Cliff Mills and Simon Grove-White on why cooperation is the way forward in public services.
Andy Burnham’s speech at the People’s History Museum has thrown down the gauntlet to rethink the operating systems of government. If he enters Downing Street, he would do so as the UK’s first Prime Minister elected under the Labour–Co‑operative banner—bringing the political wing of the co‑operative movement formally to the centre of government for the first time. As he put it:
“If people in 1844 could form the co‑operative movement in Rochdale to lower the price of food, then why can’t we now, with similar courage, make life better?”
This an invitation to challenge the dominance today of competition, and instead look to cooperation as the basis for commercial relationships. This is the alternative approach heralded by our last article: We Need to Talk About Procurement
As we showed, organising public services through contracts and procurement might work well for straightforward purchases but it repeatedly fails when applied to complex, long-term challenges. It establishes transactional relationships between actors, locks relationships into fixed terms, and incentivises each party to maximise their own position. The result has been a set of public systems with misaligned incentives, lost learning, and, critically, the steady extraction of value into private hands.
This follow-up article argues that cooperation — of a kind exemplified in the UK by Cooperative Network Infrastructure (CNI) — offers a superior operating system for many public challenges. By organising public, private and community actors within a mutually owned endeavour rather than a set of contractual relationships, CNI enables more effective coordination, more intelligent adaptation, and the retention and recirculation of value and investment; preventing the extraction of public value by design. We will return to this in more detail below.
When members trade within their cooperative, that trade can take place under the rules of the cooperative rather than under contract law which is the usual framework for commercial transactions. As such, they are co-operative acts, not market transactions: activities carried out within a jointly governed framework to address a particular set of mutual needs and answerable to a set of values and principles.
Cooperation (see box – what do we mean by cooperation) provides a readymade, legally compliant alternative, though it remains poorly understood and rarely used in the form we describe – as the mechanism for governing exchanges between different economic actors. It does not need new laws, or increased expenditure; and could increase efficiency and value for money by reducing transaction costs and reducing the scope for profit extraction. The Treasury should take note…
“When members trade within their cooperative, that trade can take place under the rules of the cooperative rather than under contract law which is the usual framework for commercial transactions.”
Participants (“members”) bought wholesale goods collectively and supplied themselves individually without a profit margin. They used provisional pricing at the point of sale; returning any unintended surplus as a dividend to members once true costs were known.
Control was democratic (one member, one vote), and the recognised purpose was not to maximise private gain but to ensure fair access and long-term sustainability. In effect, it aligned users, owners and governors into a single group—removing the structural incentive for value extraction and embedding fairness directly into how the system worked.
The structure was important, but incidental: a means to an end. The objective was wholesome food without private profit, and at a fair price. Although this kind of cooperation was once widespread, it has been largely lost in the UK, and cooperatives are now generally understood in much narrower terms – as simply ‘nicer’ or ‘more democratic or deliberative’ business structures.
Yet in other jurisdictions, the distinction still matters: in much of the Spanish speaking world, transactions between members of a cooperative are recognised as ‘cooperative acts’ and subject not to usual market forces with their inevitable power imbalances, but to the collectively agreed rules. Those rules are effectively a contract of relationships between the members, separate from the market. Using these rules and a governance framework designed for fairness rather than private gain, members are then free to transact in any way and in any field they all agree to – see Cliff Mills, The Nature of a Cooperative
To anyone interested in addressing economic problems or delivering public goods, this insight offers an open invitation to redefine how economic and social relationships can function, without needing to change the law, or the external regulatory environment.
The case is simple. For coordinating resources within complex systems, cooperation is a better organising logic. It is:
- More effective at aligning incentives
- More agile and intelligent in adapting to change
- Better at retaining and circulating value locally
- Structurally resistant to extraction and economic coercion
- More efficient and better value for money (see box: Common Concerns)
Competitive procurement is assumed to deliver value through competition, yet in complex systems it creates hidden costs—risk pricing, fragmentation and renegotiation—and can enable public value to be extracted privately. Cooperation in the sense described retains financial discipline through open-book accounting, benchmarking and shared oversight, while reducing leakage by removing the ability of any one actor to maximise profit at others’ expense.
