UK co-operatives deliver ‘good growth’ as new report highlights potential to scale

Co-operatives UK’s Co-operative and Mutual Economy 2026, published today (24 September), reveals that the democratic economy – encompassing co-operatives, mutuals, employee-owned businesses and building societies – generates more than £240.7 billion in annual income, supports over 1.7 million jobs and accounts for more than 70 million memberships.

The findings come as government pursues its ambition for “good growth in every postcode” – and the latest evidence shows that co-operatives, by design, generate good growth in communities across the UK 

“We are the good growth in every postcode – the evidence is there. The opportunity now is to create the wider conditions for co-operatives to flourish and scale,” said Rose Marley, Chief Executive of Co-operatives UK.

The report shows significant economic and social benefits from democratic ownership, but finds that the wider conditions for growth at scale are not yet in place. There are now 8,005 co-operatives in the UK, just 33 more than a year earlier. Co-operatives account for only 0.14% of UK businesses and their numbers are growing more slowly than the UK business population overall. 

Some of the clearest examples of growth are happening where people are taking ownership in response to challenges facing their communities. Community-owned pubs are the fastest-growing part of the UK’s co-operative economy: 

• There are now 377 co-operatives in the food service, accommodation and pubs sector, with growth driven by community-owned pubs  
• The sector has grown by 10.23% in a year and 48.43% over five years  
• Membership across the sector has increased by 74.3% over five years to more than 50,000 

Paul Gerrard, Co-op Group’s Director of Campaigns, Public Affairs and Policy, said: "We welcome the government's continued commitment to its world-leading ambition to double the size of the UK's co-operative and mutual economy.   

“This latest report shows the scale of the opportunity ahead of us. Co-operatives are already delivering fairer, more resilient and community-focused growth across the country, but if we are to realise the government's ambition, we need concerted action from both policymakers and the co-operative movement. 

The findings come as government takes forward major programmes designed to put greater economic power into local communities, including the £1 billion Local Power Plan and £5 billion Pride in Place Programme. Co-operatives UK has welcomed this action, alongside new Community Right to Buy powers and credit union reform. Together, these measures represent a major effort to expand democratic ownership.

“We shouldn’t underestimate what’s already been committed,” Rose said. “The Local Power Plan and Pride in Place create important opportunities for communities to own assets, shape investment and build local wealth. We want to work with government to make sure that potential is realised. 

“But doubling the co-operative and mutual economy will also require action across the wider business environment – improving co-operatives’ access to capital, expanding tailored business support and modernising outdated legislation. Together, that would help turn individual programmes into a wider environment in which co-operatives can thrive.” 

Employee ownership shows how quickly democratic business models can grow when policy creates an established route into them. The number of employee-owned businesses increased by 22.2% in the last year, from 2,225 to 2,720. Their combined income rose by 10.9% to £77.4 billion, while employment increased by the same percentage to almost 459,000. Over five years, the number of employee-owned businesses has risen by 366% – from 584 to 2,720. 

James added: "We see that there is a path forward to optimise the EOT’s tax regime, to ensure that a supportive environment can be sustained for EO growth while keeping the Exchequer costs of the CGT relief minimal."

The report also finds that new co-operatives are more than twice as likely to survive their first five years as UK businesses generally – 82.79% compared with 38.44%. Co-operatives are more than four times as likely to be accredited Living Wage employers, while women lead 24% of the UK's 100 largest co-operatives, compared with 9.6% of FTSE 100 companies. 

Some of the UK’s strongest concentrations of co-operatives are found outside its traditional economic centres. In the North East, for example, co-operatives are more than twice as prevalent relative to the local business population as they are nationally. 

Rose said: "The potential is clear. If good growth means resilient businesses that care for their communities, educate people and provide good jobs, then the co-operative movement has ready-made solutions in every sector. The opportunity now is for government and the co-operative movement to work together to build a bigger, stronger co-operative economy."