Draft:Community co-operatives in the Highlands and Islands of Scotland

Community co-operatives are multi-functional businesses run for the benefit of the residents of geographical communities or neighbourhoods, and directly owned and controlled by them. During the 1970s and 1980s, about two dozen of them were established in peripheral communities in the north and west of Scotland, often with public support provided through the Highlands and Islands Development Board (HIDB). Typical commercial activities were general shops, agricultural supply, craft workshops, hostels and other tourism projects. They have helped to stem depopulation, encouraged the development of the local economy, provided jobs, and improved local infrastructure and living conditions.

Definition
A fuller definition of the wider community business movement (of which community co-operatives in the Highlands and Islands are part) is:
 * businesses which trade primarily for the benefit of their community and are accountable to that community. They are controlled by the communities themselves, with open and voluntary membership.


 * [They] are set up to provide services to communities or develop a community business in all sectors, from utilities to distilleries. The model helps communities protect essential public services and develop new opportunities that provide wider economic, social and environmental benefits... 


 * They encourage people to get involved – either by becoming a member or by volunteering time. Investment can be raised from individuals who, as owners, are involved in decision making. The profits can then be invested back into community projects or distributed among members, generating positive local impact.

Community co-operatives are an expression of what has become known as a community-led local development (CLLD) approach.

Support policy
The HIDB had powers to encourage the formation and growth of community co-operatives, under the powers given to it under the Highland and Islands Development (Scotland) Act 1965, which had established the board with "the purpose of assisting the people of the Highlands and Islands to improve their economic and social conditions."

The development of HIDB's community co-operative scheme can be traced back to 1976, following contact with similar schemes on the west coast of Ireland, mainly in Glencolumkille in Donegal and Innisman in the Aran islands.

In November 1977, as a result of the lessons from Ireland, and a series of public meetings, the HIDB launched a community co-operative support programme to encourage enterprise initiatives in marginal areas where its conventional approach to economic development was less successful and where depopulation was increasing. In the Western Isles, where the programme was initially developed, the co-operative businesses used the Gaelic name co-chomunn (plural co-chomuinn). The pilot programme, using the 'multi functional community co-operative model', appointed two field workers to stimulate interest and offer practical support. The first phase demonstrated some valuable lessons, with successful co-ops being established in communities ranging from Ness in Lewis (population 2,500) to the island of Vatersay in the south (population 150).

A year after the launch of the HIDB community co-operative support scheme, with increasing interest arising in other communities, the programme was extended throughout the rest of the Highlands and Islands, and a third field worker, based initially in Inverness, was appointed to cover the Argyll, Highland, Orkney and Shetland council areas.

Development approach
The successful development of community co-operatives took a bottom-up approach with initial financial incentives and support from dedicated development workers. The process involved estimating feasibility, business planning and building community support.

If economic viability and community support could be demonstrated, HIDB considered grant assistance to match share capital raised by the community, on the basis that all shareholders had one vote irrespective of their shareholding. Many communities reached out to former residents as well as those living in the area and set the minimum share at £25 or £50.

Community co-operatives were registered as industrial and provident societies using rules developed for the purpose. In the early years, a successful community co-op could also secure funding from HIDB to employ a manager for up to five years. Further funding was possible if a successful grant application was made for individual business units managed by the co-operative. These were eligible for a normal regional development grant and loan package, if considered sustainable by HIDB finance officers.

In 1982 the programme-specific field officers (by that time six in number, based in Orkney, Inverness and the Western Isles) were absorbed into the wider functions of HIDB. 'They had been able to operate alongside local steering groups and provide dedicated support. Under a new plan these workers were encouraged to apply for posts in the finance department of HIDB ..but with a less proactive job description.' However, by 1985 specialised field workers were re-established through the newly-formed Association of Community Enterprises in the Highlands & Islands [ACE-HI] which, with the support of HIDB, continued the expansion of community co-operatives. ACE-HI provided significant technical support, advice and training. It was also instrumental in the very early development of electronic communication and networking through the pioneering use of RURTEL.

Results
For smaller, more remote communities in the Highlands and Islands, "the co-operatives created relatively modest – though locally important – numbers of new jobs, services, and enterprises. The initial focus of the majority of co-ops was in providing local services: they often started by taking on threatened core services like retail shops, petrol stations, without which communities would decline quickly. However, there were instances in which the investment by communities and the HIDB levered wider economic benefits from external sales.  Some co-ops developed activities that generated revenue from external sales. For example Co-Chomunn na Pairc (the community co-operative in South Lochs, Isle of Lewis ) 'exported' knitwear and farmed fish, the latter with a multinational partner. In Harris, Co-Chomunn na Hearadh, the Harris community co-op, formed a partnership with History Craft of Cirencester to manufacture locally high-quality artifacts for museums and craft centres like its own in Leverburgh, which resulted in four new jobs created.

Legacy
The community co-operatives programme and the HIDB facilitated a range of positive results not the least of which was the creation and nurturing of an internal development dynamic based on community development principles. The ability of communities, with support from agencies like HIDB (which changed to Highlands and Islands Enterprise (HIE) in 1991 ) to establish income-generating enterprises paved the way for future community land ownership and community renewable energy projects. Some of these later initiatives were led by people who had gained experience through their involvement in community co-operatives.


 * "The initiative raised consciousness of what might be possible, and inspired people elsewhere in Scotland, and the UK generally, to do similar things. It reinforced the tradition of mutual co-operation in the Highlands and Islands, building confidence and capacity, and unlocking creative potential – as well as marshalling and deploying collective resources, financial and otherwise, which could be used to attract more funding, and to implement plans. In addition, the co-ops built asset bases and revenue income, to underpin their development."

HIE continues to support community-led local development as part of its 'Support for Communities Framework 2022-2026'.

New community co-operatives continue to be established in the 21st century, typically to carry on an existing business threatened with closure.


 * When the primary school in the village of Strontian in Ardnamurchan was scheduled to close in 2016, a community benefit society was formed to finance and build a replacement school on land bought near Ardnamurchan High School. More than £900,000 was raised through a combination of grants, bank finance, local fundraising and a community share offer, as well as a payment from the council for tenant’s works. The new Strontian Primary School opened in October 2018 and has around 30 pupils.


 * Britain’s remotest pub, the Old Forge in Inverie, an isolated coastal community of 120 people on the Knoydart peninsula, reopened in 2022 after being taken over by a community benefit society.


 * [GlenWyvis whisky distillery glenwyvis.com] in Dingwall, which had closed in 1926, was reopened in 2017 after a community share offer raised £2.6 million from over 3,000 investors.