Similar issues arise with subsidy and competition law. What appears as subsidy in traditional models often reflects opaque transfers of value through land deals or contract renegotiation. A cooperative approach makes contributions explicit and governs how value is allocated, improving transparency and accountability. And rather than coordinating competing suppliers, participants are members of a shared endeavour pursuing a common purpose—meaning the approach rests on collaboration, not collusion, and is typically more robust in practice.
What is CNI?
State-subsidised digital infrastructure programmes like BDUK—described by the Public Accounts Committee as granting BT Openreach a ‘de facto rural monopoly’—have consistently drawn criticism for enabling private suppliers to leverage their market position to earn higher-than-expected returns.
Cooperative Network Infrastructure (CNI) bucks this trend, enabling public, private and community actors to deliver and manage digital infrastructure through a shared, cooperative initiative—referred to here as a ‘thin-layer’ cooperative—rather than a conventional market arrangement.
The pursuit of private advantage by individual members is bounded by the collectively agreed principles of fairness.
The pursuit of private advantage by individual members is bounded by the collectively agreed principles of fairness. Unlike a set of relationships managed through competitively tendered contracts like the BDUK programme, this has erased the economic power advantage of the larger parties, increasing the scope for SMEs and community-led providers to participate and innovate. (see box – how does CNI work).
What makes CNI fundamentally different from the “conventional” approach is that overall control is removed from private or public ownership and there is no single entity able to extract monopoly profits. Rather than relying on contracts to manage behaviour after the fact, CNI embeds fairness, open access and proportionate returns into the structure itself—so the system can adapt over time, align incentives across participants, and retain value within the network instead of leaking it out through extractive pricing or monopoly control of the asset.
Despite the number of parties involved, it wasn’t complicated to set up. It started from an identified mutual need and a willingness to build relationships and establish rules that prioritised shared needs over individual interests.
Its membership is voluntary, open and transparent. Any actor willing to subscribe to its internal regulations can become a member at any time.
Rather than establishing a patchwork of proprietorially owned digital fibre, as a neutral host CNI stitches the assets of different parties together, making them available to others in the system as a single coherent whole. The result is a network infrastructure that’s more than the sum of its parts.
What would this look like if applied to urban development?
Imagine a mid-sized post-industrial town where the council owns significant brownfield land, the NHS trust owns underused buildings near the town centre, the college owns a campus on the edge of it, and a housing association owns estates threading through it. Under the current approach, each of these anchor institutions manages its estate independently, procures development separately, and when land is sold for development, the uplift in value flows to the developer and ultimately to investors. The council commissions a regeneration strategy; a large consultancy wins the contract; the report recommends a masterplan; a national housebuilder wins the development agreement; houses are built to minimum standards at maximum margin; profits leave town. The public sector has spent money, lost land, and the community has gained some housing but little else.
Now apply the cooperative thin-layer logic. The anchor institutions pool their land and property assets into a cooperative development vehicle—not transferring ownership, but granting access and aligning development rights. This immediately changes the economics: the combined asset base is large enough to attract serious investment without needing to sell control, the development risk is shared across institutions rather than borne by any single one, and the cooperative governance ensures that decisions are made against a community wealth mandate rather than a return-on-capital mandate.
Because the cooperative holds the shared infrastructure layer—land, buildings, utilities connections, digital infrastructure, potentially a local energy network—it can set the terms on which developers, contractors, and service providers operate above it. Local SMEs can access development opportunities on equal terms with nationals. A community land trust sits within the cooperative structure, ensuring that residential land value is permanently decoupled from the speculative market. Affordable homes and workspace are a structural feature of the development rather than a planning obligation to be negotiated away. The college’s campus becomes an anchor for skills provision directly connected to the development process, and the employment needs of the new businesses moving in, because the cooperative governance connects those institutions in a way that the market never would.
The wealth embedded in the place stays in the place, and each cycle of investment compounds rather than dissipates it.
The surplus generated—from commercial lettings, from energy, from the appreciated value of the shared asset base—recirculates through the cooperative rather than leaving town. Over a decade, the town has not just built some houses; it has built a permanently shared infrastructure of land, connectivity, energy, and institutional capacity that belongs to the community and cannot be extracted. The wealth embedded in the place stays in the place, and each cycle of investment compounds rather than dissipates it.
