cDIREoCTIONmFOR THE pass DEMOCRATIC LEFT

MUTUALISM RISING?: HOUSING’S VITAL ROLE IN THE ‘BIG SOCIETY’

by Chris Handy, Matrix Housing Partnership, August 2010 Kevin Gulliver, Human City Institute 5 5 6

Tr hink e b m u N N PIECES 5 6

Tr hink e b m u N PIECES

MUTUALISM RISING? HOUSING’S VITAL ROLE IN THE ‘BIG SOCIETY’

The ‘Big Society’ promises much so its radical edge needs to be claimed by progressives who should seek to influence its

“direction, reclaiming the approaches associated

with the wider Labour movement such as co- operatives and mutuals as genuine alternatives to a one-size-fits-all centrali“ sed state. In no other arena is mutualisation more apposite and achievable than in housing generally through Community Land Trusts for example, and social housing specifically.

Compass publications are intended to create real debate and discussion around the key issues facing the democratic left - however the views expressed in this publication are not a statement of Compass policy. Mutualism Rising and the ‘Big Society’ www.compassonline.org.uk PAGE 1

MUTUALISM European countries where co-operative Freedland argued in a Guardian article enterprises and approaches are part of (20th July 2010) for Labour to reassess RISING? the mainstream. Despite the UK’s some of the implications of the ‘Big historical role in leading the way from the Society’, which echo some of the research Housing’s Vital Role Rochdale pioneers onwards, mutualism is findings about the benefits of housing now relatively under-developed here co-operative and mutuals discussed later in the ‘Big Society’ despite recent expansion led by Co- in this paper, in Labour’s own recovery operatives UK in the follow-up to the and future direction,: Monks Commission in 2000. iii Perhaps one by Chris Handy, Matrix Housing of the most remarkable developments in ‘It’s worth digging into Labour’s roots. Partnership, Kevin Gulliver, Human City the run-up to May’s General Election was There you will find the co-operative Institute the rise of mutualism as a key theme in all movement, friendly and mutual societies, three major Party Manifestos, as well, of as well as trade unions, out of which ootball is perhaps a strange way to course, being central to that of the Labour was forged. The ethos of start an article on mutualism in Co-operative Party and an important collective organisation and self-help f housing. But consider how in the last component of the Greens’ future vision. predated the Fabian emphasis on thirty years privatisation of key industries, While there are considerable differences central government and the later marketisation of public services, and the in approach and emphasis, seemingly obsession with state ownership. What invasion of civil society by ‘free market’ widespread political support for various those Labour pioneers understood was models has crowded out debates about mutual models provides a space for a real that more was at stake than providing alternative ways of managing enterprises; progressive consensus to be formed services efficiently; that there was an never mind how society is structured. through which the UK’s economy can be extra, human value in people coming Now reflect upon the management of rebalanced to incorporate more together and working for the common two of the largest and most successful community-based enterprises and a good. The sociologists speak of ‘social football clubs in the world – FC Barcelona greater degree of direct control by local capital’ that accrues when people form and Manchester United - especially their people over service delivery. such connections with each other. There development ethos and how they are is, as Cameron argued, a ‘passivity’ that managed. The first - FC Barcelona - is a The space has opened up partly because can result - and has resulted in Britain - mutual owned by 130,000 members of the Credit Crunch. Many progressives when people habitually look upward for worldwide which pays Unicef to have its are now calling for more community- solutions....Labour will make a great logo on the Barcelona strip. Compare this controlled and community-focussed mistake if they put themselves on the with Manchester united, with its strip financial institutions to be created or wrong side of the idea at the heart of emblazoned with private sector sponsors, expanded. John Lewis-style partnerships the ‘Big Society’....Instead, Labour needs owned predominantly by one American and similar mutual options seem to be to seize this idea....reclaim its Labour family which loaded the club with £600 supported by all sides. Labour while still in origins and then improve it’. i million of debt to support other ventures. government published its ‘Mutual Benefit’ The contrasting approaches of the two prospectus, although many felt that this The launch of Cameron’s initiative on 19th clubs illustrate that there is more than one was too little too late, which saw the role July suggests that there will be a significant way of achieving success, even in such a for an ‘Active Sate’ state to facilitate place for co-operatives and mutuals competitive sport as European football; grassroots mutual approaches to supported by the creation of a ‘Big Society the mutual route enables at least equal management in the NHS and Social Care Bank’ using dormant bank accounts to success in sporting and business terms for example. iv Since the General Election, provide financial support to new co- while ensuring that ownership and David Cameron’s has advanced his vision operatives, mutuals, charities and social direction stays with those who most care for a ‘Big Society’, building on Phillip enterprises. vi This paper, then, sifts the about their club - the supporters. In fact, Blond’s ideas of devolving public services evidence of whether mutualism is on the there are now 169 football supporter to smaller-scale social enterprises and rise, if the Big Society’ can extend the clubs in the UK with 100,000 members, asset transfer to disadvantaged ‘Mutual State’ and how housing might be suggesting that there is considerable communities. v Despite the ‘Big Society’ the key sector to realise these ambitions. potential to change the nature of the being used by the media as a euphemism Democratising social housing and enabling ii Premier League. for volunteering and which has become control of considerable physical assets by entangled with debates about the pros some of the country’s most disadvantaged Beyond football, a significant opportunity is and cons of ‘free’ schools, progressives communities is surely overdue. emerging to extend mutualism in the UK need to support a potentially radical way and to come into line with other of transforming public services. Jonathan

