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Speaker: Al Jack Organisation: Radical Roots/ Rootstock Website: Radical Roots Radical Routes (RR) was set up to help co-ops setup, so that groups could obtain security of tenure; for a stable base from which to do other things. RR is made up of radical co-ops who believe in grassroots and consensus decision making, social justice, environmental issues/ impact. All the co-ops are Industrial and Provident Societies (IPS) and have a mutual structure, therefore assets are maintained within the co-op movement. Most are housing co-ops, with some workers co-ops and now social centers. RR makes seed loans to co-ops (which is why most co-ops join RR); this opens up the opportunity for mainstream finance; generally the mortgage is financed 30% from RR, then 70% from commercial banks. Radical Routes has made 39 loans to co-ops over 15 years, amounting to Ł660,000; all of it has been recovered even though 2 co-ops have gone bankrupt. RR offers support to co-ops, legal advice/ structures, training in social dynamics, mediation services. Associated with RR are: Upstart: offer business assistance/ help to workers co-ops. Catalyst: Regsiter co-ops, advises and assists co-ops setting up. Members are required to do voluntary work for RR. RR members also need to be working for social change. RR stipulates that members of the co-ops should not be earning more than 2 times benefit level; but this is felt to be too dogmatic and excludes many who might have been good co-operators, and we are considering leaving this type of rule for co-ops to decide on. New Projects: RR has been looking at 2 new structures recently: Community interest companies Limited Liability Partnership: After hearing about the idea, it was discussed in working groups. They identified issues around this type of structure: 1. common ownership only extends to the partners in the LLP. 2. IPS (Industrial and Provident Society) means that labour must employ capital, however, profit from an LLP is distributed to partners/ members. However, these issues can be worked around, and are currently being discussed, but Radical Routes does not want to change structure too much, too quickly; will wait until it is right. Developing new booklets: Ecological Footprint measure for properties to work out their impact on the environment Community supported agriculture (ie agricultural co-ops, urban allotments) Tenancy conditions in housing co-ops; esp to clarify eviction proceedingts. Rootstock tries to bring capital in to use to setup co-ops, new co-op renovations. They have approached older, larger, more established co-ops to persuade them to invest their reserves in Rootstock, instead of keeping them in traditional banks. It has been a learning process, and issues such as security of the investment, auditing procedures have arisen. Challenges Problems that RR has experienced in relation to Worker’s Co-ops (WC): Members of workers co-ops, who work a 40 hour week, find it hard to contribute to RR with their time and energy. When lending to workers co-ops, RR has not been prepared to “take such risks”. Lending to WC is riskier in that if the business fails, assests are intangible), while Housing Co-op property is saleable. RR has a lot of experience looking at WC business plans. But are still “overcautious” in lending to WC in past, therefore not many have been attracted to join RR; RR are now looking at ways of bringing WC's into the network. A successful venture with WC’s has been a short-term loans, where WC’s can borrow up to Ł5,000 for any hiccups/ to buy new equipment. The reasons for a slow-down in RR activity has been the high housing prices, low interest rates which: high rents to cover the mortgages on the properties, therefore the co-op option is not that attractive financially. Bank interest rates low but therefore RR loan offers not that attractive. Financial Services Authority (FSA) aware that some IPS groups are working as unregistered banks called Community Benefit Societies (eg Shared Interest (Fairtrade organisation raising money to facilitate fair trade companies in the developing world), Rootstock). There is a danger that the FSA will attempt to regulate the industry, meaning more beaurocracy, training staff, written purpose statements>, etc. Some ask whether it will be worth continuing in this environment. Radical Routes will need to work with the DTI, Treasury; can it remain a radical organisation? It will mean that Rootstock will need to become a professional organisatoion, move away from unregaulted ways of doing things.	AUDIO 1 AUDIO 2
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