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The role of co ops in local economic renewal


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Can you turn around neighbourhoods and foster sustainable renewal? Drawing on work I have been involved in over time, with hopeful examples and practical health warnings, this deck explores the role of co-operatives and community economic development.

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The role of co ops in local economic renewal

  1. 1. The Role of Co-operatives in Local Economic Renewal
  2. 2. What is local economic renewal? 2
  3. 3. Local economic renewal typically rests on effective community development • Community development • Co-production • Localism • Empowerment • Community economic development • Community organising • Community building • Resilient communities • Community cohesion • Community safety • Public health • Sustainable communities • Neighbourhood renewal 3 Needs based Key groups Professional interventions Unmet needs audit Delivery through public or voluntary sector service projects Asset based Talent survey Anchor organisations Asset transfer Delivery through community based intermediaries Goal oriented Community organising Campaigns Visioning Delivery through activists and entrepreneurs A report from the Democracy Collaborative on community development initiatives in the United States found that: “virtually all of the cases profiled in this report stressed the value of embarking on an achievable task that builds capacity and buy-in within the community”. Three models of community development
  4. 4. It is possible to improve even the toughest neighbourhoods through community action… but it takes time Neighbourhood Inspector Neil Armsworth, of the Northumbria Police says “the changes to the Meadow Well estate as well as the role and work of the police has been simply transformational over the past 25 years.” Nancy Peters, who started the local credit union that was instrumental to change, said at the time “at one time, you could leave the door open, people wouldn’t venture in and steal but now whether your door’s open or shut, they need the money to survive and its the same with children. The shoplifting, the aggression, the anger. I have never seen anything like it.” Starting with a talent survey of random houses in 1991, residents came together to respond, with the idea of ‘a new heart for Meadow Well’ in the form of a development centre built on a discredited youth centre. The response, though, was inertia. Despite the efforts of one sympathetic local employee from the Council, a senior officer was heard to say “those fuckers couldn’t plan a pram shed.” A decision was taken, instead, simply to close the youth centre. As this dragged on over five hot Summer months, the residents started to drop out and then… a group of young people locally burned down the youth centre. What followed was two days and nights of riots, with fires, a burned out corner shop, pot shots at a police helicopter cruising above. The riots forced everyone to think again. The working party held estate-wide elections to form a group that could negotiate with outsiders. They used Tony Gibson’s Planning for Real approach, which creates a mock-up of the neighbourhood, from trash on the ground to buildings up high, on a table that people can then walk around, explore and together discuss options for improvement. This led to the development of a new community building, launched with a fun day. The first of many community-led improvements, it was the first building scheme in the borough that had taken shape from day one to completion without a single case of vandalism or theft. Twenty five years ago the Meadow Well estate on Tyneside was hit by riots. Since that time, supported by the late Tony Gibson, a pioneer of the approach, it has become an exemplar for community development. 4 2017 1991 “There are a hundred and one starting points for local community action, but all have one thing in common. It is the day you or a neighbour step over a broken pavement or rubbish dumped in a corner and say, not ‘someone’ should do something, but ‘we’ should do something. Many more steps will have to follow. Communities are full of unused energy, talent, skills and knowledge. Once this is unlocked, great changes can take place.” Tony Gibson, Stephen Thake & Ed Mayo, Taking Power 1999
  5. 5. Key principles • There is money around, but not nearly enough institutions to invest locally and those which do exist are often too risk averse for growing local markets. • There are assets in communities – knowledge, skills resources, land and buildings – that can be harnessed to support local economic development. • There is money flowing through all local economies but, when there are few local enterprises and supply chains, it tends to flow straight out again. • There is a sense of place, where all the economic levers belong, the economic glue which links together those taking part in local sharing and trading. • A local approach may have benefits in other policy areas: it can produce jobs, but it also addresses environmental and social issues both locally and beyond. The particular leadership role of community co-ops is the catalytic role they can play for community economic development Seventy communities have worked with Co- ops UK and partners as part of the Community Rights programme backed by Government 5 Source: Ultra-micro economics: small plus small plus small equals big, David Boyle for Co-operatives UK 2014
