Agenda item

The Committee is asked to review the Council’s progress and commitment to in implementing the Cooperative Council’s principles and explore examples of community led and focused organisations that are supported or have been set up by the Council.

The Committee received a report setting out the Council’s activities to support and promote both Cooperatives and Social Enterprise in Croydon. To aid the discussion representatives from various interested organisations had been invited to attend the meeting and provide evidence to the Committee. The organisations in attendance were:-

·      Cooperatives UK, who represented the 7,226 cooperatives in existence across the country, from large organisations such as John Lewis to many other smaller enterprises.

·      Croydon Plus, which was a credit union set up in 1999, initially for the staff of Croydon Council and had now expanded to include anyone who lived or worked in the Croydon, Merton or Sutton Boroughs. The organisation was self-funded and relied upon growing its customer base and received support from the Council, including co-locating in the Council offices. In the past two years its membership had grown from 3,500 to 6,000 members, with a large increase in referrals from local authorities relating from benefit issues.

·      The Caribbean Credit Union (CCU), was established in 1967 by a number of West Indians living in Croydon, having experienced difficulties obtaining credit through banks and originally started with 150 members. The CCU was mainly staffed by volunteers, led by a Board and various Committees who had responsibility for areas such as deciding loans and audit functions. Future plans were to continue to grow the organisation through partnership work.

·      The London Mozart Society (LMS) was a Chamber Orchestra set up in 1949 to promote the music of Mozart and Haydn across as wide an area as possible and now operated as a player run organisation. All musicians who were members of the LMS remained freelance to allow themselves the opportunity to pursue other avenues of work. LMS was overseen by six directors and dependant on their commitment to deliver its programme of events and activities. LMS provided support throughout Croydon through outreach work and worked with local community groups and schools. LSN also ensured that tickets for events were made available for those who would not normally be able to access that type of performance.

·      The Octavo Partnership was established on 1 April 2015 as a mutual trading company to provide school support services such as educational psychology, HR, governance, finance and IT support. The company had been created from what was formally a Council service which had faced large scale redundancies. The company had received the support of the Council when it took the decision to set up as a separate organisation, with the Executive Director for Finance, Richard Simpson a Director of the Company. The Council had also provided funds to support the initial cash flow for the company, but this had not been needed for the past two years.

The Cabinet Member for Economy and Jobs, Councillor Manju Shahul-Hameed advised the Committee that she had recently attended the Cooperative Council’s Network Summit, which was aimed at sharing good practice. Croydon was the first borough to have been awarded the Social Enterprise Place Status in 2014, with a total of 26 local authorities now awarded this status.  It was highlighted that Croydon Council was committed to the ten principles of Cooperative Councils and work was underway to develop initiatives that would support these principles.

It was questioned how existing small businesses considering becoming cooperatives could get support? It was advised that the infrastructure for Co-op development could be provided by Cooperatives UK, with the East End Trade Guild highlighted as an example of small businesses using a cooperative approach.

The Cabinet Member confirmed that it was an aspiration for the Council to set up more Business Improvement Districts within the borough, with 16 areas identified. There was also the Croydon Enterprise Growth Fund which provided loans of £10,000 to £30,000 to people wanting to set up their own businesses. To date £3.3m of loans had been provided to business across Croydon. The Council also provided Business Rate Relief and a Business Advice Surgery with further opportunities to expand these into district centres being explored.

In response to a question about the support provided by the Council for people setting up Cooperatives, it was confirmed that support primarily focussed on social enterprises, with a Social Enterprise Network that held regular events. The Committee raised concern that that the Council’s focus seemed to be primarily focussed on support for Social Enterprise and agreed that a wider approach to include different social business models, including cooperatives was required.

