Mutuals are ageing well

The UK is an ageing society and with that comes a growing recognition of the needs and aspirations of older people.

There are more people over the age of forty five than under, more people over sixty five than under sixteen. That means changes to the way that business operates, says Mark Beasely, from the Mature Marketing Association, who presented to cooperative retailers in the UK last month. 

The concept of age, he reports, is almost entirely associated with negative attributes in marketing and yet that is not a good reflection of how it feels to be older. Ninety five percent of marketing, he reports, is focused on people under fifty. 

But that doesn’t mean it makes sense to talk to older people as older people. Age is not how people want to be defined.

The social economy sector has some outstanding examples of people working to redefine age – such as Change Agents – including in sectors such as health and social care, where services based on co-operation and mutuality rather than financial return make all the difference. One of the best exemplars I have seen of action is what building societies are quietly doing to meet the financial service needs of older people.

“Already one in four people borrowing beyond the age of 65 is a first time buyer” says Dick Jenkins, Chair of the Building Societies Association. “The assertion that the over 40s can’t get a mortgage following the changes to mortgage regulation is overstated, but there are challenges.”

Building societies are therefore stepping back from simple age policies, beyond which you can’t borrow. They are working with insurers to help older people get cover for the mortgage risks they face. They are making sure that older customers have good information and advice in terms of their consumer rights.

The Vernon Building Society for example has lent to a married couple, both aged 70, who were renting in Poole, having moved back to the country from Spain. They had some capital and the Vernon lent them £80,000 on an interest-only basis, paid from their pensions (at a lower costs than their rental outgoings) and repayable from the sale of the property on death or if they move into alternative accommodation. They pay a discounted rate for registering a Lasting Power of Attorney to mitigate against the risk of not being able to deal with their affairs. It meant an end to our sleepless nights, the couple remarked.

Another approach is ‘right sizing’ where people move to a smaller house. Although 32% of older people have considered this in recent years, only 7% have done it, according to Legal and General. Having a trusted product designed for their need from a building society could help make a difference – even if we also as a society need to build more homes designed to be suitable for older people.

The origins of the term ‘mortgage’ is of course the grip of death (the words death and debt being similarly intertwined). Because it is a long-term product, building societies like the Vernon are taking on the stigmas of old age – while keeping an astute commercial eye for a growing market. Death may come to all, but as a society and economy, we should do better for all the years of life before it. 

Think of ageing? Think of life and not death.


John McDonnell, David Cameron and the growth of the UK co-operative economy

It is great news today that the Shadow Chancellor, John McDonnell, commits that the Labour Party will aim to double to the size of the UK co-operative sector if in power, as a way to boost the economy.

Drawing on figures from our co-operative economy report, he compares the size of the UK co-operative sector to counterparts in Europe, saying “We should be more ambitious about what can be achieved here. We want to see resilient, high-productivity businesses in an economy that is fairer for everyone. The next Labour government will look to at least double the size of the co-operative economy. That’s a £40 billion boost to the economy.”

His suggests mechanisms for supporting the growth of the co-operative sector chime with a number of our policy proposals, including legislation for ‘mutual guarantee societies’ which will enable small businesses to pool resources in order to access much-needed finance and support for self-employed workers to form co-operatives, both of which are recommendations from our latest report on freelancer co-ops that picked up significant media coverage.

I will blog soon on mutual guarantee societies to say more of our work on this innovation for enterprise finance.
The Shadow Chancellor also cites the limited resources allocated to co-operatives in central government, which points to our case for consolidating responsibility for co-ops in the department for business. And he commits to reversing the cuts in support for community energy ventures.

This is the most far-sighted speech from a front rank UK politician since January 2012, the start of the United Nations International Year of Co-operatives – and the speaker in question then was… David Cameron.

Designing in gender equality

Howard Roizen is a successful entrepreneur, confident and accomplished. When his story is studied in Business Schools, students that are given him to assess rate him highly. But the truth is that he doesn’t exist. ‘He’ is Heidi, a real life case study written up by Kathleen McGinn of Harvard Business School. When students are given her story, identical in every other respect, what they perceive is a degree of arrogance and self-promotion.

The reason, explains economist Iris Bohnet in her book, What Works: gender equality by design, is unconscious bias. The stereotype for Heidi is closer to the traditional fables of women and it is this stereotype that frames people’s response. The same unconscious bias can hold back and exclude men from caring roles, she adds.

 US companies spend $8 billion every year on diversity training, she estimates, and yet little if any of this is proven to change attitudes or outcomes. What is needed instead are tools and techniques to remove bias in a systematic way.

Iris is a lecturer at the Kennedy School in Harvard, and I have had the privilege of being taught by her on two short courses over recent years. In her book, eagerly awaited, she opens with a wonderful example of how to de-bias decisions:

“As late as 1970, only 5% of musicians performing in the top five orchestras in the United States were women. Today, women compose more than 35% of the most acclaimed orchestras, and they play great music. This did not happen by chance. Rather, it required the introduction of blind auditions. The Boston Symphony Orchestra was the first to ask musicians to audition behind a screen, and in the 1970s and 1980s most other major orchestras followed suit. When they did so, usually in preliminary rounds, it raised the likelihood that a female musician would advance by 50% and substantially increased the proportion of women hired.”

It is not enough to believe in equality. In our unconscious, we inevitably draw on stereotypes, shortcuts, that we have drawn from the culture and tradition around us. Changing those is possible over time, where there are new role models and new rules set, but in the meantime, to act on equality – for gender, race or other difference – means finding intelligent ways to bypass our unconscious bias.

Self-employed? Join a co-op.

The new tax year is starting and will see record numbers of people over the next twelve months filing returns as self‑employed workers.

Our new report, Not Alone by Alex Bird, Pat Conaty and Philip Ross tracks current levels of self-employment and the ways in which co-ops can help freelancers meet shared needs.

4.6 million people are now self-employed – the highest numbers in the UK since record began – and the numbers are likely to rise further, not least because it is an option that appeals to many people. One in four people (27%) of employees in medium-sized firms in research for the report say they would rather be self-employed.

In response, freelancers are starting to club together to form co-ops where they are better placed acting together rather than operating alone.

An example is RICOL. The service for interpreters in London was shaken up when the Government in 2011 moved from a national register of public service interpreters to a contract for all of England and Wales from a single provider, won by Applied Language Solutions, owned by Capita. To deliver on the contract, the firm then offered court interpreters work at what was in effect between 25% and 40% of the established rate.

There was a mass refusal to sign up and a protest group was launched, Interpreters for Justice. Many new interpreters hired by ALS were poorly qualified. Severe delays and chaos in the courts were widely reported in the press.

With help from Co-operatives UK, RICOL was established in November 2012 as a London-based interpreters and translators co-operative. They are now generating new work and contracts with law firms, commercial companies, human rights organisations and media companies.

It is early days for co-ops like these in the UK, but there are inspiring examples from overseas to learn from, such as the Self Employed Women’s Association in India, a trade union and co-operative network giving voice and opportunity to 1.7 million members.

Self-employment means that you take on the risks and the opportunities that the economy affords you. By coming together in co-ops, freelancers can share the risks and pool the opportunities.

You are on your own, but not alone.