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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

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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:

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.

(Brain)storm in Malmö 11 December 2013

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Toby presentingWe had a lucky break at SEN’s second peer review in Malmö last week – Storm Sven swept over us, closing the Öresund Bridge to the outside world – but it kindly waited till after we arrived, and abated before we left. It did make it hard to get to a decent brewpub though. And we had our own Sven, although he is more discursive than stormy in style.
I was greatly impressed by the ‘homework’ that the peer countries had put in, which resulted in an excellent set of comment papers. We had some new participants too: Eszter Kovách from OFA in Hungary and Ulrik Boe Kjeldsen from the Danish social affairs ministry. Denmark has set up a Committee on Social Enterprises, which has just published a set of recommendations and intends to establish a voluntary register. Further evidence of the convergence noted by Carlo Borzaga that is taking place among EU countries on social enterprises.

3 steps to capacity building

The event was excellently facilitated by Elisabet Abrahamsson of the Vägen Ut! consortium in Göteborg, which now provides 130 jobs. Learning from Trento, this time we cut down on the presentations and spent more time in small group discussions, which took the European Café format. I led the table on capacity building, which produced a very rich set of proposals. I simplified this down rather technocratically to 3 points:
1. Demand: raise awareness and smart procurement skills among public authorities
2. Supply: collaborative mechanisms to gain critical mass, such as consortia and social franchising
3. Appropriate financing – it is all ESF-able. A particularly interesting model came out in the form of the ‘wraparound’ support developed in NW England, where in 3 phases ESF is used to develop a business plan, an ERDF loan fund supports the start-up, and then ESF is brought in again to mentor and monitor its realisation.
The shared need for stronger bidding capacity was so evident that an idea arose; that several of the member countries could mount ESF projects to encourage consortium-building, and that together we could add a component of transnational exchange. I hope this plan might gain traction at the Strasbourg event in January
There was quite good evidence of transfer of ideas, and in particular Malmö might take up the idea of England’s Social Value Act and its future, more ambitious, Scottish analogue. There was widespread demand for translations of the Belgian guide to social clauses. Samuel Barco, our evaluator, made the point that ‘political will’ is not given, but constructed.
A decision on the network’s work plan was taken; that for logistical reasons the peer review on start-up support will happen in Scotland rather than Greece. Not to exclude that there may still be an event in Greece too.

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
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Partnership – from theory to practice in two days 19 September 2013