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Mutualism in the UK: insurance sectors, which generally and mutuals underlines the problem. The Current Lie of the Land performed much better than the Estimates vary widely and are often mainstream banking sector and determined by the legal status of individual Mutualism stretches back even to the demutualised Building Societies during the organisations and the diverse interests of feudal period when access to large tracts credit crunch, shows that the UK mutual those collecting statistics. For example, the of common land met a variety of needs. sector now has an annual turnover in number of housing co-operatives The onset of enclosure of common land excess of £100 million, or 9 percent of UK registered with social housing regulators was opposed by groups such as the GDP. viii (Tenant Services Authority - previously the Diggers and Levellers who argued for the Housing Corporation) numbers just 243. value of common and communal forms of A number of commentators have However, Co-operatives UK estimates that ownership since individual wealth remarked upon the growth in what has there are 677 with an annual turnover of acquisition was considered a sin. The become known as the ‘Mutual State’ and £300 million. xiii Research for the creation of mutual and co-operative its benefits. x Internationally, public services independent Commission on Co- organisations throughout the 18th and co-operatives are well established in many operative and Mutual Housing, brought 19th Centuries, exemplified by the countries, especially in the fields of health together a range of datasets for the first Rochdale Pioneers weavers co-operative and social care, as housing of course. Mayo time and discovered that there are 836 and the ‘villages of co-operation’ and Moore in 2001 ix call for a ‘mutualising organisations across the UK (although this established by Robert Owen, was of the state’ and recommended new is still probably an under-estimate) with an mirrored by the growth of finance and models for delivery of public services annual turnover of more £500 million and industrialised capitalism. Although these including a participation audit, an average of £1.9 million. xiv organisations and their formation decentralisation of service management, a continued into the 20th Century, rising recognised status for mutuals, conversion These 836 housing co-operatives and inequality and social problems called for of selected public services to mutual mutuals manage 169,000 homes which state and municipal intervention, including status, and re-imagining the state as a constitutes just 0.6 percent of all UK massive investment in public housing, guarantor, funder and regulator of a housing in contrast to norms of 5 to 15 which became increasingly prominent, plethora of mutual service providers. In percent in the European Union and even especially after the two World Wars, and 2002, a range of organisations including 1 percent in the USA. Of these tended to crowd out mutual approaches the New Economic Foundation, IPPR, the organisations, 54 percent are owned by although many strands from the past Fabian Society and the Public Management co-operative and mutual housing continued. vii Today, mutualism is back on Foundation recommended the creation of organisations and the remaining 46 the rise in the private, public and third a Mutual State Toolkit to enable percent are managed on behalf of others sectors. mutualisation of public services which (usually local authorities) through Tenant embraced co-production, social enterprise, Management Organisations (TMOs). The co-operative economy in the UK is new models of community finance and Ninety-one percent of UK co-operative seeing a significant revival as part of a multi-stakeholder governance. xi To a large and mutual housing is in England, with 5 successful global enterprise. Globally there extent, multi-stakeholder focussed percent in Scotland and 3 percent in are 800 million members of co-operatives, organisations have grown in recent years Wales. Co-operative and mutual housing or around 9 percent of the total world to extend models of mutualism. These organisations can be found as far afield as population. Internationally, co-operatives include Foundation Trust Hospitals, Co- Northern Scotland and the Scilly Isles, but employ100 million people which is more operative Trust Schools, Health and Social most organisations exist in the major than all the world’s multi-national Care Co-operatives, and Community conurbations. Fifty-four percent of companies combined. Across the UK there Interest of Public Interest Companies with organisations are located in Greater are almost 5,000 co-operative enterprises their own regulator. xii A radical ‘Big London with other major stock holdings with an annual turnover of £34 billion Society’ could be built on these models. found in Midlands and Northern cities like with a membership approaching 13 million Birmingham, Liverpool, Manchester and and employing 240,000 people. In contrast The Co-operative and Mutual Preston. Only 8 percent of TMOs are to the anaemic growth in the wider Housing Sector in the UK linked to housing associations of which economy, and an actual decline in Gross most are within Walsall’s unique Domestic Product in 2008 to 2010, the Housing is the poor relation within the WATMOS vehicle – a resident controlled- co-operative economy has grown by one overall co-operative economy in the UK group of eight TMOS registered as an quarter since 2006. Membership is up 15 (although this isn’t the case in many other independent social landlord. This implies percent over the same period. Grouping European Union countries). The lack of a that housing associations have a way to go together co-operative enterprises with comprehensive dataset covering key to catch-up with local authorities [see other mutuals in the financial and information about housing co-operatives maps (1) and (2) and chart (1)]. compass Mutualism Rising and the ‘Big Society’ www.compassonline.org.uk PAGE 3

