UNISONActive is an unofficial blog produced by UNISON activists for UNISON activists. Bringing news, briefings and events from a progressive left perspective.

Saturday, 25 January 2014

Report of Co-op Bank Crisis: Ways Forward for the Co-operative Movement‏

On 17 January 2014 a conference was held in Manchester to explore predominantly the impact of the coop bank crisis on the future of a (truly) cooperative bank as well as the wider crossroads for the cooperative movement. Delegates came from a range of backgrounds including trade unions, retail coops, credit unions, and 'coop consultants'.

The conference was not particularly well organised. It would appear that 'cooperator' principles did not extend to anyone thinking about signage for rooms / delegates / checking that the AV worked etc. This is not intended to be a cheap point score but an observation on the sheer cultural differences and professionalism required in the public sector as compared to albeit well intentioned third sector organisations.

The day had an opening plenary session, somewhat spoiled by appalling AV, and a chair that didn’t so much chair as offer the audience lengthy views of his own after each speaker. With the exception of maybe one or two points raised none of the speakers seemed to get to the heart of the issues impacting on the cooperative. However the Q&A session did at least start to raise some pertinent questions:-

First of all the issues of the involvement in public services of cooperatives and the seemingly expansionist ambitions of coops UK certainly set some hares running. It was after a short time obvious that many were blissfully ignorant of the concept that coops could be open for criticism as a model for public service delivery.

Secondly it was left to a Unite official to highlight that whilst some were calling for withdrawal from the 'cooperative' bank - with others perhaps naively believing they could one day win the bank back from its new investors - jobs of low paid bank workers were at stake and many jobs had already been lost.

The afternoon workshops were an opportunity to get into a bit more detail about where the coops are heading. The workshop titles were lengthy and didn’t really explain what they were about so for ease of reference these are just referenced workshop 1, 2 and 3.

Workshop 1:

This looked at the retail model of cooperation with presentations from UNICORN grocery and SUMA wholefoods. UNICORN extolled the virtues of all staff chipping in to do the jobs needed - clean the shop, work the tills, stack the shelves and built on a flat management structure. SUMA explained that they have a more structured approach but flexibility to accommodate work life balance amongst staff is a key factor in their model.

Ironically the retail 'successes' are the reasons why the model is difficult to apply in a public service context. Could we really not empty bins on a set day because the bin-man had to take his cat to the vet? Or should we allow social workers to pick and choose which cases they want to take up and disregard statutory duties? There was a certain degree of annoyance that the application of the coop model to public service is not an especially good one and is certainly not evidenced by any degree of success. There was also widespread ignorance or disregard for the fact that public services are already owned by all of us and in fact that the cooperative model removes services from 'all the public owning them' to a group of co-operators or 'members' - in other words de-democratising public services and makes instead a spurious case for 'democratic organisational structures - one member one vote principles' in place of the ballot box.

Workshop 2: This was to look at progressive ways to develop a new offering for cooperatives. However… sadly there were scant new ideas coming forward. One speaker (Charlie Clutterbuck) an agricultural scientist made an excellent case for the coop shops to raise their game by developing farm worker assured produce. In the absence of the now defunct agricultural wages board the idea would be that produce sold in coop shops - going beyond fair trade principals - would ensure that British farm workers were paid a living wage, had decent terms and conditions of employment ( no zero hours contracts for example) and worked in safe environments. This seemed to be progressive coop principles at their best and would offer the coop a new USP since their retail offering currently offers little distinction from others who have caught on to the consumer drive for corporate social responsibility. Coop energy also featured but with warnings that although a developed model the market was highly competitive and they would need expert input. The same too for nursery provision and coop schools (with an interesting anecdote that one supposed coop head teacher did not know what the coop was!).

Workshop 3: This may be best described as the (organic) bun fight…Presentations from Mutuo and an excellent presentation from UNISON's Alison Roche led to a fairly robust debate. One of the case studies being the Probation Service proposals for a mutual as the softer alternative to a privatised service. Rochdale Borough Wide Housing was also trotted out as an example of a service now owned by the residents… however a number of points were raised in response to this:-

Firstly there is no guarantee, when a service is placed into mutual ownership as a cost saving measure, that future contracts will be awarded to the mutual or that future funding levels would remain the same. From a staffing perspective this places staff at the same - if not worse- risk then other forms of outsourcing - can it be a TUPE transfer if the employee is de facto their own employer?

