Co-operatives and Alternative Businesses: Local Authority Support

Dehenna Davison Excerpts

Tuesday 20th June 2023 Westminster Hall

[The Parliamentary Under-Secretary of State for Levelling Up, Housing and Communities (Dehenna Davison)]

It is a pleasure to serve under your chairmanship for what I think is the first time, Mr Dowd—what a very sound time it is. First, I congratulate the hon. Member for Hackney South and Shoreditch (Dame Meg Hillier) on securing this incredibly important debate. We in Government share her desire to expand our understanding of what more can be done to support growth in different sectors and to learn from successful examples of best practice, as mentioned by hon. Members today. When I walked in, I admit that I was not expecting to go all the way back to 1777, which the hon. Member for Glasgow South West (Chris Stephens) mentioned, but it is always important to take on that historical perspective.

In looking at best practice today, I am grateful to the hon. Member for Hackney South and Shoreditch for her canter through the country’s co-ops and the excellent work that they do to support their local communities. I am also grateful to the hon. Member for Cynon Valley (Beth Winter) for outlining the work that she is doing across the valley to develop a local co-operative; I am interested to hear how that work progresses in the months and years to come. I am also grateful to the hon. Member for Neath (Christina Rees) for highlighting some key Welsh co-operative champions, such as Robert Owen, and for her overview of the Italian experiences of the Marcora law. I would be delighted to meet her to discuss that, perhaps in Neath; I thank her for the kind invitation to visit her in her constituency.

We recognise that co-operatives and alternative businesses can and do play a vital role in boosting growth and opportunity, at both a local level, as the hon. Member for Strangford (Jim Shannon) highlighted, and a national level. For instance, Co-operative UK’s 2021 report estimates that the UK’s co-ops have a combined turnover of almost £40 billion and employ around 250,000 people. It is also important to note the role that they have in supporting their local communities, as the hon. Member for Glasgow South West highlighted with regard to food poverty—an issue that he is incredibly passionate about and on which he is a vociferous campaigner. As for his private Member’s Bill, I do not want to give a commitment today, given that it does not sit within my brief, but I will certainly ask the relevant Minister to follow up on that point and have a discussion with him.

The role played by co-ops locally and nationally is why I am really pleased that the Department for Culture, Media and Sport recently launched the social enterprise boost fund, which will see £4.1 million of Government funding invested across six local authority areas to support the creation of new social enterprises and boost early-stage organisations. The fund will run until March 2025, and we expect local delivery partners to involve local authorities over the course of the programme.

In my Department, our £150 million community ownership fund allows community groups to bid for up to £1 million of match funding to help them to buy or take over local community assets at risk of being lost and to run them as community-owned businesses, supporting that sense of co-operative entrepreneurship. That important fund helps to safeguard the small but much-loved local assets that, frankly, we cannot put a price on, such as pubs, sports clubs, theatres and post office buildings. So far, £23.9 million has been awarded to 98 projects across the UK. I have had the pleasure of visiting a number of such projects and seeing the vital roles that they play locally. One of my highlights from my early visits was a visit to the Old Forge pub in Inverie, otherwise known as the mainland’s remotest pub. Certainly for the people in that community, it is more than a pub; it is very much a central pillar of their community, right at its heart.

In addition to those funds, the Government have supported a private Member’s Bill: the Co-operatives, Mutuals and Friendly Societies Bill. The Bill would grant His Majesty’s Treasury the power to introduce regulations to give mutuals further flexibility in determining for themselves the best strategies for their business regarding their surplus capital. The Bill completed its Third Reading in the House of Lords on 16 June and is entering its final stages. Hon. Members may recall that on the same day, the Economic Secretary to the Treasury announced that the Government will launch reviews of the Co-operative and Community Benefit Societies Act 2014 and the Friendly Societies Act 1992, conducted by the Law Commission. Those comprehensive reviews aim to identify essential updates to legislation, thereby developing a more modern legal structure in which mutuals can be supported to take advantage of opportunities to grow.

We should also recognise the work of the local growth hubs across England, as outlined by the hon. Member for Hackney South and Shoreditch. I must say, as a Yorkshire-born lass, that I was delighted to hear that Sheffield is taking lessons to London, not the other way round. That is always very refreshing for me to hear in my levelling-up role. There are currently 37 local growth hubs, which are backed by Government funding, with each delivered by a local enterprise partnership or an upper-tier local authority. They provide local businesses of any size, any sector or any ownership status with advice and access to support for any stage of their business journey through a free and impartial single point of contact.

Growth hubs bring together the best of national and local business support from across the public and private sectors. They work with key partners and funding bodies, including local authorities, to shape provision around local needs, meaning that businesses can find the right support for them at the right time. I am pleased to tell hon. Members that funding for growth hubs of up to £12 million in 2023-24 is confirmed.

It is important that co-operatives and alternative businesses are seen as valued members of their community by local authorities. That is why, as part of the antisocial behaviour action plan, the Government announced a high street accelerator pilot programme. Accelerators will incentivise and empower local people to work together to develop ambitious plans to tackle vacancy and reinvent their high streets so that they are fit for the future. I really hope to see co-operatives and alternative businesses in pilot areas joining the accelerator to ensure that we continue to learn how to better support their growth in our town centres and high streets.

I thank the hon. Member for Hackney South and Shoreditch and all Members for their contributions to this important debate. While I am unable to make promises today, as I hope hon. Members will appreciate, some key issues that I will take back to my Department, and more widely to Government, include assessing the barriers for co-operatives in accessing local and national government contracts; whether there is an opportunity to create a central hub for co-operative advice in Government; and whether there is an opportunity for a regional co-operative development agency. I will take those away and follow up with the hon. Lady. In the meantime, if there are more examples of ways in which local authorities can support co-operatives and alternative businesses, I will be very happy to receive them.