Co-operative Development Support Services Service Specification

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1 Co-operative Development Support Services Service Specification 1. Introduction 1.1 This document describes the co-operative business support services to be purchased by Co-operatives UK for one-to-one advice and cluster advice, via both the new Co-operative Bank funded Co-operative Development Support Programme (the programme) and other potential Co-operatives UK work. This specification is the reference document for all providers delivering services via Co-operatives UK s preferred provider list. 1.2 Co-operatives UK s preferred provider list is a list of potential service providers who have identified that they are able to deliver the services described in this document, have applied to join the preferred provider list and have been admitted to the list on the basis of having met pre-set criteria (as determined by Co-operatives UK). No contracts are entered into for a provider to join the list. Individual contracts are established for each package of work. There will be additional opportunities to join the preferred provider list over the next three years. 1.3 The services described in this document will be delivered as part of the programme. Co-operatives UK will also use the preferred provider list (and therefore this specification) from time to time to deliver other services which do not form part of the programme. 1.4 All of the services described in this specification contribute to Co-operatives UK s mission to promote, develop and unite member owned business. More information on Co-operatives UK s strategy is available online at 2 Roles and responsibilities 2.1 Co-operatives UK is the owner of this document and the purchaser of the services described. Organisations who apply to join Co-operatives UK s preferred provider list for Co-operative Development will become providers of the services described in this document. Page 1

2 2.2 When delivering the services described, the providers are doing so on behalf of Co-operatives UK and should positively reinforce the Co-operatives UK brand at all times. In addition, where the services are funded by an external source (such as The Co-operative Bank), providers should also be cognisant of the source of the funding, and should positively reinforce that brand at all times. In particular, when delivering services as part of the programme, providers will be expected to include any relevant (as determined by Co-operatives UK) branding and messaging related to the programme in their communications with clients. 2.3 The services described will be delivered to clients. These clients will be identified by Co-operatives UK and will have been assessed as being in a position to benefit from the services purchased. 3 The Co-operative Bank-funded Co-operative Development Support Programme 3.1 This UK-wide programme is a partnership between Co-operatives UK and The Co-operative Bank and aims to strengthen the co-operative economy, by helping new co-ops to start up, and existing co-ops to grow, thrive and be sustainable in the long-term. 3.2 The programme will run for three years with funding of 1million. The services purchased for the programme through the preferred provider list will total a volume of c.535 days. More information on anticipated volume is at Section The programme is funded by The Co-operative Bank (the funder). The Bank recently enshrined co-operative values in its articles of association and relaunched its customer-led Ethical Policy, which included the commitment to support co-operatives, including through its associate membership of Cooperatives UK. 3.4 The programme comprises online advice materials, an online community, oneto-one support, cluster advice, co-operative skills training and peer mentoring: Page 2

3 3.5 Online advice portal The programme s online portal will provide guidance materials and diagnostic tools to co-ops at all phases of their journey. This portal will be accessible incorporating imagery, videos from Co-operatives UK, advisers and other coops giving tips. Further, more detailed, information will be in the form of downloadable guides, factsheets, template documents, links to other organisations or related content, etc. It will also be designed to manage bookings and take payments. 3.6 Problem solving community When you face a problem in a co-op, often someone else in the sector may have faced the same problem and could offer you guidance. The vision here is of a thriving online community of co-operators, sharing knowledge, linking to other open co-operative initiatives here and abroad, and incorporating expert inputs at key times to engage and inspire. Once engaged and built, the community might discuss or respond to all elements of being a co-op, from start-up to growth and sustainability. 3.7 Peer mentoring Building on the successful Energy Mentoring Scheme co-ordinated by Cooperatives UK, the programme will offer a cross sector peer mentoring scheme. 3.8 One-to-one advice Approximately 400 days of tailored support over three years for a very small number of co-ops or prospective co-ops (approximately 100 clients over three years), focused on: Becoming a co-op (maximum 2 days) Employee Buyouts (maximum 7 days, match funded) Community Shares (maximum 4 days) Sustainability/growing co-ops (maximum 4 days) Strategic planning (maximum 4 days) 3.9 Cluster Advice One-day output-focused workshops for a small number of co-ops at the same time. It is envisaged that around 135 days will take place in total over the three years, servicing around 600 co-ops. They will cover, in the first year: The Co-operative Option, Page 3

