The contribution of co-operatives and mutual societies to the economy and public life

Fintan Codd; Steve Browning

Co-operatives are a form of business owned and run by members. In the UK, co-operatives operate under various governance models and legal forms, including:

worker co-operatives
multi-stakeholder co-operatives
community benefit societies
community interest companies

They have existed in their modern form since 1844, when cotton mill workers in Rochdale formed the Rochdale Equitable Pioneers Society to buy goods at lower prices.

Regulation and registration

The Financial Conduct Authority holds a public register of mutual societies.

The Co-operative and Community Benefit Societies Act 2014 sets out the legal framework within which they operate.

Contribution to the economy

Co-operatives UK, publishes a report each year about the scale of the sector. The 2021 report noted that:

There were over 7,200 co-ops employing 250,000 people.
They had a combined turnover of £39.7 billion.
They ranged in size from large retailers such as The Co-op, to credit unions, farmer associations and community pubs.

The report also argues that co-ops appear to have been much more resilient than other businesses to the challenges brought by Covid-19. Many co-ops pointed to the commitment and support of their members as a factor in this achievement. They also report more ambitions and optimism about the future than other small businesses.

Co-operatives UK argues that such resilience makes the co-operative model a promising one for stimulating economic recovery.

Parliamentary proceedings

In response to a Written Question from Rachel Maskell, the Economic Secretary noted on 22 September 2021 that the Government recognised the value of the mutual sector and supported its growth.

As well as including mutuals in the wider support offered to businesses during the pandemic, the Government intended to give credit unions the freedom to offer more services. The Community Ownership Fund, announced in 2021, would also support co-operative ownership.

The All-Party Parliamentary Group on Mutuals has raised concerns about the proposed demutualisation of LV=. Gareth Thomas (Harrow West), the Chair of the APPG, led a debate about the proppsed demutualisation on 15 September 2021. He argued that there “had been insufficient policy attention on mutuals in recent times, particularly on the need to be able to raise capital.” In addition to outlining the types of support mentioned above, the Economic Secretary responded that oversight of the proposed demutualisation was the responsibility of the independent regulators.

(On 10 December 2021 LV= announced that although 69% of members who had voted supported the takeover, total member participation had not met the required threshold so the sale would not go ahead.)