The Mutuals & Co-operatives Together (MCT) Group is calling on government to implement targeted reforms to improve mutuals’ access to capital.
The call features in an independent report commissioned by the group which maintains that addressing financial barriers will help to deliver an outsized economic and social impact in the UK.
The Harnessing the Mutual sector’s potential for growth report carried out by WPI Economics, highlights how the 9,500+ mutuals and co-operatives in the UK, which represents the interests of 68.8 million memberships, are ‘punching well above their weight’.
It also calls for:
- 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
The report found that mutuals currently generate £35bn in direct gross value added (GVA) and support more than 1.5% of the UK economy, despite comprising only 0.2% of businesses
In total the sector contributes £93bn 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 MCT Group, which commissioned the research to support government’s work with the sector, highlights that the reported barriers to doubling the sector as: limited access to finance, outdated legal frameworks, and lack of awareness among investors.
The group urges the government to take early action to address financial barriers to growth —such as directing enterprise funding through institutions such as the British Business Bank — and to work with the Mutual and Co-operative Sector Business Council to help catalyse growth.
Robin Fieth, CEO of the BSA, on behalf of the MCT Group, said: “This report offers key insights that support the government’s ambition and make a huge economic and social impact.
“By improving access to capital and removing legal and regulatory barriers, ministers can unlock mutuals’ full potential 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.
“This would double the size of the sector over the next ten years, contributing to a decade of renewal.”
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 the barriers that hold them back and deliver on the government’s ambition to double the size of the UK’s co operative and mutual economy.”
Andrew Whyte, CEO of the Association of Financial Mutuals, (pictured) said: “This report shows how with the right policy and regulatory environment, the mutual and co-operative sector can be an engine for growth across the country and contribute even more to the economy, our communities and society as a whole.
“It identifies some of the key steps that government, regulators and the sector itself need to take to turn that ambition into reality.”