4 Co-operative Start-ups, Employee Buyouts, Community Shares, Membership development Skills training One-day skills-based training sessions. In 2016 these sessions will focus on: Effective Meetings and Decision-Making, Communication and Working with Conflict, Strategic Planning and Change Management, The Essential Co-op Secretary, The Essential Co-op Director, The Essential Co-op Board (1/2 day) Sustainable Co-ops Marketing for Co-ops A number of the services described above will require the support of external organisations. The external organisations providing one-to-one advice and cluster advice components of the programme will be sourced from Cooperatives UK s preferred provider list Due to the differing requirements, peer mentoring and skills training support will be contracted separately. 4 Services 4.1 The term service is used in this document to describe a type of support being purchased. The following describes the services to be purchased through the preferred provider list, including a description of what it entails, the audience it is intended for, any specific requirements of the provider (where relevant) and the key outcomes the service is aiming to achieve. 4.2 These descriptions are subject to change as the programme develops. Providers will be encouraged to provide feedback once delivery commences and will be informed of any changes as and when they arise. 4.3 When purchasing these services, the term package is used to describe the unit of work. Page 4

5 A/ One to one advice A1/ Becoming a co-op New starts Groups and organisations that want to become registered co-operatives. Brief description Support with deciding the most appropriate type of co-operative model and structure, finetuning the governance and participation associated with that structure, and support with the incorporation process, as required by the client. Maximum support Two days Approach This will depend on the requirements of the specific client, but is likely to include some or all of: 1) Support to choose the legal form and appropriate model and prepare the governing document: a. Clarify business model how the co-op will generate income and how it will spend or distribute profits. b. Identify shared economic/social/cultural needs or aspirations (these should form objects). Clarify member benefit is it straightforward profit distribution, access to service, social, etc? c. Clarify membership categories d. Clarify governance options e. Clarify financial structuring (how they will raise funds and impact on structure). 2) Developing membership criteria (i.e. who can be a member worker/user, etc and associated criteria such as hours worked or service use) and member agreement (setting member obligations and responsibilities at the outset). 3) Developing a member engagement and/or member training plan to include a board training plan for larger co-ops. Note - it is anticipated that the delivery of member training itself will not form part of this support and will be accessed through Skills Training or Cluster support. Note: The registration process itself is separate from the above. This will be undertaken using established Co-operatives UK methodology Direct, Plus and Advanced Packages as required. Where these are inappropriate, established alternatives (Plunkett, CDS) may be used, and the provider should then encourage membership of Co-operatives UK. Page 5

6 A2/ Employee Buyouts Employee buyouts Owners then staff of non-co-op companies looking to convert. Brief description Expert support (matched by the client) for organisations planning a co-operative employee buyout. Support with developing stakeholders, assessing the viability of a buy-out and establishing and implementing an action plan which leads to a buy-out of an existing business. Maximum support Maximum 7 days including a feasibility study (day 1), match-funded by the group. This match funding fee (maximum 2,400) will be reimbursed to the client once it has completed and registered as a co-operative organisation. The provider will be paid by the client directly for work undertaken. Approach Phase 1 Feasibility study (one day) Co-operatives UK pays a provider to undertake a one-day feasibility study of the organisation. This may include: - An overview of the business. - Clarification of the owner s withdrawal expectations. - Recommendations of the most suitable model of co-operative employee ownership for the business. - A financial assessment to understand the potential buy-out timescale. - An implementation plan with number of days support required and costs associated. This feasibility study will be given to the client, who will then decide whether to proceed. If the provider feels that co-operative employee ownership option is not right for the client then no further support will be provided by the programme, but alternative support might be offered by the provider. Phase 2 Delivery (max 6 days) The programme agrees to provide up to 6 further days of advice (matched 50:50 by the client), to a maximum cost of 2,400 plus VAT. If the implementation plan requires more than 12 days support in total, the additional days required will be paid for by the client. This amount is payable directly to the organisation, only when it has completed the process and transitioned to the new structure. Page 6

7 Phase 3 Embedding into the movement Two years of membership of Co-operatives UK is included in the deal as a way of welcoming them to, and embedding them into, the movement. Monitoring Client agrees to provide monitoring information 6 months and 12 months after support delivery to measure impact. Outcome New co-operative employee buyouts Measured through New members of Co-operatives UK Client and provider feedback Page 7

