Too Big to fail; Too Nice to Fail?

Councillor Iain KayWe are all aware of the phrase ‘too big to fail’ from back in 2008/09 when we saw the first signs of the economic crash. Lehman Brothers was considered OK to be let go but the insurance giant AIG was just too big a failure for the system to swallow and that set the tone for ‘bankers relief’ across the developed world. Today we are all still paying for those decisions in the seemingly never ending world of economic, social and intellectual austerity on the part of our government.

The ‘too big to fail’ premise has visited us again recently in the guise of the collapse of Carillion – a major service provider to the state that became so saddled with debts from foreign adventures gone awry and general mis-management. It is too early to tell if the other players in the out sourcing pool will take any heed of what has happened to Carillion or if they even care – losing a major competitor is not necessarily a bad thing for business. Commentators have already generated much speculation about how the state should be willing and able to look at social enterprise solutions as part of the fix for the overall ‘too big’ problem.

This brings us nicely to the second theme – ‘too nice to fail’. The lurid headlines about major charities and good causes being linked to  moral and ethical failings is just as serious as excessive greed and avarice in the private sector. The loss of many celebrity endorsements and fundraising sources has been a major wake up call for the sector and charities like Oxfam are about to find out if a major transnational charitable brand can indeed be ‘too nice to fail’. Reports suggest that Oxfam has lost in excess of 7,000 donors since the scandal about abuse in Haiti broke in February 2018 with an estimated loss of revenue of around £1m. For Oxfam certainly a drama but one that could descend into an existential crisis if robust measures are not put in place.

As supporters of social enterprise and the spirit of co-operation, we have to remind ourselves that we have to not just espouse principles and seek a standing in the community, we have to walk the walk as well as talk the talk. We have to be vigorous in our self-assessment and be prepared to respond constructively to criticism. We have to place integrity and openness at the heart of everything we do. The scandal relating to the former chair of the Co-operative Bank, the failure of governance and the serious fall out it continues to have for the movement cannot be forgotten. It is an institution that is co-operative in name only. It is unlikely we will ever be part of a movement that is seen as ‘too big to fail’ and I’m not sure that we ever want to be seen as ‘too nice to fail’. We need to have economic resilience and firm judgements behind what we do.

We know our philosophy is strong. We know our cause is a right and just one. We know that the market is looking for new and innovative ways of working. We don’t want to be fail because we were too timid or lacked the vision to seize the opportunity.

Councillor Iain Kay
Co-operative Lead
Sunderland City Council

 

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