BLOG: An Introduction to Consortium Co-operatives

In this month’s P4P blog, Suzanne Orchard from Co-operative Development Scotland explains the potential benefits for social enterprises of adopting the Consortium Co-operative partnership model

Working as a consortium co-operative can be a great way for businesses to formalise alliances and make collaborating with others more effective.

Often when businesses and social enterprises look to grow, access new markets or tender for new contracts they face familiar barriers including lack of scale, time, finance or resources. As we adjust to the changes to how we work post COVID-19, these challenges may become magnified as organisations become even more risk averse. There may also be new opportunities to respond to fast-changing market needs through working with other businesses and sharing risks and resources.   Collaborating can be one way to break down some of these barriers and tackle opportunities.

A consortium co-operative is a separate legal entity run on a shared and equal basis by and for the benefit of its member businesses.  (Member businesses retain their own brands, identities and control over their own individual businesses.)  It can be a particularly effective way for a group of small or micro businesses or social enterprises to scale up quickly; for example, a consortium of social enterprises could deliver a large funded project.  Or, a larger business could collaborate with a smaller business or social enterprise – the smaller company benefits from the scale and reach of the larger business and the larger business benefits from the innovative, fleet-of-foot, smaller company.

With an increasing focus on community and ‘place’, and several local authorities in Scotland looking to adopt Community Wealth Building approaches, it is likely that procurement opportunities within specific geographies will increase, and with that a desire to ensure spend is retained in the local community.  This may in turn provide opportunities for collaborative tendering.

A good example of success in tendering as a consortium co-operative is Indigo House, a consultancy service for the housing and regeneration sectors. Formed by members AE Housing and is4 Housing & Regeneration, it provides consultancy support, thought leadership, research services and interim management to housing associations, local authorities and housing developers.  When tendering for new business, both companies had often found themselves up against larger housing consultancy firms able to offer clients a multi-disciplinary practice. In order to compete, they began collaborating informally.  Forming a consortium co-operative and bringing their skills together under a single brand enabled them to successfully pitch for more ambitious contracts.

Co-operative Development Scotland (CDS) is the arm of Scotland’s enterprise agencies that supports business growth through employee ownership and co-operative business models. Our services are available to all businesses and social enterprises across Scotland who are thinking about collaboration.  We can help you assess your options, understand the benefits and advise you on structure and governance.

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