We Need a Catalyst for Co-operative Growth: Why the Next Welsh Government Should Invest in a Co-operative Development Hub

As Wales looks ahead to the upcoming Senedd elections, we have an opportunity to take stock of the journey of economic development since devolution and set out a vision for its future. Our country is facing significant challenges – productivity is too low, poverty and precarity are too high, and the need to secure a just transition is evident. Investing in economic development is essential – and co-operative models are vital to ensuring sustainable and inclusive prosperity.  

Cwmpas has been at the heart of the Welsh co-operative sector for decades. Social Business Wales, which we deliver on behalf of Welsh Government as lead partner with the Social Enterprise Stakeholder Group, has long provided a high-quality advisory service to people and organisations looking to launch or grow a social business. It is a vital foundation of our support ecosystem, providing parity of access to expert support across Wales and we have seen successful co–operatives launched as a result. But if we are to harness the full economic and social potential of the co-operative sector, as we believe we should, it’s vital that a targeted intervention is in place to support the growth and scale required.   

We believe it is time to invest in a dedicated Co-operative Development Hub for Wales – a proactive, place-based, and market-shaping initiative that can create the conditions for larger-scale co-operatives to emerge, grow, and thrive. 

The case for investment 

Social Business Wales continues to provide expert support to hundreds of individuals and organisations each year – a service our clients tell us is essential to their success. In fact, we are currently seeing demand for this service at its highest point yet, demonstrating the need for social models of business that embed innovation and a commitment to social value in Welsh communities.  

However, with the service running at capacity, this means advisors are more often working with early-stage and high-impact but small-scale projects. This reflects an essential strength of the sector – its deep roots in local communities and grassroots activism — but also a challenge: without the right infrastructure and resource to develop larger-scale opportunities, we risk missing out on the kind of economic transformation Wales urgently needs. 

To achieve the co-operative growth we believe is necessary, we can no longer wait for individuals and communities to bring forward transformative ideas. We need a greater number of large-scale co-operatives — capable of creating good jobs, building resilient supply chains, and delivering foundational services at scale — and we need to invest in the proactive development of these opportunities. This means putting in place capacity not just to respond to demand, but to shape and grow it.  

Moving from support to proactive development 

This proposal is not about replacing existing support; it is about complementing and enhancing it. The Co-operative Development Hub would sit alongside Social Business Wales, providing a more proactive and strategic function. Its core role would be to identify opportunities for co-operative development in supply chains, sectors, and communities across Wales. 

This means actively engaging with public sector procurement, anchor institutions like public bodies and universities, and local communities to explore where co-op models could meet unmet needs, retain wealth locally, and drive inclusive growth. It means bringing together potential founders, partners, and investors to catalyse new ventures. It means embedding co-operative development into the delivery of regional economic strategies and local well-being plans.  

The Co-operative Development Hub would have the capacity and expertise to make this happen. It could do this in a variety of ways, such as:  

• a team of Co-operative Development Officers working with communities across Wales to support the ideation and inception of sector specific co-ops that have the potential to create good jobs and build community wealth, from housing retrofit to social care and food production to supporting freelancers in arts and culture. 

• Providing policy guidance to the statutory sector to improve regulation and reduce the barriers preventing the development of new co-operatives. 

• Working with the public sector to set up new worker co-operatives that can start life within the public sector but can be spun out and run as independent co-operatives. 

• Training up entrepreneur champions within further and higher education to become co-operative champions. 

• Working at national level to identify key sectors/ geographies for targeted cooperative development, aligned to economic and tackling poverty strategies  

Learning from success: doubling employee ownership 

We know this approach works because we have done it before. With the support of targeted investment in market development delivered by Cwmpas, Wales has successfully doubled the number of employee-owned businesses since 2021 – achieved two years ahead of schedule. This did not happen by accident. It happened because we invested in identifying opportunities, engaged with business owners, and built the networks and infrastructure needed to make a culture change possible. 

