Award for LWM co-founder of the Aston Reinvestment Trust

pat conaty community finance award

The Citi Foundation and Community Development Finance Association awards recently recognised several organisations finding innovative ways to finance the communities that need it most.

Pat Conaty received an individual award for working to improve access to finance and support the community development finance sector. On the right is Shamima Begum, the other individual award winner.

Pat first brought the CDFI concept to the UK from his native United States. He set up several CDFIs, such as the Aston Reinvestment Trust in Birmingham, and innovated the products, forms and funding that CDFIs use. ART’s loan support  has now created or safeguarded 5000 jobs and over 650 loans have been delivered since 1997.

Hundreds of thousands of people have been enabled to access fair and affordable finance in the UK through CDFIs, which also helped to create over 8,000 businesses in 2013 and almost 12,000 new jobs, delivering Start Up Loans, New Enterprise Allowance and Regional Growth Fund programmes.

To read more about the work of CDFA and the awards go to http://www.cdfa.org.uk/2013/10/09/time-to-celebrate-finance-heroes-in-the-uk/

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The Resilience imperative – Cooperative Transitions to a Steady State Economy

resilience imperative conatyLocalise West Midland’s co-founder, Patrick Conaty, has just published a book co-authored with Mike Lewis: The Resilience imperative – Cooperative Transitions to a Steady State Economy. It examines many elements of a resilient local economy, collating and critiquing many examples of how this has been achieved all over the world over the last 150 years.

The term ‘resilience ‘ is coming to the fore; the American organisation of that name focusses on building community resilience in a world of multiple emerging challenges: “the decline of cheap energy, the depletion of critical resources like water, complex environmental crises like climate change and biodiversity loss, and the social and economic issues which are linked to these”.

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Extracted from Pat’s interview with Naresh Giangrande from the Transition Network:

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NG: Why should someone involved in a Transition Initiative read this book?

PC: Mike and I were aware that although there have been many social and environmental change solutions developed, there has been a lack of strategic thinking. How can we join these partial solutions up? Through co-researching and co-writing the book over three years, we felt that we could clarify a Great Transition strategy for going forward by bringing together different fragments of positive change strategically and practically. We saw a need to bring ecological and cooperative economics together. Kenneth Boulding, a founder of ecological economics was the first to call for a Great Transition in the mid 60s, and saw the need to link cooperative and ecological economics together. . .

NG: You were involved in the 1990’s in The Real World Coalition seeking to bring together the third world development, green movement, social justice movement, small business, and micro credit movement.   Is this book in some way an expression of that impulse?

PC: The Real World Coalition united over 30 NGOs in the UK from these sectors and was led by Jonathan Porritt, Sara Parkin and Mike Jacobs. It was unique in that it spent three years developing a common manifesto among the NGOS. We need something like this again. How do we unite the fragments of change, to tackle the big issues? We have to come together .Yes this book is looking at the intervening years and what are the practical, tried and tested ways that people have been cooperating and  been successful in creating the pieces of local resilience . . .

NG: If you were to synthesize ecological and cooperative economics what would you come up with?

To root the integrated theory with practice, we looked at basic needs – food, shelter, finance, and energy services – and how could we meet human needs  co-operatively and what are the practical ways that have been pioneered to satisfy these needs and build a sustainable society  . . .

NG: I loved your tables at the end of chapter showing the costs to an average family.

PC: Yes we took a family of four and looked at what if we were addressing their needs in the new economics way and what would be the impact on their household budget.

NG: And the result?

PC:  We substituted usury based on high rates of compound interest with mutual fee based money and private energy and food monopolies with energy and food coops. We also show savings by converting housing to Community Land Trusts to take the land cost out of the market. The result we found is that there are significant savings to be made in each instance and the cumulative results show the practical potential for a steady state economy.

For an average family of four, you make a savings on energy and financing of over $360,000 over 25 years. Local organic food would be more expensive, but the net savings including food are still $280,000 over 25 years. We converted this to life hours which translated into saving 10 hours a week per household. This is significant . . .

NG: You have a keen sense of how there is nothing new. The REconomy project, need for land access, and social justice. Others have been over this ground many times before.

PC: We have lost sight of the historic and international struggles over that past 170 years for achieving land reform, economic democracy and for a co-operative economy.

As a result each generation typically starts with a blank page which is tragic because we lose sight of what these struggles can tell us so we can move forward faster and more effectively.

I am convinced that cooperative solutions lie at the heart of the new economy. We explore in diverse chapters the growing social solidarity economy internationally – which is generally below the radar – but none the less a powerful force. It is often unaware of its power, despite the fact that co-ops globally employ more people than multinationals . . . Some exciting work we show is going on with La Via Campesina uniting small farmers globally, in Quebec with co-op federations in Montreal and in the social co-ops in Northern Italy.

 

The Resilience Imperative Michael Lewis and Pat Conaty New Society Publishers 2012. Paperback: ISBN: 978-0-86571-707-7; ebook ISBN: 978-1-55092-505-0

Read this interview in full on the Resilience website and an interview with Mike Lewis here.

