As our thoughts turn to what our economy will look like post COVID-19, there are calls not to return to business as usual. There is an opportunity to create a fairer and more democratic alternative to what we’ve had in the past and community wealth building and co-operative business models will play a key role in that.
In our latest blog, we catch up with Suzanne Orchard, our specialist advisor for co-operatives to find out more about community co-operatives and why communities in Scotland are turning to this model to both safeguard vital local assets but also to generate economic benefit for the areas they live in.
What is a community co-operative?
A community co-operative is a type of community enterprise which operates primarily for the benefit of the local community.
Sometimes people from a community will come together to save a valuable local business or amenity facing closure, often the community shop or pub. It could also be an essential local facility facing closure and we have had an example of a community in Scotland who used the model to save their local school (Strontian Primary School). There are also examples of developing a business or project that offers fresh economic, social and environmental benefits such as Glenwyvis Distillery.
How are community co-operatives run?
Community co-operatives are controlled by their members – individuals from the local community who have invested in the enterprise through the purchase of community shares. All members have an equal say in decision making, regardless of how much they have invested. The profits may be invested back into the business or distributed among members but one of the defining characteristics is that the business is sustainable and does not extract large amounts of profit.
The survival rate of co-operatives indicate how well these models can work. Overall – 80% of new co-operatives are still trading after five years compared to 44% of new companies (Sources: comparing Office for National Statistics data with Co-ops UK’s datasets). Community shops and pubs in particular do very well with a survival rate of 94% and 100% respectively (Source Plunket foundation). The importance of local shops has been highlighted by the current COVID-19 crisis. With local shops proving vital lifelines to their community, it is anticipated that interest in community co-operatives will continue to grow if these amenities are deemed to be at risk.
What support is available?
If you are interested in setting up a community co-operative, Co-operative Development Scotland can provide support to help you talk through your ideas and decide the best way forward at the initial stages. We provide support to setup a community benefit society if you decide this is the right model for your community enterprise but we work with a number of partners including Community Shares Scotland, the Plunket Foundation and Co-operatives UK to help you access the support and expertise you need which ever model you opt for.
To find out more about our support for community visit our website www.scottish-enterprise.com/community-co-ops