Lanica plans pounds 10m wholesale cuts for Co-op

Andrew Regan would slash annual bill and strip out layers of management

Andrew Regan would cut the Co-operative Wholesale Society's central costs by pounds 10m, introduce bumper incentive schemes for employees and prune middle management if his approach to the Co-op movement proves successful.

The details are the first to emerge of the 31-year-old's strategy if his Lanica Trust vehicle wins control of parts of the CWS's non-food interests.

Though Lanica would not comment yesterday, it is understood that it has estimated the CWS's central office costs in Manchester to be around pounds 16m per year, including heavy costs for the executive committee and support staff. Some two-thirds of the costs would be stripped out.

The Co-op employs 2,500 staff in the main Manchester offices of the CWS, Co-operative Insurance Society, the Co-op Bank and the Co-operative Union.

Lower-level jobs at the CWS would not be severely affected by Mr Regan's plans. Incentive schemes would be introduced to motivate the rank and file. These would be similar to schemes introduced at his previous vehicle Hobson, which bought the Co-op's food manufacturing businesses.

The details come ahead of the CWS annual results, due to be published on Monday. As well as confirming a poor year for the business it is expected that they will reveal details of the retirement package of the previous chief executive, David Skinner. There is speculation that it could involve a payment of two years' salary plus continued use of his company Jaguar.

Though Mr Regan has missed the deadline for resolutions for the CWS annual meeting next month, it is possible that a supportive Co-operative member could propose a special meeting to discuss the issue. It is thought that Lanica Trust would prefer its proposals to be discussed in a single-issue meeting rather than have its motion compete with a host of others at an agm. Lanica Trust also felt that using the annual meeting would have appeared hostile.

Though there have been suggestions that Mr Regan has the support of some of the regional societies, one chief executive of a small Co-op said yesterday: "We would strongly support the line taken by Graham Melmoth [the CWS chief executive] and oppose the approach that has been made. As mutuals without a fluctuating share price to distract us and through generations of accounting policies the movement has built up considerable internal reserves. But that wealth is not there to be plundered. We are the custodians of it. We are charged with cultivating it and handing it on to the next generation."

However, the chief executive added that he accepted the movement's fragmentation was a problem and that he would strongly support a merger of the CWS and Co-operative Retailer Services, the other main Co-op division.

Mr Melmoth made similar comments to a group of Co-op managers in Solihull last Friday. He is quoted in the latest issue of Co-operative News as saying it is "time to heal our split personality". Though he repeated his tough stance on the Lanica approach he said the movement should make its assets work harder. He hinted at a moving together of the CWS and CRS though he did not use the term "merger".

He said that if the two camps were to move closer they would form a stronger commercial proposition. Mr Melmoth said: "It is possible that the interesting diversion of Lanica over the last few weeks ... will help to concentrate minds."

Start your day with The Independent, sign up for daily news emails
ebooks
ebooksAn introduction to the ground rules of British democracy
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
SPONSORED FEATURES
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Sales Executive / Foreign Exchange Dealer - OTE £40,000+

£16000 - £40000 per annum: Recruitment Genius: A Foreign Exchange Dealer is re...

SThree: Experienced Recruitment Consultant

£20000 - £40000 per annum + OTE + Incentives + Benefits: SThree: Established f...

SThree: Trainee Recruitment Consultant

£20000 - £25000 per annum + OTE 40/45k + INCENTIVES + BENEFITS: SThree: The su...

Recruitment Genius: Collections Agent

£14000 - £16000 per annum: Recruitment Genius: This company was established in...

Day In a Page

Refugee crisis: David Cameron lowered the flag for the dead king of Saudi Arabia - will he do the same honour for little Aylan Kurdi?

Cameron lowered the flag for the dead king of Saudi Arabia...

But will he do the same honour for little Aylan Kurdi, asks Robert Fisk
Our leaders lack courage in this refugee crisis. We are shamed by our European neighbours

Our leaders lack courage in this refugee crisis. We are shamed by our European neighbours

Humanity must be at the heart of politics, says Jeremy Corbyn
Joe Biden's 'tease tour': Could the US Vice-President be testing the water for a presidential run?

Joe Biden's 'tease tour'

Could the US Vice-President be testing the water for a presidential run?
Britain's 24-hour culture: With the 'leisured society' a distant dream we're working longer and less regular hours than ever

Britain's 24-hour culture

With the 'leisured society' a distant dream we're working longer and less regular hours than ever
Diplomacy board game: Treachery is the way to win - which makes it just like the real thing

The addictive nature of Diplomacy

Bullying, betrayal, aggression – it may be just a board game, but the family that plays Diplomacy may never look at each other in the same way again
Lady Chatterley's Lover: Racy underwear for fans of DH Lawrence's equally racy tome

Fashion: Ooh, Lady Chatterley!

Take inspiration from DH Lawrence's racy tome with equally racy underwear
8 best children's clocks

Tick-tock: 8 best children's clocks

Whether you’re teaching them to tell the time or putting the finishing touches to a nursery, there’s a ticker for that
Charlie Austin: Queens Park Rangers striker says ‘If the move is not right, I’m not going’

Charlie Austin: ‘If the move is not right, I’m not going’

After hitting 18 goals in the Premier League last season, the QPR striker was the great non-deal of transfer deadline day. But he says he'd preferred another shot at promotion
Isis profits from destruction of antiquities by selling relics to dealers - and then blowing up the buildings they come from to conceal the evidence of looting

How Isis profits from destruction of antiquities

Robert Fisk on the terrorist group's manipulation of the market to increase the price of artefacts
Labour leadership: Andy Burnham urges Jeremy Corbyn voters to think again in last-minute plea

'If we lose touch we’ll end up with two decades of the Tories'

In an exclusive interview, Andy Burnham urges Jeremy Corbyn voters to think again in last-minute plea
Tunisia fears its Arab Spring could be reversed as the new regime becomes as intolerant of dissent as its predecessor

The Arab Spring reversed

Tunisian protesters fear that a new law will whitewash corrupt businessmen and officials, but they are finding that the new regime is becoming as intolerant of dissent as its predecessor
King Arthur: Legendary figure was real and lived most of his life in Strathclyde, academic claims

Academic claims King Arthur was real - and reveals where he lived

Dr Andrew Breeze says the legendary figure did exist – but was a general, not a king
Who is Oliver Bonas and how has he captured middle-class hearts?

Who is Oliver Bonas?

It's the first high-street store to pay its staff the living wage, and it saw out the recession in style
Earth has 'lost more than half its trees' since humans first started cutting them down

Axe-wielding Man fells half the world’s trees – leaving us just 422 each

However, the number of trees may be eight times higher than previously thought
60 years of Scalextric: Model cars are now stuffed with as much tech as real ones

60 years of Scalextric

Model cars are now stuffed with as much tech as real ones