  6. 6. Empowering Places “Capacity building support is the process of developing and strengthening the knowledge, skills, abilities and resources of your organisation and your wider community, to help you meet your overall aims.” Community economic development can be accelerated through capacity building and enterprise support 6
  7. 7. THE HIVE: PROMOTING THE CO-OPERATIVE WAY OF DOING BUSINESS The Hive is providing support to: start-up co-ops and community businesses existing co-ops looking to grow and develop Businesses looking to convert to co-operative or community ownership  As of end October 2017, 435 groups have benefited from support worth over £200,000  We are on target to benefit over 800 groups by the end of 2018
  8. 8. • Glenwyvis Distillery is bringing whisky production back to the town of Dingwall, Scotland almost a century after the last distillery closed down, in turn helping to regenerate a town which the economy had left behind. • 3,000 people came together to invest £2.6 million in a co-op, a great example of raising ‘community shares’, which will become the world’s first community-owned distillery, using local barley and renewable energy and attracting tourists to the area. • In the Scottish Highlands, a co-op is helping to bring hope to a town left behind by the national economy “Thee, Ferintosh! O sadly lost! Scotland lament frae coast to coast!” Rabbie Burns on a distillery closure
  9. 9. 9 The Evergreen Initiative in Cleveland, USA was launched in 2007, inspired by the successful Mondragon Co-operative Corporation in Spain. In an adapted design for Cleveland, low-cost capital has been seeded by grant capital from the Cleveland Development Foundation and supported by different forms of tax credits as well as long-term, low-interest loans from the federal government. They have raised £200 million of low-cost capital for Evergreen Co-operative Development Fund, their CDFI, and the annual procurement power of their anchor institutions is $3 billion. Evergreen Co-operatives have so far set up three worker co-operatives: Evergreen Co-operative Laundry Services that has been supported by procurement from anchor institution hospitals and universities; Evergreen Energy Solutions that has been set up both for installing, owning and maintaining solar power on anchor institutional buildings and for repairing and insulating older housing stock citywide; and Green City Growers a food growing co-operative to create jobs through the largest inner city farm in the USA. It has not been a straightforward process, but the insight of Evergreen Co- operatives has been to link up three co-operative economic development tools. 1. the Worker Co-op model to create good jobs including equity development for worker owners and profit sharing, 2. a Community Development Finance Institution owned by the Evergreen co-op network to invest and recycle low-cost capital (as subordinated debt at a rate of 1% to create jobs) and 3. a Community Land Trust to develop the space and sites for food growing and for developing affordable housing over time. In Cleveland USA, co-ops are helping to bring hope to a city
  10. 10. Health warnings, or... how to make community development harder • Community development takes time, but it is rarely given time. Instead there is a succession of stop-start initiatives, new funding fashions and sudden death grants. • Community development takes resources, but it is rarely given the resources genuinely to make a difference. Stripped down forms of community organising, for example, deliver stripped down results. • Local economic renewal requires an investment in local capability, but funders and agencies have typically failed to invest in effective capacity building. • The hollowing out of local authorities and cuts to core services means that success may be no more than standing still • Localism is not always the answer to issues that are national in orientation, such as advocacy or challenges around social norms, such as around race and gender. 10
  11. 11. 1. In West Dorset, rural communities have created local food links and new food enterprises. 2. In the Hebrides, three quarters of land is community owned, with more renewable energy generated in South Uist now in Summer months than the national grid can handle 3. In Preston, the local authority, police and health services are seeing where they can place contracts with locally owned businesses – a ‘community wealth building’ approach 4. In Bristol, growing numbers of people have joined the local credit union, for local savings and a currency that can be cashed with local enterprise. 5. In the Black Country, a loan fund supports local businesses turned down by high street banks to survive and thrive. 6. Children in the seaside town of Rhyl get to play music after teachers laid off by the county council formed their own co-operative to keep music education alive. So, there are genuine community economic development success stories… … but the caution is that these are unsung heroes. People’s sense of their neighbourhood is slow to change, however inspired that change may be. ”Rather than complaining about things, we’re getting on and doing something” Carolyn Loftus, member Esk Energy Society, Yorkshire 11
  12. 12. Resources Acknowledgements and Inspiration Many thanks to our local and national partners around community economic development, including Co-operative Bank, Locality, NEF, CLES, Responsible Finance, CLG, Power to Change, Reconomy & Transition Towns Network, New Weather Institute, Co-operative Councils Innovation Network, Co-operative Development Scotland, Wales Co-operative Centre.