A wide and deep variety of co-operative life, especially for older people. and mutual housing organisations operate Community Land Trusts and mutual in the UK, united by being democratically home ownership, couching and legally owned and controlled by a aspirations for individual asset service-user membership and where at ownership within a community safety least a majority of service-users are net, are offering a potential way members. Housing co-operatives that forward for those seeking financially collectively own and democratically sustainable home ownership against manage their homes are the largest part a backdrop of unaffordable of the sector. More recently, Community mortgage finance and a scarcity in Gateways and Mutuals have made a start social housing supply. All produce on injecting democracy into mainstream sustainable and mutually supportive social housing and have facilitated large- communities with less reliance on the scale stock transfer from local authorities state, reducing the dependency of Although co-operative and mutual housing in Preston, Liverpool, London and parts of residents and moving away from detached is a small facet of the UK’s housing system Wales for example, so transforming the managerialism. xvii the benefits to those who live in housing options available to sometimes struggling provided by these organisations has now neighbourhoods. They are proving to be The Benefits of Co-operative and been well charted. They achieve above attractive ways of transferring council Mutual Housing average resident satisfaction ratings when housing where elected tenants often form compared to housing associations and the majority of management board local authorities and provide high quality members. housing management performance. Housing co-operatives and mutuals A high degree of involvement, sometimes receive the highest scores of any landlord through a community gateway committee type across all fourteen Tenant Services and/or devolved area-based resident Authority indicators including quality of committees, around business planning, customer service, repairs and design, neighbourhood development, as maintenance, dealing with complaints, well as housing service delivery, is part- looking after the neighbourhood, involving and-parcel of the organisational ethos residents, and helping residents with jobs from the outset. At the heart of the and skills. Independent research shows approach is flexibility of involvement that hard-nosed statistics about the allowing all tenants and communities to services provided in these organisations become members but to determine their are generally so good because their future at their own pace. Created in the members democratically own or manage last five years, they are of a different scale their homes, they take responsibility, help from the rest of the UK’s resident a themselves, and feel a greater sense of xviii community controlled housing sector. The belonging, identity and ownership. Community Gateway in Preston, the Watford Community Housing Trust, the They are also not the insular Phoenix Community Housing Association organisations sometimes portrayed by in Lewisham, the Greenfields Community others in the social housing sector; the Housing Association in Braintree, and Bron proportion of their lettings to black and Afon Community Housing in Torfaen, minority ethnic applicants is higher than Wales, manage 35,000 homes between for housing associations. Around 1 in 10 them with a combined turnover of more new lettings by these organisations is to than £200 million. RCT Homes in someone with a disability, 55 percent are Pontypridd and Liverpool Mutual Homes to women-headed households and the manage 11,000 and 15,000 homes average age of those taking up tenancies respectively. xvi is younger than the population generally. And they genuinely are open to Cohousing schemes, imported from disadvantaged groups - one in four of America, are providing community housing households accommodated were alternatives to the alienation of modern previously homeless before moving in,

