Social Economy: the curious incident of the UK going European?

I have had the luck over recent weeks to see something of the emergence of policy in a number of European countries in relation to the idea of the ‘social economy’.

Co-operatives certainly have a proven role across Europe. There are something like 160,000 coops across Europe, owned by 123 million people and providing jobs to 5.4 million citizens. Co-operatives Europe reports that in Finland, 75% of the population are members of a co-operative enterprise. In France, co-ops provide more than 1 million jobs, representing 4.5% of total employment in the country. In Germany, cooperative banks have more than 16 million members. In Italy, 7 million people are served by social cooperatives.

Alongside this, though, we have the separate traditional pillars of the social economy: mutuals, associations and foundations, or charities. More recently, the more hybrid models of social enterprise have been included as a welcome addition.

Recognising the potential of coops and the wider social economy, Antonio Tajani, as Vice-President of the EU Commission in charge of Industry and Entrepreneurship, set up a working group to develop a roadmap for EU policy. This is still in the process of development, but offers an important opportunity for dialogue around European and national level policy.

Three main subjects have emerged as important i) co-operative education, ii) financing and iii) business support for co-operatives..

There are some great European examples to draw on. In France an agreement was signed between the education minister and the social economy network to develop a social economy class in primary and secondary schools. A co-operative school of management, Coeptis, is developing programmes for worker cooperatives and managers in close partnership with co-operative organisations.

In Poland school co-operatives are active in all types of schools (primary up to high school), being managed by students they contribute to develop certain types of transversal skills as well as entrepreneurial skills.

In terms of finance, there is interest in the examples of countries such as Spain, that have dedicated financial funds for investing in co-ops. This would mean working with the European Investment Bank and Fund to explore the opportunities. In a number of countries too, finance is linked to business support.

In Sweden, the Coompanion network of support agencies is funded centrally by the Swedish Government Agency for Economic and Regional Growth, with an annual budget of just under £4m, which is distributed to the regions on a per capita basis, and is then matched with regional funding and with other sources of finance. The specialist advisers have played an important role in the development of new co-operatives and the continuing success of existing ones.

Italy offers the example of national co-operative development funds. To comply with the law, and in exchange in effect for a differential taxation rate, co-operative enterprises in Italy have to transfer 3% of their net surplus to funds, which are then used to support the development of co-operative business and employment.

In Spain and France, there has been the development of Social Economy Laws, which build on the core legal models that are well established to offer forms of recognition and support. These can include the new forms of social enterprise (at least, where they align with these legal forms, i.e. under a tighter and clearer definition than sometimes holds). In countries that don’t have such strong, unbroken traditions, such as in the Balkans and Eastern Europe, Euricse, the European Research Institute for Co-operatives and Social Enterprise, has concluded that it is better to start with co-operatives, mutuals or voluntary organisations and build from there, rather than start from the open and often confused institutional arena of social enterprise itself.

In the UK, we are doing something of the same, but without any of the flag waving. We have joined up outside of Government in the form of the wonderful Social Economy Alliance. But there has been activity in Government as well in recent years. As a result of some astute lobbying by Co-operatives UK (started by my former colleague, John Goodman) along with allies such as Social Enterprise UK (Dan Gregory can take a bow) and social investors, we have seen the development of tax incentives and concessions, for example around renewable energy but not limited to that, for the three legal forms that operate with a clear asset lock in the UK – community benefit societies, community interest companies and charitable organisations.

It is early days. But it is, in all but name, a very European policy of the social economy taking root in the UK.

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