Economic development doesn’t just mean property (part 3)

By - Tuesday 11th February, 2014

In part three of Sean Creighton’s look into the local economy, he explores the benefits of Croydon’s not-for-profit scene

Image taken by Bob Walker and used under Creative Commons licence.

There are many people in Croydon working together ‘co-operatively’ in a multitude of ways, not for financial profits but for wider cultural, social and economic benefit. These include Save the David Lean Cinema Campaign, the Croydon Citizen collective, Croydon Radio and Croydon Tech City, the BME Forum, the Council for Voluntary Action (CVA), the Citizen Advice Bureaux and Women’s Aid.

Croydon’s social economy sector comprises at least 1,763 charities, mutuals, co-operatives, social enterprises, community and voluntary groups (CVA estimate State of the Voluntary Sector report). Some are registered as charities, some as charities and companies limited by guarantee, some as friendly and industrial and provident societies and community interest companies. The majority are unregistered because their income and expenditure is too low. Collectively these can be called the ‘not-for-profits’.

Last year saw the registration of several new not-for-profit limited guarantee companies: Croydon Almshouse Charities Trustee Company, Croydon Care Homes, Croydon Old Town Portas Team CIC, Croydon Somali Community Development, and Purley & Kenley Churches Together Food Hub. Not all the over 970 charities which are registered by the Charity Commission as operating in the borough will actually be operating here, but have the aspiration to do so and the CVA estimates that 433 are.

Compared with many areas the economic value of Croydon’s social economy sector is huge because of the land and property wealth of the historically charitable Whitgift Foundation. As a group, the growing number of academy and free schools are becoming an important economic block. There are concerns about how the larger players operate, especially the Whitgift.

Since 2010 there have been charities exempt from registering with the Charity Commission, and are private companies with no share capital and are limited by guarantee. Another large not-for profit group are the housing associations operating in the borough and elsewhere, as well as locally based ones.

Compared with many areas the economic value of Croydon’s social economy sector is huge

The Co-op Group has a number of retail stores and funeral parlours and apparently owns other property. Being poorly managed and stocked and with no connection with their local communities the Co-op’s retail stores face an uphill struggle to increase customer share and have to deal with the contradiction of not just selling their own and other co-operative producers brands, but those of their capitalist rivals. The Group owns some empty shop units on Norbury High Street, and is believed to own other property in the north Croydon area. It does not have a good record of working with the community and the Council on this property portfolio.

There are many national not-for profit organisations which provide services in the borough and many have branches, including Nationwide and the employee partnerships of John Lewis Partnership with its retail store on Purley Way and Waitrose in George Street. The National Trust owns Selsdon Woods which is managed for it by the Council. Age UK has its own separate Croydon charity which had an income of £1m. The charities which run shops contribute to the local economy, enabling people to recycle unwanted possessions, others to purchase them and both thereby contributing to financially supporting the charities.

The Future for the Social Sector

As elsewhere Croydon’s social sector is fragmented, often in separate silos, with inadequate methods of cross-communication and in some parts rife with historic personality disputes. Questions that need asking include whether the role of not-for profits in Croydon can be improved, strengthened and their share of the local economy be grown? If the answers are affirmative how can this be achieved?

Croydon Citizen readers interested in ideas about boosting the social economy might like to read the book People Over Capital: The co-operative alternative to capitalism. Of particular interest to supporters of Croydon Tech City would be Open Source Capitalism written by Nic Wistreich and discussing the importance of the ‘co-operative’ principle in the web. Readers might also like to look at the work of the Baxi Partnership’s in assisting the creation of employee-owned businesses. The David Lean Cinema Campaign might consider showing the US documentary We the Owners which Baxi has been promoting here and asking a Baxi representative and staff from the Purley Way John Lewis to lead discussion.

If Labour wins in May and it starts to explore the potentiality of the Co-operative Council model, it will need to think very creatively and openly. It will be a challenge to politicians and officers. It looks to Lambeth as a model. However, the Lambeth approach has been messy and very much a top down initiative announced with no wide-spread community debate. A similar approach in Croydon will not unite all those across the borough who want more empowerment. If the Centre for Local Economic Studies’s approach (see parts 1 and 2) is adopted then the Council will need to adopt a leadership and enabling role rather than a command and control one, especially given the ever decreasing revenue funding it will have available.

The freeing of Council assets through asset transfer to the social economy, like the Fairfield Halls building to the charity, and the creation of significant worker co-operatives linked to the establishment of a Croydon Bank, could create an institution with a secure base able to attract investors. This could be a significant jolt to the local economy in the short, and a locally controlled basis for growth in the long, term.

Some questions that could be usefully addressed are:

  • Should the not-for profit Carillion subsidiary running the libraries be freed from Carillion control and turned into a freestanding social enterprise?
  • Should the National Trust take back the management of Selsdon Woods from the Council?
  • Should a Croydon Bank be established with the Council, Whitgift, the local housing associations, and other not-for profits committing themselves to open accounts?
  • Which sections of Council workers might be interested in becoming staff mutual?
  • Could a worker co-operative be established to take over the street cleaning and refuse collection contracts?
  • Can there be more support for co-operative and co-ownership housing schemes through e.g. leasing or asset transferring empty Council buildings to them for conversion?
  • Will the Council establish resident led Ward Committees to enable Ward Councillors to effectively engage in dialogue with residents and their organisations about the particular issues affecting the neighbourhoods in that Ward and the way the Council services operate there, and with a budget to be able to undertake action for agreed improvements?
  • How can the not-for-profit organisations co-operate together on strengthening their combined economic role?

And finally how are conflicts about the role of some of them to be handled, especially in education like the Whitgift Foundation and the organisations controlling the growing number of academy and free Schools?

Sean Creighton

Sean Creighton

A former employee of and freelance project worker with community and voluntary organisations, Sean is active with Croydon Assembly and with the Planning and Transport Committee of the Love Norbury group of residents associations. He is Chair of the Norbury Community Land Trust. He is a historian of Croydon and South-West London, British black society, social action and the labour movement. He coordinates the Samuel Coleridge-Taylor and Croydon Radical History networks. He runs blog sites covering Croydon, Norbury and history events, issues and news. He runs a small scale publishing imprint called History & Social Action Publications. He gives talks on a range of history topics and leads history walks.

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