Following concerted lobbying efforts, the Co-operative and Community Benefit Societies Act (2014) created a legal framework for co-operatives that is simpler, modernised, enabling and on an equal footing with company law in crucial ways. All this makes it easier for people to set up and run co-operatives, contributing to growth in the co-operative economy.
The Act augments reforms that raised the withdrawable shareholding limit, put co-operative societies on an equal footing with companies when it comes to insolvency and investigation of wrongdoing, and, brought the Financial Conduct Authority's (FCA's) registration process into the twenty-first century.
Developing the legislation
The 2010 ‘Coalition Agreement’ included commitments to “support the creation and expansion of co-operatives”. Seizing on this we published our 'Co-operative Call to Action' later in the same year. In this document we identified specific legislative changes we knew the co-operative sector required in order to grow. Following on from our Call to Action we began preliminary discussions with HM Treasury, our members, and advisors. The Prime Minister’s public commitment in January 2012 to legislate for co-operatives focused minds and promised government time.
Budget 2013 included an announcement of a consultation on reforms including raising the investment limit, insolvency and regulatory investigations, which opened in July 2013. We led the co-operative movement in responding to the consultation, encouraging our members to respond in support of the measures. Government’s decision in December 2013 to legislate was validation of our approach in combining close working with officials, quantitative data, and mobilisation of our membership.