There is some very painful news from Hastings, where the community benefit society running Hastings Pier was forced some months ago to go into Administration. Funds raised through the high-profile community share issue were lost.
That’s bad enough, but what’s really upsetting is what has just happened now. The community dusted itself down, rallied round, used crowdfunding, and came up with a very strong rescue package for the pier. New hope for a really good end result, you’d think. Yet what has transpired is that the Administrator has disregarded the community’s rescue proposal and has made a deal to dispose of the business to an entirely commercial operator. Administrators can, of course, do this.
I would strongly encourage you to read the moving blog which Jess Steele from Hastings has just posted. What I think is particularly important is Jess’s comments about the need for a different process of Administration for community benefit societies. As she says, “It is wrong to use a commercial administration process for a civic/community asset, applying private property sector ‘solutions’ to a civic problem that the community is capable and willing to solve for itself given half a chance.”
She goes on to propose a Community Administration Act, for use where a community asset is at stake. Supportive backbench MPs are being sought to try to bring this forward.
Here’s her final thought: “The two Battles for Hastings Pier (2006-13 and 2017-18) stand in deadly stark contrast to each other. In one a very active community was eventually empowered by public funds to achieve the renovation of a derelict structure. In the other, the fully-restored asset was removed secretly from 5,000 shareholder-owners and then subjected to a commercial process that led, unfathomably, to where we are now.”
It is enormously disappointing that Unity Works, the ambitious community co-operative which restored a prominent Victorian building in Wakefield (once home to the local retail co-operative society) to create a performance space and workspace, has failed.
Staff have lost their jobs and four hundred or so people who invested in the community share issue have lost their money.
I have held back from intruding into private grief but I do now, a few weeks on, want to make some comments.
Firstly, despite the Unity Works story, community share issues are still, clearly, a Good Thing. Millions of pounds of investment capital have been raised for a wide range of community ventures, from locally run village shops and pubs to small-scale wind turbines. My own community land trust will be asking our local community for investment capital in a new affordable homes development next year when we launch our own community share issue, so I have a direct interest in this whole subject.
But we need to remember that community shares investment can be risky. Some groups launch community share issues without adequate business plans or prospectuses, and some investors – carried away by commitment to the idea – fail to read the small print. The way forward here is to encourage best practice, and the community shares Standard Mark is an excellent initiative in this respect.
Secondly, we still need vision and enthusiasm. I’m sorry that the vision behind the Unity Works project turned out not to be enough to create a sustainable business venture, but let’s not be daunted. Let’s still be ambitious in what we try to achieve for our communities.
On Friday afternoon and yesterday the British co-op movement met together for the annual Co-operative Congress, held this year in Wakefield.
I’ll post some comments here in due course about the event itself, but my first blog has to be about the venue. The conference was held in the recently restored Unity Works, once upon a time the main department store for Wakefield Co-operative Society (built with proper co-operative pride early in the twentieth century), later a venue for punk and heavy metal bands, but more recently run down and – for more than a decade – boarded up and derelict.
The effort to bring this listed building back into life – as a combination of conference centre, music venue and workspace for creative businesses – is a fantastic achievement, undertaken by a specially formed community benefit society and helped on its way by a successful community shares issue. The end result lifts an area of central Wakefield which was previously economically depressed.
Personally I’d have liked delegates at the Congress to have been given a short account of this initiative from the platform (Unity Works is, after all, a Co-operatives UK member organisation) but unless I missed it no such opportunity was taken. I noticed the name of Chris Hill, who was the development director for the project, on the delegates list but didn’t have the chance to congratulate him and his colleagues in person. I’m doing it here instead.
I’ve been delighted at the growth in recent years of community share issues, supported by the joint Locality/Co-operatives UK community shares project based in Manchester. But I’ve also been increasingly concerned that some community groups, carried away probably by sheer enthusiasm, have been inviting people to buy shares without really having anything like an adequate business plan to show them. There will unfortunately undoubtedly be business failures, and investors who will lose money, as some of the early community share-funded initiatives unravel.
The Community Shares Standard Mark, being launched today, is an attempt to impose some basic minimum standards and give some kind of reassurance for would-be investors. It’s a sensible idea, even though it’s possible to quibble with the details: the standard mark is only available to ventures who pay for consultancy time from one of a set list of practitioners, for example.
Incidentally I like to claim that a workers’ coop I was once involved in was one of the first (perhaps even the first?) to appeal for capital from supporters in this sort of way (in our case through community loanstock rather than through community shares). This was in 1979, and enough money arrived to enable us to buy a shop premises in Milton Keynes. Anyone know of any earlier examples?
There’s a mucky little story about what is happening to one of the government’s so-called ‘mutuals’ in today’s Financial Times.
The privatisation of the Civil Service pension administration to a new ‘mutual joint venture’ known as MyCSP was always a controversial affair, as I reported back in 2011.
The deal gave the staff (most of whom didn’t want to be decanted from the civil service) just 25% of the new company, with the private firm Equiniti Group holding the largest (40%) stake.
Today’s announcement is that the government is to sell 11% of its own original 35% holding to Equiniti, which will now have 51% of the shares – or in other words a majority stake.
With an election looming, we need to guard against politicians who play fast and loose with talk of mutuals and cooperatives. Compelling public sector staff to become members of their own mutual, or ‘mutual’, goes against every principle in the book.
Five more to go… we’re getting close to Christmas, so the social enterprise and cooperative ‘advent calendar’ which I’ve been writing for The Guardian’s social enterprise pages (one social enterprise a day from Dec 1st) is also getting close to its conclusion (advent calendars traditionally stop on Christmas Eve, and so will this one).
Today’s entry offers you some information about the Dartington Hall trust near Totnes in Devon. Yesterday was the turn of Jamie Oliver’s 15 restaurant. Tuesday’s entry focused on Divine Chocolate.
Have we missed anyone’s favourite coop or social enterprise? Sorry, but of course we will have done. The Guardian’s comment section is open for your feedback (not to mention the chance of winning a social enterprise xmas hamper).
I’ve been finishing off today the last in a series of 24 short pieces on British social enterprises and cooperatives, which The Guardian is using for its 2013 online social enterprise ‘advent calendar’ (you’ll need to look at the website here and here to see what exactly this means).
Organisations covered in the series include some well-known social enterprises such as the Big Issue and Jamie Oliver’s 15, but it’s the small initiatives, often inspired by one key individual, which I found particularly interesting to report on. Good luck to them all.
In Britain, we are becoming familiar with the term ‘social enterprise’. Internationally, including at the UN, the talk tends to be of the ‘social and solidarity economy’, SSE. If you’re interested in some of the debates happening globally around SSE, a good place to start may be this UNRISD webpage.