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more than one quarter were living in in any other type of housing; not least of co-operative and mutual housing, poor or overcrowded housing and one because of the mutually supportive national and local government needs to fifth had incomes below £5,200 per year communities they have created and a rich trust people and communities. A lack of a [see table (1)]. Lone parent families are tapestry of human interaction and self- consistent and supportive framework over also a major household group help that distinguishes the sector. xxi the long-term, as exists in most other accommodated by co-operatives at European countries, has been one of the around one fifth - the greater TABLE (1) - reasons for under-development, with opportunities for shared childcare in Major Needs Met by Resident- mutual housing first being crowded out by mutual housing organisations is a key Controlled Housing Organisations council housing after WWII and then attraction. xix in England home ownership from 1979 onwards. Yet greater political support The mutual support provided in these is fundamental to make organisations has helped many repair co-operative and broken lives, to re-skill and obtain work - mutual housing options those living in co-operatives and mutual more widely available to housing organisations tend to be more people. A truly ‘Big often in employment than in other parts Society’ approach needs of the social housing sector. There is a to introduce a legal, growing body of evidence too that regulatory and support housing co-operatives and mutuals framework that is contribute to cohesive communities and sympathetic to a more active citizenship; whether tackling climate democratic and change or volunteering as school localised housing. governors. xx They are genuinely local Funding is also being based mainly upon geographically- important to extend determined communities usually based co-operative and around housing estates or defined mutual housing. If co- neighbourhoods in inner city areas o rural operative and mutual locations. This clearly dovetails with the housing is to be developing Coalition ‘localism’ agenda and available to people and communities to a the proposal for Community or Local Housing’s Role in the ‘Big Society’ greater extent than presently, a resources Housing Companies or Trusts to lead or framework needs to be put into place, affordable housing development, especially Co-operative and mutual housing offers although this seems unlikely in the current in rural areas. In this case, initiatives such some potential answers for our housing Age of Austerity. But it isn’t all about as Planning for Real may come into their and community problems that the ‘Big public money; national and local own in helping locals determine Society’ is intended to address. A sector government should work closely with the development priorities. often mistakenly characterised as private financial sector to work out what belonging to the past can also meet the needs to be realigned in terms of The benefits of co-operative and mutual 21st Century aspirations of most people. sustainable funding packages. xxii housing clearly extends beyond their Whether by providing a mutually residents. When they are set-up in broken supportive environment for elderly people Second, the wider co-operative movement neighbourhoods, often characterised by a that values their ongoing contribution, or in the UK, incorporating commercial, lack of trust and community spirit, they housing for young people who stand little financial and agricultural co-operatives, usually transform them, with other local chance of getting onto a receding housing should utilise its powerful position in our people beginning to feel that they are part ladder, or housing for families trapped in national democracy, and put its dynamism, of something positive again. Building poor private renting, or different ways to imagination and vision behind co-operative personal assets through new forms of co- provide housing for the vulnerable, and mutual housing. After all, co-operation operative, such as Community Land Trusts, disempowered and disenfranchised, the should start in the home. In mutual that ensure what went into building the sector offers numerous possibilities. With terms, where people live is surely more community in the first place isn’t lost, are the case for an expanded co-operative important than where they shop, where now adding to the range of ancillary and mutual housing sector compelling the they bank and where they work. The co- benefits. Research has equally revealed real ‘Big Society’ should start here. operative and mutual housing sector is that most co-operative and mutual also challenged to recognise historical housing members would not want to live First, if we want the considerable benefits shortcomings as well as its considerable compass Mutualism Rising and the ‘Big Society’ www.compassonline.org.uk PAGE 5

