Established in 1982 as part of a Wales TUC initiative to combat unemployment, the Wales Co-operative Centre has established over 500 co-operative businesses in Wales. The Centre is itself a community co-operative and is registered as an Industrial and Provident Society. Funding for the Centre has been provided by the Welsh Development Agency, local authorities in Wales, Elwa, earned income and the European Union. The Centre operates from offices in Gwynedd, Ynys Mon, Powys, RCT, Bridgend, Caerphilly and Llandaff Court, Cardiff. Its Development Officers cover all of Wales and provide comprehensive business advice, training courses and legal registration to both new and existing co-operative businesses. The Centre also works directly with many local authorities in Wales to promote best practice, often supplementing the work of the local authority.

There are four types of co-operatives the Wales Co-operative Centre assists and supports:

1. Worker Co-operatives:

These are businesses that are owned and controlled by their employees with no external involvement. Members are entitled to one vote at statutory meetings on important decisions and selection of the board of directors. However, formal management structures are established to ensure the efficient running of the organisation and they will usually adopt limited liability status as companies limited by guarantee or companies limited by shares. The Centre offers a specific service promoting Co-operative Business Successions where traditionally structured businesses are sold to the employees with significant tax advantages to the new company, the vendor and the employees.

2. Community Co-operatives:

These are businesses owned and controlled by people who live, work or have an interest in the well being of a geographically defined community or a community of interest such as users of the service. Control is exercised through the one member one vote principle, whereby community volunteers are elected to represent the community on a board of directors. Traditionally, community co-operatives are established as companies limited by guarantee, companies with charitable status or, in some cases, companies limited by shares. Community co-operatives can be structured as non profit or voluntary organisations that may qualify for lottery, National Assembly and Trust funding.

3. Secondary Co-operatives:

These co-operatives are formed when a group of businesses or individuals come together to share a common facility on a co-operative basis. Such services may be administration, marketing or purchasing. One member/one vote principle applies in order to form the board of directors and to exercise democratic control. Secondary co-operatives can enjoy tax benefits through the concept of 'mutual status' if certain trading conditions are accepted by the Inland Revenue. The most common form of secondary business is the farming co-operative, where groups of farmers join together to undertake joint marketing ventures and set up machinery networks.

4. Credit Unions:

These are financial co-operatives owned and managed by the user-members. They offer members a convenient way to save and access to low cost loans. Membership is based on a 'common bond', where people working or living in a particular geographical area can join. They encourage both social and economic development on a local basis through the retention of wealth and skills development and support small businesses. Credit unions are mutual societies and registered through the Financial Services Authority.

The Wales Co-operative Centre provides advice on how to set up co-operatives and provides a comprehensive training programme for members and directors through its modular based training system. Ongoing support is provided for as long as the business needs it. The Centre can:

1. Provide business advice and consultancy, including business planning and group development.
2. Prepare and deliver modular based training courses.
3. Provide legal documentation and proceed with business incorporation.

Strategic Approach

The Wales Co-operative Centre has developed a series of projects for delivery over the next three to six years. The projects aim to build the capacity of the co-operative sector in Wales in the following ways:

• Increasing the awareness of the co-operative sector and the contribution it makes to the economy in Wales
• Providing a strategic all Wales approach to the coordination and delivery of co-operative development services
• To recruit staff that are able to provide a practical level of support at the local level involving business advice, consultancy and training.
• To more closely work with the existing business support and social economy agencies in Wales, making greater use of available resource and improving efficiency

The Wales Co-operative Centre has developed projects that cover as many areas of Wales as possible through the use of Objective 1, 2 and 3 funding:

i) Regional Objective 1 and Objective 2
ii) Local Objective 1

Regional Programmes - Developing Social Economy Entrepreneurs

The project aims to develop entrepreneurial skills in co-operatively structured businesses. The project has two key aims. Firstly, assisting existing businesses to realise and develop entrepreneurial activity in the social economy. This will include a specific emphasis on risk management. Secondly, support in developing new businesses in the social economy, including existing businesses, which are identifying new opportunities to add value to existing products and services. This will be supported primarily through the development of marketing and secondary co-operatives.

This project allows the Centre to provide a comprehensive Objective 1 coverage, through the Entrepreneurship Action Plan. This strategic approach focuses on selecting ‘key’ clients, who display entrepreneurial skills, aim at sustainable business and benefit the community.

Co-operative Enterprise Training
Also delivered as part of the Entrepreneurship Action Plan, this project concentrates on the training and human resource aspects of entrepreneurial co-operative based projects, utilising ESF money. These clients will either be clients that the Wales Co-operative Centre has helped set up or new businesses that aim to set up. Quite clearly there will be strong links with the ERDF project above.

The purpose of this project is to increase the competitiveness of existing co-operative businesses within Wales and to encourage full participation in entrepreneurial activity amongst those currently economically inactive. In existing businesses the project will:

• improve the basic and core skills of the employees, the managers and the directors
•  improve competitiveness and encourage business growth and diversification
• develop a culture of entrepreneurship and lifelong learning within smaller businesses
• offer joint training programmes to SMEs
• safeguard jobs and create new jobs in businesses, which grow
• encourage supply chain initiatives

These two regional Objective 1 projects complement each other both contribute to the aims and objectives of the Entrepreneurship Action Plan. They will both be managed in house by the Wales Co-operative Centre and will be delivered through a team of development and training officers, who are part of the Centres co-operative development team.

The Enterprise Factory – the Enterprise Rehearsal Programme
As part of a wider project managed by the WDA, the Wales Co-operative Centre has successfully secured European Funding to expand a current service delivered in Cardiff and the Vale.