This success demonstrates the value of proactive, expert, and dedicated market development. Employee ownership is a powerful model for building long-term business resilience, protecting jobs, and anchoring wealth in communities. But without the capacity to go out and develop that market – to promote the model and its benefits, build understanding among businesses and stakeholders, and deliver tailored support – those outcomes would not have been realised. The same is true for co-operatives more broadly. 

Place-based innovation: the Perthyn pilot 

The Perthyn pilot, funded by the Welsh Government and delivered by Cwmpas, has shown the power of community-based co-operative development. Perthyn embeds early-stage support for co-operative development within communities, working to inspire Welsh language community groups and help them get started, build networks and bring people in the community together. They develop ideas, increase capacity and support, and increase confidence to develop community-led projects to contribute to building strong local economies and increasing the Welsh language at the same time. Combining this with early-stage seed funding of £661,122 to 63 groups since 2023 has led to a surge in successful community-owned projects delivering vital services within communities while working towards our shared goal of secure and thriving Welsh language communities.   

Perthyn provides a blueprint for how a Co-operative Development Hub might operate: working at a grassroots level, connecting to wider regional and national strategies, and bringing specialist knowledge to bear where it’s needed most.  

Supporting delivery of the Well-being of Future Generations Act 

The recommendation for a Co-operative Development Hub was recently included in the latest Future Generations Report by the Future Generations Commissioner for Wales, alongside an ambition to double the size of the social enterprise sector. This reflects a growing recognition that co-operatives and social businesses are key delivery vehicles for a well-being economy — one that prioritises social justice, community wealth building, and environmental sustainability. 

Investing in a Co-operative Development Hub would directly support the implementation of the Well-being of Future Generations Act. It would give practical effect to the principles of prevention, long-term thinking, collaboration, and involvement and create new anchor institutions embodying these values in the private sector. It would help unlock new solutions to complex challenges in areas such as housing, transport, food systems, and health and care, as well as create new innovative, entrepreneurial businesses that can create sustainable growth and prosperity for Wales, with the profits distributed fairly and sustainably.  

By building co-operative markets, we can ensure that the benefits of economic activity — from jobs and income to ownership and voice — are more fairly and widely shared. That is the kind of systemic change the Act was designed to encourage. 

A smart investment in resilience and growth 

We know that Wales faces significant challenges, and in the current climate every Welsh Government investment will need to deliver maximum value. In the context of stubborn levels of poverty, a Co-operative Development Hub offers a smart investment: one that delivers economic, social, and environmental returns. Building a fair, inclusive and sustainable economy is the ultimate preventative investment – this will take a multi-faceted approach that brings together all business and service delivery models, but growing the co-operative economy should be a headline aim and key part of the vision, one that requires specific investment.  

Co-operatives are more resilient than other businesses, particularly during economic downturns. They are more likely to reinvest surpluses in their communities. They provide quality, inclusive employment, often in places where other forms of enterprise struggle. They are also well placed to deliver on our shared priorities for Wales, including fair work, decarbonisation, and inclusive regional development. 

By investing in the proactive development of this market, we can help build the kind of economy Wales needs — one that is fairer, greener, and more sustainable. 

We will be including this recommendation and in our upcoming Cwmpas Manifesto for Sustainable Prosperity and will be publishing a full white paper in due course.  

In Cwmpas we believe in a vision for an economy that works differently, putting people and planet at the heart. Wales has long been a nation of pioneers — from the co-operative movements of the 19th century to today’s social entrepreneurs. But if we want to turn this tradition into a systemic part of our economy, we need to be bold and work across sectors to achieve our common goals. That means shifting from reactive to proactive support. It means proactively spotting opportunities and bringing people together to make it happen. It means growing co-operative markets — not waiting for them to emerge. 

The Co-operative Development Hub is a vital next step in that journey. With the right investment, it can unlock the full potential of co-operative and social business models to deliver a stronger, fairer, more resilient Wales.