The contrast with the conventional model is not just financial—it is about who holds power over the future of the place. In the conventional model, that power sits with developers, investors, and national contractors who have no stake in the town’s long-term flourishing. In the cooperative approach, it sits with the institutions and ultimately the people who are there for the long run.
Why this should appeal to public authorities
Officers and members working within local authorities should find this approach compelling because many will have spent years trying to coordinate complex, place-based challenges through contracts. Systems of urban development, care, and transport are interconnected, yet using the adversarial contractual approach forces councils to fragment them, manage multiple suppliers, and then attempt to reassemble coherence through oversight and negotiation. The result is high friction, weak alignment and constant renegotiation.
A cooperative approach offers a much simpler alternative. Instead of coordinating across boundaries, councils can help convene a value-led initiative where key actors work together over time, align resources around common goals, and adapt as conditions change. This shifts the council’s role from contract manager to system steward—retaining influence, reducing friction, and ensuring that value is created and kept within the place rather than leaking out.
Policy prescriptions
It’s clear from both emerging UK practice and international evidence that cooperation offers a more effective way to coordinate resources and effort within a complex system. The priority now is to move from concept to practice through targeted “test and learn” pilots.
Rather than attempting to implement this from the centre, the government should lend its support to a small number of structured experiments in areas where the limitations of contracts are already well understood, and where collaborative, adaptive approaches are most likely to outperform them. These pilots should be designed to test whether shared governance can deliver better coordination, stronger alignment and greater retention of value in practice.
There are several natural starting points.
- Neighbourhood development, particularly through initiatives such as Pride in Place, offers a clear opportunity to pilot cooperative stewardship approaches for investment, bringing the use and improvement of public and private assets into the system, and providing a low friction way for local businesses and community organisations to contribute to the overarching objectives.
- Neighbourhood health and care is another government priority, where fragmented commissioning already undermines outcomes and where a cooperative approach could align providers around prevention and continuity of care.
- SEND (Special Educational Needs and Disabilities) transport, a system characterised by rising costs, rigid contracts and inefficiencies—where a cooperative approach could better coordinate routes, providers, families and local authorities around shared objectives.
- Water and waste services, where privatisation under a statutory regulator has proved unsatisfactory, and users sharing a vision for a better future are more likely to collaborate than consumers transacting with an adversarial private provider.
- Green infrastructure and landscape regeneration, where the dominant approach of private finance and nature markets fragments management of ecosystems as it attempts to commodify nature, a cooperative approach can create long-term management of ecosystems, as connected complex uncertain systems, to deliver drought resilience, natural flood risk management, biodiversity recovery and more.
Central government’s role is not to prescribe a single approach or model, but to enable and legitimise experimentation: clarifying how existing legal frameworks apply, backing early adopters, and ensuring robust evaluation. If these pilots demonstrate improved outcomes, adaptability and value retention, they can provide a practical foundation for wider adoption. The aim is not to replace contracts entirely, but to deploy cooperative arrangements where they are the better tool for the job — and to build an evidence base that supports that shift.
The tools are ready. The case is made.
Contracts remain essential for straightforward purchases. But for many of the challenges facing public services today, they impose the wrong logic — fragmenting relationships, limiting adaptability, and enabling value to be extracted rather than retained.
By embedding collaborative governance, transparency and fair allocation within the institution itself, cooperation addresses the persistent problem of value extraction that contracts cannot solve. Rather than relying on redistribution after the fact, it enables value to be created and retained collectively from the outset—keeping benefits within places rather than allowing them to leak out through transactional arrangements.
Burnham’s challenge is to change from an adversarial culture to a collaborative one, from an atmosphere of conflict and competing private interests to one of collective endeavour for the common good. This requires legal mechanisms based on cooperation, not competition.
The tools are ready. The case is made. And if this really is, as Burnham suggests, a moment to build a more collaborative, partnership-based model of governance, then cooperation is not an optional extra—it is the mechanism by which that ambition can be realised.
