantages, there is no evidence that service quality improves (see Apse’s Proof of Delivery). There is the threat of a ‘race to the bottom’ on working conditions. And there is no demand for such a transformation: she noted that a minuscule 0.2% of National Health Service staff have chosen to exercise their ‘right to request’ to spin off as a ‘mutual’.
The EU’s new public procurement directive contains an article (76a) which allows employee-owned spin-outs to be sheltered from competition for the first three years (see Allison’s presentation and the Local Government Lawyer’s commentary) – but the way it will be implemented requires close scrutiny. It does not apply to many public services (fire, police and probation for example), and may exclude worthy bidders such as charities.

Luca Pastorelli (DIESIS) and Marina Monaco (ETUC)

Luca Pastorelli (DIESIS) and Marina Monaco (ETUC)

Marcel Smeets of Social Economy Europe made the point that the financial crisis has become a crisis of trust, and it is the participative governance of social enterprises and trade unions that can bridge the gap. He quoted President Barroso in this regard: “it is precisely those European countries with the most effective social protection systems and with the most developed social partnerships that are among the most successful and competitive economies in the world”. In Allison’s view, the social economy is so fragmented that it is unable to negotiate, and needs to join together and build a partnership with the unions. This is the best way to ensure that externalisations really do create social value. “We have a lot of work to do,” she said.

Co-operative schools and best practice guidelines

Two good practices deserve mention. First, 600 co-operative schools have been founded in the last five years, and they adhere to a national agreement with the six unions involved.
Secondly, the TUC and Co-ops UK agreed a set of best practice guidelines on public service spin-outs last December. Its main recommendations are:

    • the workforce should be balloted before any spin-out, and trade unions should be recognised
    • governance of the new enterprise should be democratic, with membership open to all employees, where possible collective shareholding (thorough an employee trust) and with collective bargaining
    • tenders for externalisation should make social objectives clear, and should provide for an initial contract period of 5 years to allow the enterprise to get established
    • there should be an asset lock to prevent public assets being stripped by new owners
    • better employee involvement does not replace trade union representation, it is complementary to it

Trade unions should be on board the SBI

The MESMER event was graced by an unexpected contribution from Jean-Claude Mizzi of DG MARKT, one of the key people behind the Social Business Initiative. He noted that the SBI has now entered a “democracy phase” till after the elections, with the EESC making the running for the time being. The expert group GECES will be renewed in 2015, to the extent that the 44 positions for civil society will be up for reappointment (the member state represented being in the gift of governments). This set me thinking that the trade unions should put up a candidate. This would usefully broaden the range of stakeholders who are represented and whose opinions should be part of the mix.

Global grant in Puglia 29 November 2013

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During the 3rd Poverty Convention in Brussels this week, I speed-dated Antonio Spera of Confcooperative Puglia, who had come from Bari to explain how they use the ESF’s global grant mechanism to promote co-operatives. It is a pioneering example of how to improve the management of the ESF through partnership. 280 enterprises have benefitted so far.

Confcooperative PugliaPuglia’s Piccoli Sussidi (Small Grants) scheme aims to support “social, infrastructure and economic revitalisation actions which support the development of the third sector and contribute to integrated and sustainable growth and a better quality of life”. It does this by making grants of up to €35,000 and by investing in the capital of enterprises.
The first such scheme, worth €8.2m, was financed under measure 5.3 of the 2000-2006 ESF operational programme for Puglia. It was agreed just before the programme ended, and ran until 2008. To manage it, two co-operative funds – Fondosviluppo and APE (Agenzia per la Promozione della Cooperazione Sociale) – set up a ‘temporary group’ (Raggruppamento Temporaneo di Scopo – RTS).
The ESF provided €7.55m of the fund, which has financed the full cost of 3 actions:
1. consolidation of organisations working in work and social integration, promoting technological innovation and quality improvement (187 grants)
2. services to create new social inclusion enterprises, including consortia, and opportunities for self-employment by disadvantaged people (21 grants)
3. support and services to create permanent jobs for non-autonomous people (52 grants)
A 4th action, worth €650,000, has made 20 investments in the risk capital of third sector organisations. This money was provided by Fondosviluppo and APE, the members of which are Banca Etica, DROM (Lega’s national consortium of social co-operatives), Coopfond (a Lega fund) and SEFEA, the European ethical banking consortium. These are in turn fed by a 3% profit levy on members of Confcooperative and the Lega respectively. It is thus a solidarity-based mechanism through which co-operatives invest according to their means in the development of the sector.
The results are that 1,350 people have been trained, 150 have undertaken work experience, 48 people have received help to find employment, and 21 new enterprises have been founded. The main challenge, Spera says, is that co-operatives are not used to writing bids and business plans. A notable innovation is that the scheme has supported a co-operative which provides work for Roma in activities such as transport, logistics and cleaning.
A new agreement worth €6m was signed in March 2012 to run until the end of 2014. Demand has been unprecedented, and there were 700 responses to the call for proposals. Most applications have come from ‘type A’ (social services) co-ops.

Antonio Spera
Leader Soc. Coop. Cons.
Viale L Einaudi, 15
I – 70125 Bari
+39 080 501 1001

What progressives should propose is social enterprise 15 November 2013

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Roberto UngerGood to watch Roberto Unger being grilled by Steven Sackur on the BBC’s HARDtalk last night. It was an interesting contrast of style between a deeply-thought-out political philosophy and a journalistic desire to get snappy answers to practical problems. Unger, who is a Harvard law professor and was Brazil’s minister of strategic affairs under Lula, tried his obstinate best not to be dumbed down. His analysis led me to watch his discourse on What progressives should propose.
And hey presto I am delighted to find that little I have come to some of the same conclusions as the great man. He proposes that:

    – our economies need to be based on a combination of self-employment and co-operation (18:00 in the video). He calls it “the reconstitution of free labour”
    – civil society involvement in experimental ways of providing social services (23:00 in the video) – exactly what social so-operatives and social enterprises are doing
    – politics needs to be enriched with participative democracy

It seems that we in Europe are edging towards many of his prescriptions – to find a new synthesis of the North American faith in unfettered markets and the north-east Asian command economy, by for example:

    – spreading the experimental innovative collaborative ways of production which are currently limited to the vanguard of the high-tech industries
    – encouraging localities to conduct social experiments

Michel Barnier’s grounding of the Social Business Initiative in the need to “put finance at the service of society” bears a resemblance too. Maybe social enterprise is capable of “doing the work of crisis, without crisis”.

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