As such the representatives of the organisations in attendance at the meeting were asked what practical support could the Council offer to potential new cooperatives. The following was noted in response:-

• The provision of a support network to allow the opportunity to test ideas before committing to a course of action would be beneficial, as it was easy to make mistakes when operating in isolation that could possibly have been avoided had it been possible to discuss the situation with others who had been through the process.
• It was suggested that a mechanism for providing advice and guidance on governance structures and how to operate as a business would also be welcomed.
• Premises for many new organisations were noted as an issue, as it was important that companies that relied on customer support were based in a visible location.  Croydon Plus acknowledged that being able to co-locate with the Council had been particularly important for the development of their business.
• Providing access to a source of funding could also make a crucial difference in the early days of establishing a new business.
• Support in building a network for potential partnership working was also crucial to the success of new cooperatives.  It was suggested that empty shops in district centres could be used to host surgeries in local areas. It was also highlighted that the new locality model may also provide the Council with the opportunity to support organisations such as credit unions, social enterprises and cooperatives across the borough.

It was questioned whether the Council was doing enough to raise awareness of cooperation as a potential option for new businesses in Croydon. It was confirmed that advice surgeries were in place for both existing and potential new businesses. Help was also provided to assist organisations in finding premises and to access loans, however it was agreed that further work was needed to establish what other support the Council could provide.

In response to a question about the Council’s vision for the future of cooperatives in Croydon, it was confirmed that the Council was fully committed to implementing the Cooperative Council’s principles and that plans were being developed with a view towards becoming an enterprising borough.

It was highlighted that Community Cooperatives were becoming increasingly popular as a mechanism for local people to provide community benefits in a wide variety of areas including food growth and housing. Community Shares were also increasingly becoming a powerful model for local people to take control of local assets such as football clubs, libraries and other services.

It was questioned how easy the organisations present found it to work in partnership with other organisations, including both the Council and the private sector. Croydon Plus advised that they were fortunate in being based in a Council building as it provided the opportunity for much welcomed additional support. They also worked with a number of local businesses to provide a savings schemes for staff.

LMS also noted that they had received support from the Council, particularly in terms of advice. They also worked with the private sector, which was particularly important for developing networking opportunities.

Although CCU was fairly standalone as an organisation, it was highlighted that they did receive support from the Council in the form of a grant which helped towards the cost of their premises.

The Cabinet Member highlighted that the Council worked with the voluntary sector to promote Credit Union. It was also highlighted that each Councillor had a Community Ward Budget of £8,000 which could be spent on supporting local projects. 

In response to a question about the approach taken by other local authorities, it was advised that the Cabinet Member’s responsible for jobs across London met regularly and had discussed the benefits of a community lead approach to business. From these discussions, it seemed that Croydon was ahead of other local authorities in this area, but further work was still required.

It was questioned whether the Council took into account different business models when putting contracts out to tender and whether information was available to confirm the different type of businesses that had successfully tendered to deliver Council services? It was advised that that information was not currently tracked, but it could be compiled for the Committee after the meeting. It was also confirmed that market warning events were organised to raise awareness amongst local businesses when contracts were being tendered and to encourage them to bid.

In response to a question about what was needed to make a cooperative successful, it was advised that it essential to have a nucleus of people who believed in the project and were committed to driving it forward. As most people were used to working in a hierarchical structure, it also required people to embrace the cooperative model of decision making.  For long term success, succession planning was also key to the sustainability of any cooperative.

Request for Information

Arising from the discussion of this item, the following further information was requested a breakdown of Council contractors, categorised by business model.

Conclusions

In reaching its recommendation, the Committee reached the following conclusions:

1.   The Committee were disappointed to note that although the Council had signed up to support the ten principles for Cooperative Council’s, there did not seem to be an overarching policy to support cooperatives within the Council.

2. Although there had been an emphasis on social enterprise over recent years, there was a need to develop a strategy that encompassed all the different social business models and in particular the various models of co-operatism.

Recommendation

The Committee RESOLVED to recommend to the Cabinet Member forEconomy and Jobs that a comprehensive strategy is developed to set out how the Council will provide support for all forms of co-operatism and social enterprise.