Wales Co-operative Centre

Canolfan Cydweithredol Cymru

Posts Tagged ‘commission

Reflecting on the last 12 months – part 1

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With the new financial year barely a week old, Derek Walker, our Chief Executive, has taken the opportunity to look back on the last twelve months at the Wales Co-operative Centre….

Derek Walker

Derek Walker

I was recently looking through the posts on our blog site from the last twelve months. I was struck by the realisation that we have covered an awful lot of ground as an organisation. In addition, the scale of our output is matched by the quality and impact of our work.

It’s a healthy thing to look back at what has gone before, as you can learn from experience and take confidence from what has gone well. Another thing that occurred to me was the rich diversity of our work.

Since the start of the last financial year, some new clients have emerged. To highlight just a few – AFS in Swansea, where former Remploy staff came together to form a worker co-operative that has already proven successful. The Cambrian Village Trust social enterprise, in Clydach Vale, was supported to open a new, world class, all-weather football pitch. PS Services, a social business run by mental health charity Gofal, won the ‘One to Watch’ category at the UK Social Enterprise Awards. Many other businesses that we’ve supported have gone from strength to strength, showing that co-operatives and social enterprises are models for growth, as well as sustainability.

Elsewhere in the Centre, we’ve received additional funding from Welsh Government and the European Regional Development Fund to expand the area covered by Communities 2.0, to now help people in the most deprived parts of Cardiff, Newport, Vale of Glamorgan and Monmouthshire make the most of computers and the Internet. Communities 2.0 has also seen a number of county-wide initiatives launch in the last year, heavily based on strong partnership work – bringing the people and organisations together than can make a real difference.

Accommodation Furniture Solutions Ltd

Accommodation Furniture Solutions Ltd

Our co-operative housing project has been extended for another two years. More groups around Wales are talking to us, and our partners, about the potential to develop co-operative housing schemes in their community, giving people more direct control over their living arrangements.

The year’s watershed moment came with the publication of the Welsh Co-operative and Mutuals Commission report. Led by Professor Andrew Davies, the Commission has concluded that “conventional approaches to economic growth and development are not sufficient alone to achieve the improvement in the social and economic wellbeing of people in Wales”, adding “co-operatives and mutuals offer significant economic, social and environmental benefits compared with ordinary businesses. Their development must be central to transforming Wales’ economic fortunes”. These words come as a clarion call to those involved in the co-operatives and mutuals sector, as well as those on the fringes who have yet to realise the full potential of co-operative approaches to economic development. The report’s recommendations are currently being discussed at a series of consultation events and it will be interesting to hear how others think they should be taken forward. The report’s recommendations have the Centre’s full support.

Join us for the second part of this blog post, later in the week…

#walescoopreport Employee ownership could offer long term resilience in the Welsh SME sector

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#walescoopreport Employee ownership could offer long term resilience in the Welsh SME sector

In the second of our blogs on the potential implications of the recommendations of the Welsh Co-operatives and Mutuals Commission, we look at the potential for developing employee ownership approaches in Wales.


Rhian Edwards is Manager of the Succession and Consortia project in the Wales Co-operative Centre and has been heavily involved with work in Wales and the UK raising awareness of Employee Ownership as a viable succession option and as a means of encouraging engagement and growth in our indigenous businesses
.

The Welsh Co-operatives and Mutuals Commission report has recommended increased support for those employee groups who could consider employee ownership as a means of continuing viable businesses which are at risk of closure as well as specialist funding mechanisms to support employee buy-outs.

Employee ownership is a proven growth driver so it makes sense to raise awareness of, and support, a business model which is good for the business, good for the employees and good for the community the business is rooted in.

CASS Business School, a highly respected school within City University has been at the forefront of research into employee owned businesses for many years. Its 2010 study “Model Growth: Do Employee Owned Businesses Provide Sustainable Advantage” concluded that employee owned businesses are more likely to be resilient in both the ‘good times’ (2005-08) and recession (2008-09) than their non-employee owned counterparts.
CASS Business School has recently published a follow up study which concludes that employee owned businesses showed significantly higher growth in sales turnover relative to non-employee owned businesses throughout the recession (until 2011). This was reflected in higher growth in employee numbers and in employee contribution to profitability. This research demonstrates that although employee ownership is not a panacea that guarantees growth – after all, employee owned businesses are just as effected by external forces as any other business –increased employee ownership and engagement almost always results in increased stability and resilience than those businesses that don’t engage effectively with their employees.

At the Wales Co-operative Centre we have a long standing commitment to increasing employee engagement and empowering individuals within the workplace. A few years ago, we published ‘Defusing the Business Succession Time-bomb’ which asserted that Wales was in danger of losing an unreasonably high percentage of indigenous small enterprises over the next five to ten years due to poorly planned succession and unrealistic expectations of the potential for trade sales.

