Industrial & Provident Societies

What is an Industrial & Provident Society?

A not-for-profit Industrial and Provident Society, also called a Co-operative or a Mutual Society, is regulated by the FSA (Financial Services Authority).

Unity Wind Limited is a company, but annual reports and accounts go to the FSA, not Companies House.

It is run according to specific ‘model rules’ agreed by the first directors and the FSA. The model rules are open to inspection at the registered office, and all members can have a copy.

It is not-for-profit in the sense that directors are volunteers. They do not get any money for their work or position.

This does not mean the project will not earn considerable money for shareholders and local funds. Nor does it mean that the business is not run professionally.

Features of an Industrial & Provident Society which make it suitable for setting up a community scheme.

1) Initial costs are kept lower through the work of the directors. In the case of Unity Wind Limited, this means over three years of administrative work and expenses, including the expert knowledge of Barry Groom, who works in the industry.

2) The costs of surveys can be financed from grants. An I & P S is eligible to receive grants (and gifts).

3) Once in production profits will boost the local economy, through local shareholding, where specific rules have ensured a low minimum investment, and through specific funds for local projects.

In common with any commercial scheme, there will also be help for the local economy through rents paid to the landowners hosting turbines and the local jobs gained.

4) Democratic control is achieved because every member has one vote, whether they invest £1 or the maximum of £20,000. This means that anyone who agrees with the aim of the Society can join, and the company cannot be taken over by majority shareholders. It is safe with the community.

5) Joining is cheap, simple and can occur at any time. It does not need a complicated share option. Investment can be increased gradually, making it easier for people on lower incomes.

6) Early consultation means that members can influence the size and scale of the project.

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