Current research projects

Cooperative Audit of Wales

There is increasing policy interest in social economy activity in Wales, as shown by the development of a Social Enterprise Action plan. From the perspective of WIRC cooperatives lie at the heart of the social economy and yet there is little sense of the size and scope of this part of the Welsh economy.

In Wales there is widespread activity through bodies such as the Wales Cooperative Centre, and in Tower Colliery we have one of the UK’s most successful worker-owned buyouts. It is our view that this experience needs to be captured through research to provide evidence of the social and economic contribution made by the various forms of cooperative and mutual organisations in Wales. For this reason WIRC began an audit of Welsh cooperatives in 2003. The intention was to audit what is happening in practice and provide a description that both captures the extent of activity as well as its variety. This information can then be used to make comparison with UK and international experience with a view to identifying strengths and areas of possible new development and support.

The research was published in autumn 2004 and are available for download here. Results indicate that the cooperative sector is a large and growing part of the Welsh economy. It consists of two distinct parts: the older, well-established cooperatives, including the Cooperative Group, the remaining mutual building societies, Cooperative Financial Services, and the farmers’ supplies coops, and a larger group of smaller and more recently established cooperatives. These in turn fall into two groups: those that were created defensively, generally as a worker buyout, to prevent the closure of a business due to asset-stripping or succession; and those that were created as cooperatives due to an ideological commitment to creating a different kind of economy.

In Wales some of the largest cooperatives are found in the agricultural sector, where producers join together into groups to market their produce in what are known as ‘secondary cooperatives’. We have discovered employee-owned companies operating successfully in fields as diverse as printing, packaging, engineering, and building. There is also small but growing number of cooperatives in broadly green areas such as renewable energy technology.

Public Services Cooperatives

Over recent years ‘mutualism’ and ‘cooperative ownership’ have become central concepts in the discourse over the reshaping of public services. As such they are being used currently to describe a wide variety of ways of associating, owning and controlling the equity and the value that is created in production. This understanding has particular relevance in the case of public services, where public money is spent to achieve social outcomes. If these services are organised cooperatively then the value created is anchored in to local communities. There is, however, the need for a critical edge in discussions concerning mutual solutions for public services, where the distinctions between privatisation and mutualisation can be blurred and where issues such as ownership and control are too often marginalised.

WIRC has been exploring the role for mutuals in public services as part of a research contract with Wales Cooperative Centre. In the Welsh context progress is most advanced in the area of housing, where the ideological preference for reducing the level of state ownership has made stock transfer the preferred policy for housing. Local authorities are obliged to meet basic housing standards (in Wales, the Welsh Housing Quality Standard) by a certain date (in Wales, by 2012) but are prevented from borrowing money to pay for the necessary refurbishment. Purchasers of the housing stock can borrow the money and make the investments, but there are understandable concerns about the movement into the private sector of significant public assets.

The Community Housing Mutual Model is designed to overcome some of the problems encountered during stock transfer. A primary problem is fear on the part of tenants. Although they may not be entirely satisfied with the standard of service provided by the local authority there is a sense that they are better of with the devil they know. Transfer to a housing association or other social landlord represents an unknown quantity in a most fundamental area of tenants’ lives and there is understandable wariness about voting for such a change to go ahead. The Model ensures control for tenants of their own properties.

A full report of the implications of the CHMM on the Welsh housing sector can be downloaded here. WIRC researchers are moving on to consider the implications of mutualisation for other areas of public services such as child- and elder-care.

In terms of the need to control public-sector spending, a related area is the strategic use of procurement to encourage the development of social enterprise and regeneration of communities. A report to Wales Cooperative Centre on this subject is available here.