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Child Care Co-operatives Introduction

Note: Further information and an information line is also available from Co-operatives UK's National Co-operative Childcare Project.
See www.cooperatives-uk.coop/childcare

There are several structures that can be used to establish Child Care Cooperatives

• Community Co-operatives
• User (Parents and Guardians) Co-operatives
• Worker Co-operatives
• Marketing Co-operatives
• Co-operative Consortia

They are defined by their membership.

Community Co-operatives

serve a defined community. Its members are anyone in that community who cares to join. It can provide facilities for that community including child care. It is very like a voluntary sector organisation in nature except that it operates
according to co-operative principles.

• members are drawn from the defined community.
• one member, one vote: the members decide what services will be provided to the community.
• the co-operative is managed by a committee elected by the members.
• committee members manage the co-operative on a voluntary basis. They may receive expenses and act in a paid professional capacity for the cooperative, but they are not paid for being committee members.
• the co-operative may employ staff
• if the co-operative makes a profit, the members may decide to re-invest it in the co-operative, or pay a bonus to the members or make a donation to a charity, or a combination of these things.

User co-operatives

are made up of the people who use the service. They are also known as consumer co-operatives. In this case it is the people who buy child care for their children

• parents and guardians of the children who regularly use the facilities are
  eligible for membership of it.
• one member, one vote.
• the co-operative is managed by a committee elected by the members
• the committee members manage the co-operative on a voluntary basis. They may receive expenses and act in a paid professional capacity for the co-operative, but they are not paid for being committee members.
• if the co-operative makes a profit, the members may decide to re-invest it in the co-operative, or pay a bonus to the members or make a donation to a charity, or a combination of these things.

Worker co-operatives

are made up of the people who work in the business.

• everyone who works in the co-operative is eligible for membership (after a probationary period). Only people who work in the co-operative are allowed to become members.
• the co-operative is managed by those who work in it, and only those who work in it may be directors of it.
• if the co-operative makes a profit, the members may decide to re-invest it in the co-operative, or pay a bonus to the members or make a donation to a charity, or a combination of these things.

Marketing Co-operatives

provide marketing services to their members. The cost of marketing their services is shared and through combining their purchasing power, members receive a service they may not otherwise be able to afford. In this case the members could be individuals, partnerships or co-operatives offering child care services.

• people or companies who use the marketing service will be eligible for membership, subject to conditions laid down by the co-operative
• the marketing service and day-to-day running of the co-operative may be provided by paid staff or by members on an unpaid rotational basis
• the co-operative is managed by a committee elected from the membership or by general meetings of the membership
• if the co-operative makes a profit, the members may decide to re-invest it in the co-operative, or pay a dividend to the members or make a donation to a charity, or a combination of these things.

Co-operative Consortia

A group of companies, co-operatives or organisations can come together to deliver a service jointly as a consortium. The co-operative nature of the consortium means that all partners get an equal say in the management of the service, regardless of the size of their contribution. A consortium could, for example, contain a workers co-operative delivering the service, a user co-operative purchasing the service from them and a voluntary or statutory body responsible for ensuring that there is adequate child-care provision.

Co-operative Principles

The co-operative principles that apply to all are:

• Open membership to all who qualify. First decide your membership criteria then apply fairly. No ruling cliques excluding others, no unrealistic hurdles to jump.
• Democratic government. Good information flow. Policy decided by general meetings of the full membership. No outside control.
• Equality. One person, one vote.
• Limited return on capital. No running the business for the benefit of outside investors.
• Education of members (so that they can play a full part in the co-operative)
• Social responsibility - consideration of the community and the eco-system in which they operate
• Co-operation with other co-operatives (to extend the co-operative system and accomplish together what could not be addressed separately)
  

The plusses and the minuses

Community Co-operatives
The plusses

The minuses

User co-operatives
The plusses

The minuses

Worker Co-operatives
The plusses

The minuses

Legal matters

Legal structure

The most popular for all the above is a company limited by guarantee with membership criteria established according to the form chosen. It is recommended to register the company first and build the business inside it. This means that everyone knows what they are joining, what their rights are and what their responsibilities are.

Those who take responsibility such as membership of a management committee will be becoming company directors. They should be provided with adequate training and recourse to professional advice to ensure that they do not operate fraudulently or wrongfully but maintain their limit of liability (normally to £1).

Common Ownership

Normally, though not necessarily, Co-operatives are common ownership organisations. Common ownership means that the assets are held in common dedicated to the purpose for which the co-operative was established. There are no
individual property rights over these assets and members cannot leave and insist that a share of the asset value is paid to them. This makes for long term security of operation and guards against internal or external take over and asset stripping.

The Practicalities

Co-operatives of any kind are best established where the objective is to bring to bear the enthusiasm and skills of a group of people and focus them on a common objective. A large part of that objective should be sustainability.
This pre-supposes providing an excellent and appropriate service to an identifiable market using adequate resources of people, facilities, cash and organisation.
There is no substitute for detailed planning and proper research. This takes time, patience and most of all, the assertiveness to ask for help. Advice on all aspects of business planning, legal registration services and
grant aid are available through our service.

Updated May 2002