8 A3 Sustainable/growing co-ops Existing co-ops (incorporated and trading for more than two years) Brief description Support starting with a board level diagnostic review, leading to an action plan for growth and sustainability. Further support to implement plans to sustain jobs, grow membership, trading income and profitability. Maximum support 4 days Approach Phase 1 Diagnostic review (half day) Diagnostic review with key team member or members to identify the relative strengths and weaknesses within the client in terms of business performance, management and governance. Phase 2 Action planning (half day) Action planning session with board or members to clarify, plan and negotiate strategically important development activities which can be demonstrated to sustain jobs, trading income and profitability to include target estimates of likely benefits. Including success measures and rough projected return on investment will assist with prioritisation, encourage investment by co-ops on further development in the future, and aid reporting. Phase 3 Approval The proposed actions in the action plan should be prioritised and recommendations should be made to the programme, which consider the full programme offer, not just one-to-one advice (e.g. the provider should recommend cluster support or skills training if key actions can be tackled through those channels). Phase 4 Delivery The programme agrees to provide up to 3 days support within a fixed timescale - this is highly dependent on phase 2 and could cover a variety of areas or be focused on one particular area. If some of the desired support is not deliverable within the fixed timescale or where further support is needed, the client will be encouraged to purchase this directly. Monitoring The client agrees to provide monitoring information 6 months and 12 months after support delivery to measure impact. Page 8

9 Outcome Action plan created, with targets being hit over time. Jobs, turnover, profits etc, sustained or increased. Measured through Client and provider feedback Page 9

10 A4/ Strategic Planning Existing co-ops (incorporated and trading for more than two years) Brief description Specialist support to write a strategic plan for the client this might include marketing, HR, finance, communications. Maximum support 4 days Approach Phase 1 Clarify the scope and approach (half day) - Initial phone call with key contact to clarify the purpose of the plan based on initial information gathered during filtering stage. - Workshop with board or members to ensure that the right plan is written treating the strategic issue not the symptom, and defining the parameters of the plan and how its development will be delivered (i.e. capacity building or consultancy). Stage 2 Delivery (3.5 days) The programme provides up to 3.5 days to write the plan. This may be delivered through: a) Consultancy approach The plan is written directly by the provider. b) Capacity building approach The provider is required to run workshops to support the client in writing the plan. While this would be the option preferred by the programme, as it aids capacity building and buy-in, its appropriateness may depend on the technical knowledge required, the skills and experience of the team and the urgency of the plan. Note: all final plans to be sent to the programme as evidence of work and quality, and must include specific targets, with associated monitoring and reporting mechanism feeding into the programme. Monitoring Client agrees to provide monitoring information 6 months and 12 months after support delivery to measure impact. Outcome Strategy in place and being implemented, and targets hit over time. Page 10

11 Measured through Client and provider feedback Regular monitoring of progress of client. Page 11

12 A5/ Community Shares Co-operative and community enterprises considering, developing and launching a community share offer. Brief description There are two pathways: Development support: Support to enable the client to develop their community share offer, including associated work on the underpinning business model, governance arrangements and community engagement. Assessment support: Support on ensuring a client s share offer meets good practice via the Standard Mark review process. For both pathways, the support will be carried out by providers licensed by the Community Shares Unit and only those clients intending to strive for the Standard Mark will be supported. Maximum support 4 days Approach Development support: This will involve the client completing the Step-by-Step diagnostic tool to the relevant stage of their progress. The required actions that emerge from the tool will inform a work programme that the provider will develop through 0.5 days time with the group. The provider will use the remaining time to work through the action areas with the client. Assessment support: This will involve commissioning a licensed practitioner to complete a Standard Mark Review using the group s offer documentation. This comprises an initial assessment, a feedback session to the group and then a final assessment once the feedback has been actioned by the organisation. If the final assessment is positive, the Standard Mark will be awarded. Monitoring Client agrees to provide monitoring information 6 months and 12 months after support delivery to measure impact. Page 12

13 Outcome Community share offer launched. Share capital raised Successful Community Shares offers Members engaged Measured through Client and provider feedback Regular monitoring of progress of client. Page 13

14 B/ Cluster support B1/ The Co-op Option Context A one-day development workshop for groups to determine whether the co-operative option is right for them, and to establish what further work they need to do before registering as a co-operative. Early new start (and potentially employee buyouts and conversions) Approach The cluster session will be structured as a one-day workshop, with up to 10 potential coops. The day will be developed in response to the needs identified during the application process. Outcome for programme Number of people introduced to the co-operative option. B2/ Start-ups Context A one-day development workshop for co-operative start-ups to assess the viability of their business proposition and to identify what actions they need to take to get started as an incorporated and trading co-operative. New start Approach The cluster session will be structured as a one-day workshop, with up to 10 potential coops. The day will be developed in response to the needs identified during the application process. Outcome for programme Number of people working on co-operative start-up. Page 14