Posted by cooperatoby in cooperative, EU, Social enterprise.
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‘Peer review’ is a banalised concept but last week the Social Entrepreneurship Network took it from theory to practice. It took a high-flown concept – “Public sector capacity – strategic partnerships and governance models” – and turned it to practical use by people in a position to change things. I really enjoyed the event. Why?
SEN's Trento peer reviewFirst because of the committed people. Comparing it with an EU social inclusion peer review is was so much livelier and more committed. So much so that on the second day we moved quickly on past the concept of ‘transferability’ to a practical job. The people there were the right people – people who can make partnerships happen around Europe. So, instead of producing a theoretical comparison of different solutions to policy problems, we actually skilled up real live participants in the process – people engaged in the social economy as well as those running the ESF. This was enabled by the quick-witted and responsive facilitation skills of Luigi Martignetti of REVES.
Secondly the setting. I’d never been to Trento before, and quite apart from being fabled for its social co-ops, it’s a lovely place. A peaceful town with glamorous shops and bars selling wine at €2 a glass, with free tapas thrown in. The cathedral’s north transept has a remarkable Adam and Eve sculpture, in which the paintings on either side trompent l’oeil by become three-dimensional, and rising out of the frame. But it’s not all history. In the sleek modernist railway station, serpentine container trains thunder through from the Brenner pass, reminding me that isolated though it is if you try to arrive by air, Trento is there because it’s on a major trade route. Our meeting took placed in the provincial HQ on Piazza Dante, where the poet points upwards to the surrounding cloud-topped alps. The valley is full of vineyard and apple orchards, there is car-sharing and plenty of bicycles – and I was delighted to find an excellent micro-brewery in the shape of the Pedavena . This is sited just outside the old city walls, and has not only a shady garden (it was still summer in mid-September) but a massive and packed Bavarian-style beer hall surrounding its gleaming coppers and fermenting vessels. It brews light, red, dark and wheat beers and serves food to go with them.
So it’s a civilised town, and has civilised institutions to go with it. We were fortunate to be invited to spend the evening in one of them, the Samuele social co-operative. This is located on a hillside with wonderful views, in the Villa San Ignazio building that the declining Jesuit order no longer has a use for. The co-op started making leather goods, expanded by opening shop in the town centre, and then opened a bar and restaurant. The bar is called ‘Bar Naut’ an Italian pun on the ‘burnout’ that social workers can all too easily suffer from. The co-op’s president, Massimo Komatz, hardly had to introduce the enterprise before being pleasantly barraged with acute questions.
Antibodies to defeat the neoliberal virus
To kick off the meeting, we were treated to an inspiring introduction by Felice Scalvini ex of Federsoliderietà and CECOP, and now back home as a councillor in Brescia. He emphasised that the mushrooming growth of Italy’s social co-operatives – there are now 11,000 of them employing 301,000 people – didn’t just happen by accident: it was a conscious choice by a movement of committed people. This quantitative dynamic has led to a cultural, scientific and institutional dynamic. The two ‘evil characters’ in the story are:
• the ‘Washington consensus’ and the idea that injections of capital can solve social problems
• the European idea of introducing competition into the third sector. Co-operatives develop through co-operation – consortia, pacts etc. – not competition.
He urged us to be the antibodies that will defeat these dangerous viruses.
After an exhaustive statistical overview, the Con.Solida and four co-ops themselves then came to present what they did – and in those summery conditions I have to confess that with the best will in the world my attention wandered.
It was brought back into focus by the presentations of our three cases: the Polish Working Group on Systemic Solutions in the Social Economy, Trentino’s ‘Intervento 18’ which supports work integration co-operatives, and Scotland’s Public-Social Partnership at Low Moss prison. It was a rich menu. The three initiatives are at different levels – national, regional and local – and show how policy-makers can work with the social economy to solve serious social, problems like long-term unemployment and reoffending. They ranged from the overarching political to the technocratic evidence-based, but shared the feature of partnership between public authorities and the social economy.
I was particularly impressed by the quality of the nine peer comment papers, which made honest assessments of their own experience and contributed many acute insights into why the three initiatives we were reviewing worked, and how the lessons might be applied elsewhere.
Partnership is not optional
This was Luigi Martignetti’s reminder, referring to the EU’s Structural and Investment Funds. This heralded our second day’s work, in which we broke up into three small groups to discuss the tools for partnership. Concepts we explored included autonomy, objectives, leadership, sustainability, efficiency, transparency, opportunity, innovation, strategy, process, community, funding, human resources, contracts, quality, transfer, indicators and evaluation.
It was my particular pleasure to share with the group my feeling that the overused term ‘innovation’ doesn’t really mean much more than ‘problem solving’. The word has been borrowed from the world of technological R&D, where it is defined not just as the brainwave of inventing something, but of developing a saleable product and bringing it to market. In this sense innovation is an economic term. Similarly in the social field: what we judge to be an innovative project is one which identifies a problem, puts together techniques and resources to address it, and proposes a feasible way of solving it. This is in distinction to simply applying the traditional solutions.
Forward to Strasbourg
At the end, SEN discussed what we know as ‘mainstreaming’ – i.e. how we could make an impact on GECES and at the Strasbourg conference on 16th & 17th January 2014.
I think SEN has broken new ground with this peer review, and don’t doubt that the second in the series, in Malmö on 5th & 6th December on the topic of “Growth and Development”, lives up to my now raised expectations. Thanks to Malgorzata, Aleksandra, Dorotea, Luigi, our speakers and hosts, and everyone who came for making it such an enjoyable and productive two days.

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