Secondly if grants/contracts are cut then they are at risk without arguably the potentially broader financial stability of a larger public sector outsourcing provider. If the job of the trade union side is to best protect its members then unstable contract structures and unstable finances are not a panacea against privatisation.

Third in respect of Rochdale Borough Wide Housing (RBWH) the concept of RBWH as a resident owned housing provider was also challenged. Quite simply from being able to ring a local councillor and asking about the housing waiting list residents - who are not yet fortunate enough to be a tenant of RBWH have less say than ever before! And no option to use the ballot box to influence housing policy. This seemed to be a bit of a light bulb moment for many delegates.

Alison Roche outlined UNISON's twin track approach to outsourcing and highlighted the now imminent changes to public procurement regulations, which will have a defining impact on mutual and cooperatives and also highlighted the Wandsworth approach which was to incubate the Mutual as a Teckal company before cutting it off from the public sector in around 12 months time. It was clear that the views of some in the workshop are that there is no point in fighting for public services and we should be placing coops where the Victorian philanthropists were… we did remind them that public services came about because that model failed the poorest and the most vulnerable and indeed without public services would have arrested economic development in the UK!


There appears to be three camps within the coop movement currently

The Traditionalists:- Predominantly older members of the cooperative movement who are by and large oblivious to the expansionist intention of Coops UK. They appeared willing to question some of the themes emerging from Coops UK but there is a huge job of education and a need to raise awareness with this group. The dots have not been joined properly that some of their fellow co-operators have taken the Cameron Big Society shilling in supporting the de facto outsourcing of public services under the guise of 'cooperation' but which is a form of privatisation

The Expansionists: This group refuse to accept many of the difficulties with coop models applied to public services. Any criticisms are strongly resisted. Many pseudo public sector coop consultants, who do not appear to have a great understanding of public procurement law, service commissioning and public service operational issues, are all too aware of the trade union concerns but resist strongly any criticism. The attractive funding from cabinet office seems to ensure that they will not be turned on these issues however well evidenced and founded the criticisms are. This fits with a particular vision for growth of the coop movement ( albeit not shared with its political wing the Cooperative Party) and unless there is a leadership change at the top (executive level) this approach will condemn the labour movement, the coop movement and trade unions into a schism on public service reform.

The Evangelists: The coop movement is awash with activists who have a near religious commitment to cooperation and believe that it can be applied across all areas of society. Even when these groups give a nod to the legitimate concerns of the trade unions and others they simply believe that the answer is making sure staff get a vote (with a gun to their heads one assumes..?) and that consultation and safeguards can be the answer. Whilst the Evangelists may be misguided, but well intentioned, there is a slim chance that a programme of education as to why this level of reform of public services is actually an affront to the coops founding principles may produce a more sensible outcome.

The way forward…..

There seems to be some confusion over UNISON policy on this subject. UNISON has always adopted a twin track approach to outsourcing of public services. Resistance on the one hand and getting the best possible outcome for our members on the other. In the case of coops however there has been some flirting with the model as the 'lesser of the evils' which has allowed confusing messages to seep through into the political lexicon. As thoughts for the way forward we arguably need:-

A clear an unambiguous policy which:-

• Condemns all outsourcing of public services including outsourcing to coops and mutual and other forms of social enterprise. (This will help to nail any mood music that UNISON is somehow soft on privatisation if it is through this route).

• Supports the use of cooperatives and mutual as a means to step towards the re-municipalisation of public services not as a means to privatise public services ( eg coop Home Care providers that could bring together exploited workers in small providers with the eventual aim to bring these workers and services back into public services)

• Supports high level discussions with Coops UK, The Cooperative Party and the Labour Leadership via Labour Link to explain why UNISON can't support the expansion of coops and mutual in public services

• Why this model is not financial sustainable and why it places the jobs of UNISON members at risk and undermines the fight for public services as democratically owned and governed public services.