should pubs become community interest companies?

[Adrian Ashton]

interesting argument from the Institute of Public Policy Research recently about pubs being able to become CICs -

http://bit.ly/atKjkx

 

resonates with some of my previous arguments about the role of pubs

http://thirdsectorexpert.blogspot.com/2009/04/how-pubs-are-like-cha...

http://thirdsectorexpert.blogspot.com/2010/02/charities-and-pubs-mo...

 

and the encouragement for more communities to take over their pubs and run them as local co-ops

http://www.cooperatives-uk.coop/live/dynamic/News2ShowArticle.asp?a...

 

 

but what do people think?

 

[John Mulkerrin]

I think its great to finally see CIC proposed as a solution on some research! both CIC and Co-op need to be better understood by the community and how they can be used in circumstances like this, its not only pubs that are having these problems and its not only charities that are delivering social outcomes worthy of rate relief.

Business rate relief can often make the difference between success and failure, we've been trying to persuade Govt to fund some generic info that we can send to all local authorities highlighting such issues (this will add to our evidence)

If I was working for a local autority rates dept id be very keen to create a positive environment for social businesses, a positive approach to rate relief could encourage a lot of job creation and I think we need to know which local authorities want to do something positive. With rising unemplyment and empty shops on the high st its time for a new approach.

I know they all have discretion, which is fine, but the inconsistency causes problems. We have CICs who have 100% relief in one area and 0% relief in another. We should have an easily available statement from each on what their policy is, we can then start to build our businesses in those areas. They need to better understand what we can bring to the table as well, so reports like this give us something to build on.

[Tom Barnett]

i think its a great idea - but the same old problem crops up. how do a body of people used to the security (!) of ISAs and bricks and mortar - traditional title etc - feel comfortable putting money in to a new company that then "locks" the asset away from them? What does the shareholder actually own after then buy the pub?

I am sure that most rural communities have a pub the love that is slowly but surely going under... and if the regulars had a collective interest in it then they would be better disposed to keep it above water. But there would need to be a really really water tight road map for them to follow. There are the intricacies of dealing with the ferocious breweries and who maintains the license... and even though CICs present a framework to cap returns, how are profits (if there ever are any) distributed to those who "invest"? And how do they exit if they leave the area - who buys the shares? And can more shares be issued when people who like the pub move to the area? Can people from out of the area buy in to the pub?

This is also subject to those individuals not drinking too much and falling out with one another when inebriated.

[Tom Barnett]

a few more questions to add to this pot...

should the railways be owned by CICs?
Hospitals?
Primary Care Trusts?
Freeholds on council properties? Housing Associations?
Post offices... personally I think this one has the most mileage - I can see it REALLY working for members of a community to have an interest in their Post Office.
Newsagents?
Land on which to grow food and keep livestock? Farms?

[Adrian Ashton]

hi Tom

thanks for your interest, and actually there are examples of businesses in all the areas you list/cite examples of, where local communities have created asset-locked bodies (not always CICs) and are running them very succesfully;

you can get loads of examples and contact details through Co-operatives UK and the Plunkett Foundation, especially as there are some current national initaitives around some of the industries/markets you mention to get more communities running their own local services

[Tom Barnett]

cool - thanks, Adrian.

Can you stick some URLs up here for people to follow to see these examples? I am glad to hear there are some.

For my own specific interest, is there a good example of a community owned post office that you can think of? Or, indeed, a pub?

Tom

[Adrian Ashton]

hi Tom

I've asked a few people I know in Co-operatives UK and the Plunkett Foundation if they can suggest who they think are the flagship examples - I know a few examples, but woudl rather you get best possible illustrations.

however, I'll check back in a few days and if they not gotten to posting anything, will put up selection of links I know of from personal involvement.

hope thats OK?

[Adrian Ashton]

so - after a little delay, here's a few initial links to examples of community owned services (shops, etc) that I promised, Tom.

if you come across others, feel free to add to this list;

http://www.plunkett.uk.net/
http://www.theoldcrownpub.co.uk/

[Denise Banks]

Adrian

Hesket Newmarket is a co-op and so the legislation does not allow a co-op to include a statutory asset lock. Others that have been set up as societies for the benefit of the community - some with the statutory asset lock are:
http://www.staronthecliff.co.uk/index.html
http://www.gll.org/
http://www.sheffieldrenewables.org.uk/

Also the community shares website at www.communityshares.org has some very interesting case studies..uk

[Adrian Ashton]

hi denise - just to clarify, a coop can be subject to a statutory asset lock if it choose to incorporate itself with a legal from that includes this feature (eg CIC, charity, ...)

many other coops who incorporate with other legal forms often choose to include an asset lock and elect to have it 'entrenched' - and so are 'policed' by the relevent regulatory body to ensure that they keep to it

you might be interested in the discussion I started up over in the Knowledge Bank recently - "CIC or co-operative" which explorees some of these points further.

[Denise Banks]

co-ops can't be charities.

[Adrian Ashton]

that used to be the case, however a couple of years ago there was the introduction of the co-op trust schools model which due to legislation that governs schools has to have charitable status;

the model is recognised by the wider co-op movement as being a 'legitimate' model, with the obvious challenge being around the defining priciple of member economic benefit: charity law prohibits members of a charity gaining materially from its activities.
However, in the case of the coop trust school model, the members' entry point is linked to their being a part of that local community - their benefit (economic and otherwise) is therefore a communal one.

more info about the model and some of its intricacies here - http://trusts.beecoop.co.uk/

its also been a popular discussion topic on a few linkedin groups recently; with everyone querying it seeming to come to the acceptance that in this particular and unique instance, a co-op can be a charity.

[Tom Barnett]

our local is about to shut down - in fact it is being boarded up this weekend - its a real shame, no one really knows what to do about it... i will show this stuff to them. thanks!