The Enterprise Rehearsal Project (ERP) allows unemployed people to receive funds to develop and start their own business whilst maintaining their unemployment benefits. The participants work up to 16 hours per week on their business idea and continue to be available for work until they are ready to go it alone. During their time on ERP, normally a period of 6 months, the participants are taken through the following stages:

• Feasibility study and assessment of their business idea
• Business Plan
• Legal aspects and requirements of their business
• Training needs analysis
• Assistance with accessing funding and property/premises
• Sales and marketing skills
• Financial skills
• Mentoring and guidance whilst test marketing and in the onset of trading
• Any other skills relevant to the logistics of running their business

Assessments are made at each stage with the project remaining flexible to tailor it to individual needs. The resultant outputs for such a project are the setting up and running of small businesses either as sole traders, partners or limited companies, some of which will be run on a co-operative basis. As a result individuals are taken off unemployment benefits and become employed in their own business. The project is directly nurturing potential entrepreneurs to become actual entrepreneurs.

Business Successions
The initiative has been developed by the Finance Wales Partnership and is part of the development of an Enterprise Fund for Wales. It is a support mechanism for the activities of Finance Wales, which seeks to establish equity and loan capital for SMEs in Wales.

The initiative will support businesses facing succession issues (“succession businesses”) in obtaining access to the Management Succession Fund (“MSF”) being established by Finance Wales. The Centre has appointed one business advisor in the South Wales Objective 1 areas and will appoint a second in the North Wales Objective 1 area sometime next year. The project works with both vendor and employees of a business that is intended to be passed on to its employees. A new company is established with support from Finance Wales and the vendor, the employees and the new company will benefit from a favourable tax position if the deal is sold through a suitable trust scheme of the which the Centre is able to advise.

The project is supported by a part-time marketing manager who promotes the benefits for SMEs of addressing succession issues and the assistance and training available through the scheme.

Local Programmes - Developing Enterprise Through Co-operatives

The Wales Co-operative Centre has submitted a total of four local co-operative projects in the local authority areas of Bridgend, Caerphilly, RCT and Gwynedd. The basis of identifying these areas is primarily down to levels of demand experience and the availability of match funding from each local authority, without which the projects would not be able to go ahead.

Each project is similar and designed in such a way as to provide flexibility in delivery to meet the differing needs of the different regions. However, all four projects have the following key aims:

1. To work with the existing businesses assisting them to realise and develop entrepreneurial activity through the development of new and existing viable businesses in the social economy.
2. To provide a bespoke business support service for newly establishing and existing viable businesses in the area. Critically this will include supporting existing businesses that are attempting to identify new opportunities to add value to existing products and services.

The projects work with partner organisations through the active co-ordination of the economic development department of the County Borough Councils. Other links the Wales Co-operative Centre has with relevant agencies, most notably through the Community Economic Regeneration Partnership, are also used to ensure that best use of resources is made and that a seamless delivery of advice and support is provided. The project increases the delivery capacity of the Wales co-operative Centre by employing a team of development officers covering all of the Objective 1 areas of each County.

Future Programmes

The Wales Co-operative Centre is keen to expand the entrepreneurial programme beyond objective areas and therefore aims to consider two further regional bids of the same structure as the objective 1 bid covering ERDF development support and ESF training support through Objective 2 and Objective 3 programmes.

In doing so the Centre will be moving to an all Wales strategic approach to co-operative business development where clearly targeted programmes are delivered to clearly targeted clients with the aim of maximising benefit to the community and the economy.

Related Activities

The Wales Co-operative Centre, in partnership with other agencies delivering in the social economy such as the Development Trusts, Menter a Busnes, Groundwork Wales and Community Enterprise Wales, is aiming to deliver an all objective 1 project that looks at the capacity of the social economy in Wales, the capacity for such a partnership to evolve into something more substantial and to undertake a mapping exercise and research the social economy.

All Wales Credit Union Strategy
This project is part of an overarching credit union development strategy aimed at developing a strong, self-sustaining credit union movement in Wales. This strategy is being supported by the National Assembly for Wales. This project is linked to:

• An approved Objective 1 project ‘Retaining Wealth through Credit Unions’ submitted through the Community Regeneration Regional Action Plan.
• An Objective 1 training project submitted through the HRD partnership. Indications are that this project has been successful.
• An Objective 2 project, yet to be developed, which will mirror the Objective 1 ‘Retaining Wealth through Credit Unions’ project.
• ICT development projects for which the NafW has specifically provided matching funds Ÿ A range of locally based credit union projects, some in the name of the Centre but the majority in the name of credit unions or groups of credit unions themselves. It is anticipated that there will be more such local projects developed over the next 12 months.

The strands in the overarching credit union development strategy were identified through a two year consultation exercise involving the credit union movement in Wales. It is in the context of this strategy that all the links between the projects are made.

Considerable care has been taken to ensure that the activities undertaken as part of this initiative are such that they will add value and complement locally based credit union development activity. Throughout the lifetime of this initiative there will be close co-operation with activities, both credit union and other, which form part of local social economy and community regeneration strategies.

An important element in ensuring that this and associated projects complement and add value to activity being undertaken at a local level is the formation of a Local Government Credit Union Forum. This is being done with the support of the Welsh Local Government Association. This is also underpinned by the active encouragement given to individual credit unions to become engaged in local community regeneration partnerships.

For more information, contact:

The Wales Co-operative Centre
Llandaff Court
Fairwater Road
Cardiff  UK CF5 2XP
Tel: 029 2055 4955
Fax: 029 2055 6170
Web: www.walescoop.com
E-mail: walescoop@walescoop.com