successes and unique identity, coming vehicles including TMOs, co-operatives or Dr. Chris Handy is Chief Executive of the together to promote distinctive selling- community development trusts, within the Accord Housing Group, Chair of the points. Strong, open, transparent and overall social landlord governance Matrix Housing Partnership Strategy accountable democratic governance needs structure. Committee and Executive Commissioner to be built and maintained, and new of the Commission on Co-operative and support structures to help the sector Conclusion Mutual Housing. expand have to be put into place that stress localism, community and collective Mutualism has certainly been on the rise Kevin Gulliver is Director of the Human decision-taking. xxiii with the co-operative and mutual City Institute, Chair of the Centre for economy and the ‘Mutual State’ both Community Research, an independent Third, and perhaps most importantly, growing appreciably in recent years to housing and regeneration consultant, and existing social housing providers like bring the UK more in line with its EU Secretary to the Commission on Co- housing associations and local authorities partners. The ‘Big Society’ provides a operative and Mutual Housing. need to recognize that the people and further opportunity to extend mutuality communities they house are their chief and stakeholder involvement in ownership ______assets. Co-operative and mutual housing and control of social enterprises, and to can play a key role in helping the wider embed more localised approaches to housing world to re-align its skills and ownership and management. Public expertise to facilitate ordinary people and services would be more effectively communities taking control. What needs influenced by service-users and be to happen is that the values of the co- responsive to the wider economy and operative and mutual housing sector need community. The ‘Big Society’ promises to be imported into mainstream social much so its radical edge needs to be housing. This could be the great test for claimed by progressives who should seek the ‘Big Society’ rhetoric. Here is sector of to influence its direction, reclaiming the 4.6 million homes with an estimated asset approaches associated with the wider value of £100 billion with an annual Labour movement such as co-operatives turnover of £25 million housing some of and mutuals as genuine alternatives to a the most disadvantaged citizens and one-size-fits-all centralised state. In no communities. Enabling transfer of other arena is mutualisation more ownership, management or simply greater apposite and achievable than in housing involvement in decision-making could generally through Community Land Trusts mark a real step change in devolution of for example, and social housing specifically. control of key organisations that affect their lives to local communities. This would There is already an infrastructure within constitute significant ‘re-capitalising the the social housing sector to devolve poor’ in Philip Blond’s terminology. control of housing to residents and communities. This is not expensive in the There are a number of models to choose scheme of things but means reorganising from including TMOs, which are massively the way in which assets are managed and under-represented in the housing services are delivered. And there is no lack association sector, with the exception of of tried and tested models. Transfer of the Walsall partnership of eight TMOS housing and other community assets to called WATMOS is a fully registered residents and communities - the norm in housing association and constitutes a much of the EU - within the adapted potential trailblazer for resident and governance structures of social housing, community control. All social housing would ensure that the ‘Big Society’ is a providers could be required by truly progressive policy. Government to adopt Community Gateway principles whereby flexibility of involvement allows all residents to become members and to determine their level of involvement at their own pace through a range of localised participative

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i Boyle D. (2009) ‘Football Supporters xi Mayo E. & Moore H. (Eds) (2002). Ibid. Trusts’ in the Mutuals Year Book 2009. Mutuo. London. xii Localis (2010) & Co-operative Development Scotland (2010. Ibid. ii Boyle D. Ibid xiii Co-operatives UK (2009). Ibid. iii Co-operative Commission (2001) The Co-operative Advantage: Creating a xiv Gulliver K. & Morris J. (2010) Exceeding Successful Family of Co-operative Expectations: The Nature and Extent of Businesses. Co-operatives UK. Resident-Controlled Housing in the UK. Manchester. Human City Institute. Birmingham.

iv Cabinet Office (2009) Mutual Benefit: xv Gulliver K. & Morris J. (2010). Ibid. Giving People Power over Public Services. H.M. Government. xvi Gulliver K. & Morris J. (2010). Ibid.

v Blond P. (2010) How Left and Right xvii Commission on Co-operative and Have Broken Britain and How We Can Mutual Housing (Bliss N. Ed) (2009) Fix It’. Faber. London. Bringing Democracy Home. West Bromwich. vi Cameron D. Speech - ‘Building the Big Society’ 19th July 2010. Cabinet Office. xviii Commission on Co-operative and Mutual Housing (Bliss N. Ed) (2009). Ibid. vii Woodin T., Crook V. & Carpenter V. (2010) Community and Mutual xix Gulliver K. & Morris J. (2010). Ibid. Ownership: A Historical Review. Joseph Rowntree Foundation. York. xx Commission on Co-operative and Mutual Housing (Bliss N. Ed) (2009). Ibid. viii Co-operatives UK (2009) The UK Co- operative Economy: A Review of Co- xxi Commission on Co-operative and operative Enterprise. Manchester. Mutual Housing (Bliss N. Ed) (2009). Ibid.

ix Mayo E. & Moore H. (2001) The xxii Commission on Co-operative and Mutual State: How Local Communities Mutual Housing (Bliss N. Ed) (2009). Ibid. Can Run Public Services. New Economics Foundation. London. xxiii Commission on Co-operative and Mutual Housing (Bliss N. Ed) (2009). Ibid. Mayo E. & Moore H. (Eds) (2002) Building the Mutual State. New Economics Foundation. London.

Localis (2010) Benefits and Challenges of Mutual and Community Co-operatives in Public Services. London.

Co-operative Development Scotland (2010) Making a Positive Difference to Public Services: Co-operative and Employee Owned Business in Public Services Delivery.

ix Mayo E. & Moore H. (2001). Ibid. compass

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