15 B3/ Employee Buyouts Context Employee buyouts have been seen as a huge opportunity to grow the co-op movement and economy for well over a decade. While there are some good case study examples, there has been little significant progress made in creating a robust programme to bring either failing businesses or successful businesses considering succession into the movement. This will be a one-day meeting designed to precede and support the one-to-one activity focused on Employee Buyouts. It may cover: What is a Buyout? What is Employee Ownership? Ownership models: - Direct Ownership - Indirect Ownership - Hybrid Ownership Explanation of the Employee Buy-Out Process, including: - Situation of the owner - Empowering staff and establishing a staff steering group - Buyout plan - Feasibility study - Business planning - Legal and financial implications - Staff training - Timings (how long this might take) Predominantly aimed at the existing owners looking for succession options. A potential secondary audience would be employee representatives if this is deemed to be a need. Approach A one-day meeting with a small number of people (max 4). Outcome for programme Number of small businesses considering buyout as an option, and informed of what this entails. Page 15

16 B4/ Community Shares Context A growing number of communities are turning to a form of finance that offers local people real and meaningful ownership of valued assets such as pubs, shops, renewable energy schemes and even piers and football clubs. Content to include: Business model sets out how community-owned business models operate with a focus on bringing various stakeholders into the business to generate competitive advantage. Community engagement an overview of how to engage a community in an enterprise initiative through awareness, membership and participation. Governance a focus on co-operative and community benefit society models to enable democratic ownership and involvement. Raising finance accessing capital finance through community shares to generate locally-based equity. Community Shares Approach The cluster session will be structured as a one-day workshop, with up to 20 co-ops, introducing groups to the theory behind the dimensions of community shares, alongside a series of group-based exercises. The key outcomes of this cluster support are to introduce participants to the fundamentals of community shares, to help them determine whether this is an approach they want to explore further. Specifically, the support will: Give communities an informed understanding of the key dimensions of community shares: business planning, community engagement and governance. Engage the group to build a common identity and purpose to underpin any prospective community venture. Capitalise on other approaches and methodologies which unlock sustainable business models i.e. community asset transfer. Outcome for programme Number of groups considering community shares. Page 16

17 B5/ Membership development Context Membership is core to a co-operative s development. Once the initial flurry of activity at start-up has subsided membership can often be an area overlooked or taken for granted. A growing and well engaged membership community is critical to the long term survival and prosperity of a co-operative. This one day workshop on membership development for existing co-ops is intended to cover the core areas of membership management: recruitment, member engagement, retention and how to end a relationship well. Existing consumer and community owned co-operative looking to grow and develop their membership. Approach The cluster session will be structured as a one-day workshop, with up to 10 co-ops. The session will introduce core concepts of managing a growing a membership. The session will cover theory and practice through presentation, group-based exercises and peer learning. Specifically the support will: Explore effective ways to promote membership and strategies for recruiting more members. Understand the member journey and levels of member participation. Discuss practical ideas, activities and tips for involving new members and increasing member engagement. Explore the need to understand members experience and reasons for leaving. Outcome for programme An increased number of members in participating co-operatives. Co-ops reported confidence regarding how well they are managing their membership processes. Page 17

18 C/ Other support C1/ Agricultural Co-operative Development support Agricultural Co-operatives Brief description Specialist support to agricultural co-operatives, including but not limited to: Strategy / Planning Finance Marketing Communications Leadership Negotiation Member engagement/commitment Business management Supply Chain C2/ Generic Co-operative Development support Any co-operative or potential co-operative Brief description Generic support comprising some elements of one-to-one or cluster support to service group A above, but which falls outside of the co-operative development support programme. Page 18

