Posts Tagged: Social Enterprise Coalition

Cold climate and a government charm offensive at Voice11

At the start of
Voice11, the biggest event in the social enterprise calendar, the chief
executive of the organisers, the Social Enterprise Coalition stood up and said this
was completely different from any event that had gone before.

Read more on Cold climate and a government charm offensive at Voice11…

Many charities don’t realise how bad their pension problems really are

A few recent stories highlight the impact of the wider pensions crisis on the charity sector.

The combined pensions deficit of the 20 largest charities is around £720m, according to a study by Alexander Forbes.

And
last week, two pensions specialists who advised charities in the
Scottish Voluntary Sector Pensions Scheme – a multi-employer scheme for
small charities – came out and said they believe the scheme presents a danger to many of the charities involved.

A
year ago, an expert predicted to me that at least one major charity
would go under because of its pensions deficit – and it’s certainly
true that there are some out there with major deficits to worry about.

But
in truth, it’s likely to be the smaller organisations, such as those in
the Pensions Trust scheme, that really suffer. They can’t access good
professional advice, they can’t use their reserves to ride out
financial volatility and they haven’t got the in-house expertise to
know if they’ve made the right decisions. Many have signed up for
schemes on the advice of partner or parent organisations that will
prove wholly unsuitable.

The key question is how many other
charities up and down the country are enrolled in local authority and
other multi-employer schemes that are totally unsuitable for them, and
as a result have deep problems that they are totally unaware of.
Probably a lot.

Many of the charities in the Scottish scheme were not aware of the pensions problem they had on their doorstep, according to this blog by David Davison, a pensions consultants who has advised several of them, and this seems to be a common problem.

Many
small charities discover too late – often when merging or shutting down
– that a six or seven-figure debt, larger than their annual income, is
to fall due any moment.

It’s a particularly serious problem for
the trustees of unincorporated charities. They are personally liable
for the debts of their charity.

And, like this trustee, they can find themselves owing an awful lot of cash.

Read more on Many charities don’t realise how bad their pension problems really are…

Cooperatives are enjoying a moment

Once charities were seen as the magic bullet for public service reform. But now their place seems to have been usurped by another part of the third sector: cooperatives.

Last month, Shadow Chancellor George Osborne promised to free public sector staff to form employee-led “John Lewis” style co-operatives and sell their services back to the taxpayer. The Social Enterprise Coalition is right behind the idea.

But while all attention seems focused on the mutualisation of the public sector, some are asking whether it is the private sector that is most ripe to benefit from the adoption of the cooperative ethos and structure. Last month, to rather less fanfare, umbrella body Cooperatives UK called for legislation to give football supporters the right to convert their clubs into cooperatives, provided 75 per cent of season ticket holders were in favour. The market failure which has seen clubs like Portsmouth brought to the brink by reckless owners could be replaced, the argument goes, by genuinely responsible ownership.

Another campaign, run by the Alliance for Finance, is calling for the re-mutualisation of Northern Rock, the building society-turned-bank that sparked off the financial crisis in 2008. Instead of being sold back to the private sector, argues secretary Russell Greig, “the new company could be turned into a community-owned organisation, serving the needs of the communities and able to re-invest in them.”

In their influential new book, The Spirit Level: Why Equality is Better for Everyone, epidemiologists Richard Wilkinson and Kate Pickett argue that “the concept of a company being owned by outside investors has implications that look increasingly anachronistic.”

Citing the success of cooperative experiments such as the huge Mondragon Cooperative group in Spain, they call for tax incentives and legal support to begin a gradual conversion of the economy to employee ownership and control. Much like John Lewis, in fact. Current record levels of inequality would be radically reduced, people would regain the sense of being part of a community, and other social blights such as mental ill health and crime would be alleviated.

The intellectual inspiration behind Osborne’s cooperative proposals is Red Tory Phillip Blond, whose pamphlet, The Ownership State pre-figured the Tory plans. But Blond’s lesser known opponent, Blue Labour’s Maurice Glasman, is also an advocate of mutualisation. He argues that all institutions, public and private, with more than 50 employees, should adopt a new form of governance, giving equal weight to workers, owners and the local community on their boards.

Mutualism could be the idea of the future. Just in more radical ways than George Osborne had in mind.

Read more on Cooperatives are enjoying a moment…