The Commissions report has recognised this issue and tried to address some of the big barriers to the approach: awareness, available support and finance.
There is no doubt that employee ownership is a valid and sustainable plan for long term business succession. Allan Meek, Managing Director of Caerphilly based SCS Group explains,

“For me one of the main advantages of employee ownership as an exit model for owner managers is the freedom to be open about plans for the future and for the exit to be conducted for the mutual benefit of the owner and the business”

There is evidence that businesses with high levels of employee ownership have substantial advantages over those without. Employee-owners have higher levels of job satisfaction, feel a greater sense of achievement, fulfilment and job security and are more likely to recommend their workplace than employees in non-employee owned businesses.

Barry Wise was one of four founding directors in Aberystwyth based Aber Instruments. He states,

“Employee Ownership ensures that everyone embraces a culture of openness and team-working. In turn this leads to all employees sharing some responsibility for the well being of the organisation and this drives profitability… The long term stability of the company is enhanced by Employee Ownership because employees, who know the business inside out, have a say in their future. This minimises external influence and our share structure ensures that ownership stays “within the four walls”.

Gill Wilde from Skye Instruments in Llandrindod Wells believes that the benefits of employee ownership are multiple,

“The first benefit is job security. No external shareholders can influence our direction. The success, or failure, is down to the employees. The second is financial; we have a profit sharing scheme so our employees benefit financially from our success. Thirdly, our employees have a voice. They have the opportunity to contribute to any activity of the business. Their views and suggestions are considered seriously and treated professionally. All employees are eligible to act as Trustees on the Employee Benefit Trust or as Directors in the company.”

Allan Meek of SCS Group agrees,

“We use employee ownership as part of a toolkit for engagement of our employees which is part of our core business strategy and we believe a source of competitive advantage. It is hard to say how much this alone encourages people to go the extra mile but it goes a long way to show employees that their opinions count”.

Employee ownership can also help ensure indigenous companies stay indigenous. As Gill Wilde explains,

“There are limited job opportunities in rural areas that aren’t connected to tourism and agriculture. Transferring the ownership of Skye Instruments to its employees enables a high tech business to remain and grow in the area and to be able to continue to offer specialist careers to future generations”.

Barry Wise concurs,

“We have seen other companies sell out and, as a result jobs and know-how have been lost in the locality. We were determined not to go that way. Employee Ownership brings stability and control over our destiny”.

In the new financial year, Capital Gains Tax exemptions have been introduced to encourage business owners to consider employee ownership as a viable means of succession.

If the recommendations in the Welsh Co-operatives and Mutuals Commission report are taken up there is every possibility that employee ownership could become a common and accepted business model in Wales, and one that makes a substantial contribution to the Welsh economy.

Welsh Co-operative and Mutuals Commission – ‘We want to hear your views’

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The independent Commission has been set up to make recommendations on growing and developing the co-operative and mutual economy in Wales.

We want to hear your views

The Commission would like to hear views from people in Wales and wider afield: producers, consumers, householders, those in and out of work, local communities, those running businesses in Wales, those with experience of the co-operative and mutuals sector and  individuals, communities or groups who would like to start their own enterprise.

  • What opportunities are there for developing and growing co-operatives and mutuals in Wales?
  • What role should co-operatives and mutuals take in the delivery of public services in Wales?
  • How can the Welsh Government support the formation and growth of co-operatives and mutuals in Wales?
  • What scope is there for existing co-operatives and mutuals to expand their operations in Wales and to assist other co-operatives to set up and grow.
  • Have you ever considered setting up or converting to a co-operative or mutual enterprise in Wales?
  • If so, where did you go for information and support and did you receive appropriate advice?
  • If you have received business advice in Wales, were you provided with information about the co-operative and mutual business models? How helpful was that advice? In what ways could it be improved?
  • What constraints are you aware of in establishing and expanding co-operatives and can you suggest ways of getting around them?
  • Are there ways in which the use of information technology and social media could be used to strengthen the co-operative and mutual economy in Wales?

How your views will help

Your views will help inform the Commission’s findings which will be presented to the Minister for Business, Enterprise, Technology and Science.

How to respond

The deadline for responses is 19 April 2013.

Please submit your views and suggestions in one of the following ways:

Follow us

@Coopmutualwales@coopmutualwales (External link)

Join in the conversation

Welsh Co-operative and Mutuals Commission Linkedin group  Our Welsh Co-operative and Mutuals Commission Linkedin group (External link) allows members to share knowledge, provide feedback and discuss the issues being discussed by the Commission.

e-mail – co-opandmutualscommission@wales.gsi.gov.uk

Post

Welsh Co-operative and Mutuals Commission
c/o Welsh Government
Ground Floor, North Wing
QED Centre
Main Avenue
Trefforest Estate
Pontypridd
CF37 5YR

Written by Mark Smith

February 13, 2013 at 9:32 am

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