Government urged to invest in co-operatives by removing financial barriers

A new independent report, commissioned by the Mutuals and Co-operatives Together (MCT) group and launched today (April 8, 2025), shows that addressing financial barriers will help deliver an outsized economic and social impact in the UK.

Harnessing the mutual sector's potential for growth, from WPI Economics, highlights how the UK's 9,500 plus mutuals and co-operatives - which represent the interests of 68.8 million members - are ‘punching well above their weight’.

The report found that mutuals generate £35 billion in direct gross value added (GVA) and support more than 1.5% of the UK economy, despite making up just 0.2% of businesses.

Mutuals contribute £93 billion in total economic impact when indirect and induced effects are included, while simultaneously adding significant co-benefits in productivity, pay, resilience, community wealth, decarbonisation and wellbeing.

The report highlights significant barriers to doubling the size of the co-operative and mutual economy including: limited access to finance; outdated legal frameworks; and lack of awareness among investors.

The MCT Group, comprising Co-operatives UK, the Association of British Credit Unions Limited, the Association of Financial Mutuals, the Building Societies Association and the Employee Ownership Association, is urging government to take early action to address financial barriers to growth. The group says initiatives such as directing enterprise funding through institutions such as the British Business Bank and working with the Mutual and Co-operative Sector Business Council will help catalyse growth.

“This report offers key insights that support the Government’s ambition and make a huge economic and social impact,” said Robin Fieth, Chief Executive of the BSA. “By improving access to capital and removing legal and regulatory barriers, ministers can unlock the full potential of mutuals to boost economic growth and deliver real benefits for people and communities across the UK.

“With the right conditions, mutuals could grow at an annual rate of 7.2%. Achieving this would mean a 34% increase over this Parliament alone, and would be double the economic growth forecast for the UK as a whole.”

The report recommends:

• Targeted reforms to improve access to capital for mutuals
• Proportionate allocation of enterprise finance and business support to mutuals
• Swift implementation of the Law Commission’s review of mutual law
• Establishment of specialist investment institutions to support mutual growth
• Support for mutual leaders, including tailored advice and capability-building initiatives

Rose Marley, CEO of Co-operatives UK, said: “Mutuals and co-operatives are built to serve people, not shareholders. They are resilient, sustainable, and inherently inclusive making them uniquely suited to address the UK’s biggest challenges. From financial services and housing to energy and education, mutuals are innovating and investing in their communities.

“The sector is ready to do more. Now is the moment to work together to remove barriers and deliver on the government’s ambition to double the size of the UK's co-operative and mutual economy.”