Manchester’s new wave of co-ops

Posted on September 18, 2014 · Posted in Co-operative News

Various suggestions have been offered in recent weeks about what the Rochdale Pioneers might be doing if they were alive today. I believe their spirit is alive and well in some of the new start co-operatives that are now emerging.

 

The most obvious parallel with the initial founding enterprise of the co-operative movement can be felt, I think, in the Village Greens Co-operative in Prestwich in Greater Manchester. It is one of the youngest and most impressive co-operatives, with a shop that is strikingly clean, with a modern decor and a strong stock range of wholefoods, fruit, vegetables, drinks and organic meats. It is structured as a consumer co-operative, which has more than 400 investing members as well as two full-time workers, four part-timers and six casual staff.

 

Founder member Rachel Getliffe explains that the idea for the business arose two years ago from a conversation between two founders who were members of a community energy co-operative, Bee Sustainable. They wanted access to ethical, sustainable food products and preferred a co-operative structure for the new business. The two founders met up with other Bee Sustainable board members who were thinking along similar lines “and that’s when it happened”, says Rachel.

 

She explains: “Initial start-up funding [came] from the [Co-operative] Enterprise Hub via Cooperative Business Consultants, who provided business support and advice on setting up as a co-op. Governance and legal support [came] from Co-ops UK. [We had] incredible support from Unicorn Grocery – training days and always answering our many questions – and other co-ops, the People’s Supermarket, New Leaf, 8th Day – phenomenal support from our community, the people of Prestwich and North Manchester who really want this on their doorstep.”

 

Structuring the business as a co-operative with membership open to the local community has provided both an important source of capital and an engaged customer base. Members contribute £100 to join, but can pay by instalments. Investments are eligible for 50% tax relief through the Seed Enterprise Investment Scheme (SEIS).

 

Rachel explains: “[It is] one member one vote, members can have a real say in shaping the shop, how we operate and how the profits are spent, they can receive an interest rate or dividends when we are in profit. This is here for our community because they wanted it and gave us their support – we had the idea, but we couldn’t have done it without them.”

 

Shares are still available for those who want to become members and co-owners of the co-op, with the immediate focus of additional capital raising being the acquisition of a van. Customer commitment has translated into strong sales since the opening on 11th July. Rachel explains the co-op’s early sales have benefited from what she describes as an “incredible amount of customers through the door [so] we have surpassed our forecasts”.

 

Rachel continues: “The look of the store was very important to us: we wanted to provide a welcoming atmosphere with friendly approachable staff who are passionate about sustainable food. Part of our ethics is to support local growers, producers and suppliers, so we try to source our produce locally. We have a great range of local beers, wines, cheeses, organic meat, dairy and deli produce. We do try to source our organic fruit and veg as local as possible too, with a lot coming from St Helen’s, Lancashire and Cheshire and then within the UK. Our policy is mostly organic, supplemented with local conventional.”

 

Another new co-operative business in the North West is FC United of Manchester, which is located in the Moston area of the city. Local Labour councillor Alan Quinn, a strong supporter of FC United, says: “FC United of Manchester was set up by ordinary people who were sick and tired by the direction of football and with the takeover of Manchester United by the Glazers.” FC United is, he added, “part of the tradition of Manchester”, where there is a strong history of radicalism, with the TUC started in the city, where the women’s suffrage movement began and where demands for proper Parliamentary democracy led to the Peterloo massacre by the army.

 

Councillor Quinn continues: “Members elect the board. We are not just about football. We are about the community. Where does the money go in football from the Sky deals? It goes to greedy players and for clubs to pay directors. There has to be another way – and we are that different way.

 

“We have turned down money. There was an opportunity last year to take money from a betting company and we would not accept that money because lots of people are suffering from the betting industry.”

 

Andy Walsh, general manager of FC United, stresses that the project is about re-injecting values into football and being a community based club He explains: “I have been a United fan all my life, but I will not give money to the Glazers. Our game has been appropriated by big business: ordinary people have been squeezed out by high prices from going to matches.

 

“It’s not enough to say we don’t want that. You have to say what you do want. For us it was about affordable football, where every person who comes to the game is valued, with a democratic structure, about a membership structure where every member is equal. We want to be a co-op.

 

“We have been going for nine and a half years and we have more than 3,000 members. We want to be part of the community: it is not just about winning on the field. When we started our football club it was about saying we are proud of this club as Mancunians. There is an alternative.”

 

The impressive new ground at Moston is at an advanced state of construction and is expected to be handed over to the club at the end of October or early November. It has a capacity of 5,000, with a large function room available for local community use. The ground will also have a class room, a training room, dressing rooms and three pitches to accommodate youth sides as well as the senior side. Councillor Quinn says the building of the ground and associated community facilities represents the first major capital investment in the area for 40 years.

 

The fund raising target had been £5.6m, but this has now been raised to £6m because of extra costs caused by delays, firstly as a result of a judicial review which prevented the club taking control of the site as scheduled and then construction delays caused by bad weather.

 

Some £1.9m was raised through community shares – with the share offer still open and additional investments welcomed. (It is supported by the Enterprise Investment Scheme, with 30% tax relief.) The club is seeking at least a further £100,000. Other funding has come from Manchester City Council (which has also leased the site to the club), Sport England, the Football Foundation, waste management company Viridor and a large contribution – £700,000 in total – from supporter donations.

 

The club is very careful about sponsorship. It will not accept shirt

sponsorship in order to keep down costs for supporters who are keen to buy replica kit and don’t want to buy new shirts every year when sponsors change. New shirts will only be adopted by a vote of members, who will be involved in any redesign. The club has rejected the offer of sponsorship from a betting company, will not accept tobacco sponsorship and supports alcohol awareness policies. FC United pay credit to the support they have been given from Supporters Direct and from AFC Wimbledon, another supporter-owned club.

 

Both these new co-operative businesses were supported by CBC on behalf of the Co-operative Enterprise Hub, through funding from the Co-operative Group. Sadly that funding is now suspended with no guarantee of it resuming. A spokesman for the Group explains: “Funding from the Co-operative Enterprise Hub, which has supported more than a thousand fledgling co-operatives in the past few years, has been paused until the Group has determined how it fulfils its new purpose of ‘championing a better way of doing business for you and your communities’.”

 

While the Group says that no final decision has yet been taken on the future of the Hub, there seems little optimism in the wider movement about any funding being resumed. It is perhaps time for the movement to consider how it might fill this funding gap.