19 5 Joining the preferred provider list 5.1 Organisations wishing to join the preferred provider list will need to complete an application form, accessed via Co-operatives UK s website, and return it to by 5pm on Friday 22 January. 5.2 Completed application forms received by the advertised deadline will be reviewed by Co-operatives UK against set criteria including: Technical expertise Quality and reliability Innovation and ethics 5.3 Successful applicants will be informed in writing that they have been invited to join the preferred provider list. 6 Matching and delivery 6.1 Packages (and therefore clients) will be matched to providers based on: Which providers have been approved to provide the particular service required. Referrals into the programme by a particular provider/specific requests from clients. Geography Specialist expertise/experience/knowledge which will be useful to that particular client including sector specific expertise. Fairness of distribution across providers. 6.2 The provider will then be offered the package. The provider may decline to deliver, although this will be noted by Co-operatives UK. If the work is accepted, a service contract will be prepared. This will detail the package, including the client, the number of the days and the service type to be delivered. The provider will then be put in touch with the client to deliver the service. 6.3 Co-operatives UK will make every effort to ensure that clients receiving support are in a position to achieve the desired service outcomes. 6.4 However, in the event that the provider ascertains part-way through delivering a package under service group A (one to one advice) that the client is not at the right stage of development to achieve the outcomes, the provider should raise Page 19

20 this with Co-operatives UK and work together on signposting to alternative support and/or identifying a suitable time for the client to reapply for the support. Providers should not continue delivering to a client who they judge are not ready for that support. 6.5 Likewise, if the provider identifies that having delivered cluster support under service group B to a client, that this client hadn t been ready for this support, this should also be raised with Co-operatives UK afterwards. 6.6 In general, Co-operatives UK welcomes continual feedback from providers on the clients they are being matched with in terms of suitability for the services received and referrals on from service group B to service group A (in particular) or referrals to other programmes. 6.7 Where providers are delivering packages under service group A and B they will be expected to have an understanding of the programme as a whole, and will directly contribute to (and therefore work towards) meeting the programme s key performance indicators once established. 7 Volume 7.1 Being accepted onto the preferred provider list does not guarantee any work due to the demand led nature of the programme. 7.2 The volume of work under each service being purchased through the programme has been estimated, within the context of the finite resources provided by the funder to Co-operatives UK. 7.3 For the one-to-one support (service group A), the maximum allocation of days for each element will be as follows: Becoming a co-op 2 days Growth 4 days Strategic Planning 4 days Employee Buyouts 7 days (match-funded and payable to client on registration) Community Shares 4 days It is envisaged that just over 400 days will be delivered over the three-year programme (50 in 2016, over 170 in 2017 and over 170 in 2018). We anticipate Page 20

21 supporting over 100 clients via one-to-one support, and the focus of this support will be driven by demand, and the quality of the applications. 7.4 For the cluster support (service group B) the programme budget allows for 135 days of cluster support over the three years, with 15 of these days in The intended client numbers vary by subject. 7.5 Service group C is entirely demand led and therefore no estimates of the volume of work can be provided. 8 Rate 8.1 The day rate for provision of services under service group A and B will be 400 per day, excluding VAT and reasonable travel expenses. For other services the day rate may vary, and on occasion be negotiated on a package by package basis. 8.2 For service groups A and B, clients will be charged a small fee by Cooperatives UK to access the support (with the exception of services A2, B1 and B2). This will be just 100 or 75 for Co-operatives UK Members, and is a flat rate, irrespective of the number of days accessed. This fee has been included to ascertain the level of commitment of the client, as learnings from previous co-operative support programmes have suggested that any advice deemed to be free is valued less highly by clients. Co-operatives UK will reinvest these monies into the support provision. 8.3 Providers will invoice Co-operatives UK on completion of the work for all services, with the exception of service A2 where the client will be invoiced (the client will be reimbursed by Co-operatives UK on registration). Co-operatives UK s payment terms are 30 days. 9 Quality 9.1 Co-operatives UK is committed to ensuring that all of the services delivered to clients are high quality. All of the packages delivered through the preferred provider list will be quality assured, with the focus being on the quality of the services delivered, not the quality of the provider. Page 21

22 9.2 The quality assurance procedure for all service groups and types will include: Reporting Providers will be required to report on the service delivery on at least one occasion for each client supported. This reporting will capture what has been delivered, challenges faced, written outputs and outcomes arising from the package delivered. Client feedback Clients will be given the opportunity to provide feedback on each package they receive. Complaints Clients will be able to file a formal complaint which will be investigated by Cooperatives UK using the appropriate complaints procedure. 9.3 Specific quality assurance methods will also be deployed where appropriate for specific service types, linked to the intended outcomes and key performance indicators for those services. Providers on the preferred provider list will be made aware of agreed key performance indicators for the programme once determined. Page 22

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