In August, we joined a roundtable at Holyoake House to discuss how our business movement could contribute to the UK government’s co-operative growth agenda. With the manifesto pledge to "double the size of the co-operative and mutual economy", the Centre for Democratic Business has set out several interventions to outline how we would like to contribute to this ambitious target in this parliamentary term and beyond.

Research & Development that contributes to innovation in the development growth models that we use in the UK

For the last few decades, growth in the UK’s co-operative economy has largely been characterised by the creation of startups in different sectors. As is often said, the wider business movement tends to be either large, historical societies or local microbusinesses, with only a limited number of SMEs. Alongside the generational opportunity to support more business transitions from private to democratic ownership, there are also other routes to scale we should invest in. Such as:

Franchises could be a route to scaling businesses in a particular sector and creating an easier path to business ownership for those unlikely to start their own enterprise (which represents a significant part of the working population). Brightly in the US, for example, leads the way as the first US co-operative franchise system, specialising in the cleaning industry, and focused on creating fair employment for women and migrants.

We could facilitate more mergers between smaller businesses in our sectors as a route to achieving more scale and resilience, especially as many are competing with one another in the marketplace, and are subject to the inefficient and costly overheads of all small entities.

An increase in the number of secondary co-ops could also improve access to cost-effective services, supplies, and cheaper capital to a network of primary co-ops operating in or across several industries.

Facilitate more investment into at-risk development capacities in our sector

Investing in the capabilities of experienced members of democratic businesses to become advisors is essential if we’re going to respond to this ambitious target. Existing programmes like Barefoot – a six-month course we manage in partnership with Co-op Culture – represents one effective opportunity to quickly training new advisors, especially to boost development capacity on a regional basis, b) increase those from diverse backgrounds, and c) those with experience in newer industries.

More sectoral and government funding could resource both the programme, and post-training support to get individual advisors actively working through development programmes, which from our experience is not a direct or easy route. There’s a lot more work to be done on building the relationship between new advisors and infrastructure bodies that are commissioning support.

Increase institutional investment and matchfunding into the community shares market

The community shares market is one of the positive stories of the last decade, but institutional investment is still extremely low (c. £2.5m since 2020). We’re planning to facilitate more institutional investment from the UK’s charitable foundations – particularly as there is an increasing number 'spending out’ and/or changing the ‘stewardship’ of their wealth.

As an example of this opportunity, we’re currently consulting for a charitable foundation which is exploring how to invest its £45m endowment into physical assets that root young people in place. But this represents just a small part of a potential market of institutional investment and to expand this work, this autumn we’re setting up an institutional investment network for charitable foundations to support them to find out about investing in equity, and to learn from others doing it.

We need a better development ecosystem to work on government funded programmes, like UKSPF

Our organisational experience of being part of several UKSPF consortiums who applied both successfully and unsuccessfully for regional funding, was that it was chaotic, fragmented, and needlessly competitive. This was often put down to the short timelines and delays in the tendering processes, but it also points to the lack of coordination across development agencies, and in turn, their relationship with the local third sector.

Now that we’re waiting for the new government to make a decision about the future of the programme, we should start the process of building regional and national consortiums to bring together development bodies in a more intentional way, less competitively, and based on certain specialisms.

We’d like to work with the Co-operative Development Forum on this area of work, assessing the sector, supporting CDAs to build relationships with local anchor organisations, and have more influence over the next iteration of this government initiative.