Co-operative sector growth slows, report reveals

Co-operatives UK has revealed the co-operative economy has slowed with turnover only increasing slightly to lb37 billion, up lb400 million.

This growth might be de-growth once inflation is considered.

Disappointing development in turnover was along with a decline in membership. UK co-operatives have 13.7 million members, slightly down on this past year, and the number of individuals employed by co-operatives slightly dropped as well.

Strong rate of survival

But despite slow expansion the economic performance of co-operatives remains strong.

The survival rate of co-operatives after 5 years is 72 percent, 29 per cent greater than that of conventional businesses.

This means co-operatives continue to be the more sustainable and resilient business model.

It is clear the wider purchase of the long-term goals from the company result in greater survival rates.

Grassroots work

In a statement James Wright, Co-operatives UK’s head of
policy, said:

“How big the co-op economy in the united kingdom – proportionally – still lags behind a number of other nations.

“There’s a lot of great co-op development work taking place on the ground which isn’t really represented in a macro level.

“The work in a grassroots level is vital, but we all do want to see more impact in terms of the UK-wide picture – and it’s fair to state there’s much try to be achieved.

“Co-ops remain resilient; business survival minute rates are higher than other business forms; we can point to worker co-ops with 1:1 pay ratios and no gender pay-gap.

“In a world of increasingly discerning customers, who aren’t simply turning to price as well as decide on products and services according to values, co-ops ought to be an all natural choice.

Awareness of co-ops

“Yet understanding of co-ops remains low, among would-be founders and those who advise them.

“Co-ops, collectively, have to continue to work harder to show why and how they are doing business better.

“More support is needed at central and local government level to provide start-up and growth advice which assists the co-operative option.

“There should be more education on the advantages of co-operation.

“Financial services must be better placed to serve the needs to co-ops.

“And bodies like Co-operatives UK need to act as enablers for all these things and unite the sector behind important campaigns.”

Nationwide Building Society

There is a few hope for the co-operative economy because the report excludes certain co-operatively owned businesses.

Despite joining Co-operatives UK, the growing Nationwide Building Society is excluded in the report.

The co-operative banking sector has seen large expansions in members and turnover that is not recorded by Co-operative UK’s report.

Due for this agriculture and retail dominate the co-operative economy, with lb34 billion originating from these sectors.

Despite this turnover of customer controlled co-ops, federal co-operatives, is down long-term despite growth this season.

Worker co-operatives

Worker co-operatives are showing stronger growth with a turnover of lb11 billion, up lb600 million in Four years despite there being less worker co-operatives.

Many worker co-ops, like Suma in Elland, West Yorkshire, and Manchester’s Unicorn Grocery, work on the same pay structure meaning they have narrowed the gender pay gap to zero.

There has been a five fold increase in community controlled pubs despite an ever more hard business environment for pubs.

Geographical spread

The majority of the UK’s co-operatives have been in England, which has 5,898 co-ops with 10.9m members, but Co-op rise in Scotland and Wales is boosted by government policy and money.

Both Scotland and Wales created more co-ops than England when correlated against business population.

The UK co-operative economy is extremely weak when compared with
more developed nations and many economic thinkers believe that a large
co-operative sector is critical to creating a resilient, sustainable just
economy.

Labour have pledged to double the size of the co-operative economy in their first term at work.

The Preston Model

They aspire to do this by promoting community building wealth strategies such as the Preston Model and streamlining regulation around co-operatives while generate laws such as the Macora law. Additionally they to hope to make use of regional investment banks to advertise co-operatives because they recognise their advantages to the wider economy.

Employee Ownership Association (EOA) and Co-operatives United kingdom has come together in a campaign called #1Millionowners.

They need to see a fivefold expansion in employee and worker ownership within the next decade, resulting in one million employee and worker owners in the UK by 2030.

They hope to put the promotion of employee owned companies as a policy objective nationally and locally, with funding allocated through the Westminster Government in the Spending Review.