 

 

Solving fuel poverty – an update

 

Chart 4.3 in a 2011 DECC report showed that the West Midlands had highest rate of fuel poverty with around 26% of households requiring to spend more than 10% of their income on fuel to maintain an adequate level of warmth. A Chamberlain Forum article confirms that this position has been maintained, with a slight percentage decrease.

 Department for Energy and Climate Change’s 2011 report

LWM’s ‘all time’ top individual post was in the website’s Activities section. Solving fuel poverty: opportunities from Green Deal and localisation was published in December two years ago and, because of the interest shown, Phil Beardmore sent the following update about action on fuel poverty:

Although there has been some limited progress in tackling fuel poverty in the last twelve months, this has been largely wiped out by the rising cost of fuel and the reduction in incomes for the poorest people.  A welcome development has been the availability of ECO (Energy Company Obligation) funding at up to 100% for vulnerable households – those low-income households with children, and/or frail, elderly, disabled members.

Although a brokerage system is being developed by DECC which will give new players such as the Energy Saving Coop access to ECO for local schemes, by and large ECO is controlled by the Big Six and it is likely that they will continue to cherry-pick where and when it is spent.

One of the factors affecting cherry-picking is the ease, or otherwise, with which it is possible to get planning permission for external solid wall insulation.  We note that whereas there has been widespread delivery of this measure in Wolverhampton and Stoke, including on more attractive pre-1919 properties in areas such as All Saints in Wolverhampton, it has been patchy in Birmingham.  While there has been widespread use of external wall insulation on less attractive inter-war properties in areas such as Bordesley Green and Northfield, it has proved more difficult to get planning permission in areas such as Handsworth and Sparkbrook, where there are more attractive facades like the one on my house.  We know of one insulation scheme which has under-delivered due to uncertainties over the length of time to get planning permission, if it is granted at all.  It seems that Planning Officers and utility companies have both dug in over their respective positions.

There are two sides to every story and this is no exception.  Some utility companies have made no secret of the fact that they prefer to invest in energy saving measures in cities and countries that colloborate with them; local authority officers understandably point to the statutory constraints under which they operate.  Birmingham City Council has expressed a very general support for sustainable development in the Birmingham Development Plan.  This now needs to turn into action, moving away from the current presumption that ambitious carbon reduction targets will reduce property values and undermine economic growth in the city, a view that is a legacy of some sections of the previous administration.  This means working with the energy efficiency industry, rather than against it, to deliver solutions to issues such as solid wall insulation and solar panels that enable us to have buildings fit for the 21st century while conserving our built heritage.

The Green Commission, of which I am a member, faces an urgent task in holding senior officers to account in implementing Sir Albert Bore’s expressed wish for Birmingham to be one of the greenest cities in the world.  No longer can Birmingham issue declarations and strategies which are ignored at Director level, making it impossible to implement them.

It seems that Birmingham Energy Savers will be largely focussed on ECO funding, along with short-lived early adopter cash from DECC, for the near future, and that this will lead to significant energy efficiency improvements for many thousands of the poorest homes in Birmingham.

Carillion Energy Services, who have won the Birmingham Energy Savers contract, are also being true to their word so far in enabling local small businesses and the third sector to be part of its delivery.  In this respect, we can cautiously say that Birmingham Energy Savers is showing great promise so far.

What isn’t clear is the degree to which Green Deal – i.e. where measures that cannot be grant-funded are paid for through a pay-as-you-save approach – will take off in Birmingham or elsewhere, and it may be that the current DECC consultation on Electricity Demand Reduction contains proposals which will work better than Green Deal, for the better-off at least, and ultimately succeed it.

Meanwhile the Energy Saving Coop and community development financial institutions such as the Robert Owen Community Bank seem to be most advanced in finding fair and ethical alternatives.

Tackling fuel poverty isn’t just about energy efficiency measures – it is now more than a decade since LWM associate Pat Conaty in a report for NEF/OFGEM pointed out that fuel poverty had multiple causes and needed multiple solutions – energy saving measures; energy advice; income maximisation; bill payment facilities – a Factor Four approach.  There is a will to implement this approach but the funding streams don’t work together.  ECO will fund measures but not currently advice (although we are assured by DECC that it could); people can fund income maximisation measures through the Warm Homes, Healthy Communities fund but this is discretionary and time-limited; collective energy switching schemes will be launched in a number of locations early in the New Year, and some, but not all of these, will be tailored to the fuel poor as I advocated some months ago.

There are many wilful, determined individuals out there, in the private sector and the public sector as well as the third sector, trying to make a difference to fuel poverty.  These initiatives help a great many people but when the Chancellor announces in the Autumn Statement that we are going to become more reliant on ever more expensive and dangerous fossil fuels, then the cost of energy is going to rise more drastically, and energy efficiency will become even more important than ever.