Mutuals Group urges action to realise huge growth and social dividend from Labour’s ‘doubling’ ambition
New Independent Report Shows Removing Financial Barriers Will Unlock Growth for Mutuals and Deliver on Labour’s Manifesto
UK, April 08 2025 – A new independent report commissioned by the Mutuals & Co-operatives Together (MCT) Group shows that addressing financial barriers will help 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’.
The report found that Mutuals currently generate £35 billion in direct Gross Value Added (GVA) and support over 1.5% of the UK economy, despite making up just 0.2% of businesses
Together they 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 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work with the sector, highlights that the reported barriers to doubling the sector as: limited access to finance, outdated legal frameworks, and lack of awareness among investors.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.
“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, on behalf of the MCT Group.
“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.”
The report recommends:
- Targeted reforms to improve mutuals’ access to capital.
- 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.[i]
- 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 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, Chief Executive of the Association of Financial Mutuals 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.”
ENDS
For more information contact:
Andrew Whyte, Chief Executive
07703 107613
[email protected]
Notes to Editors
- The Association of Financial Mutuals is the trade body that represents mutual and not-for-profit insurers, friendly societies and other financial mutuals across the UK. A financial mutual is an organisation that supplies financial services products, and which is owned by its customers, or members. That means there are no shareholders to pay dividends to or account to, and a mutual can concentrate entirely on delivering products and services that best meet the needs of its customers. financialmutuals.org
- Harnessing the Mutual Sector’s potential Growth report
The Mutuals & Co-operatives Together partnership commissioned WPI to carry out a research project to measure the growth of the cooperative and mutual sector in the UK. The project aims are to provide a robust view on progress towards the UK Government’s goal of doubling the size of the sector.
The report is supported by and uses data from Association of British Credit Unions Limited, the Association of Financial Mutuals, the Building Societies Association, Co-operatives UK, and the Employee Ownership Association to calculate the gross value added (GVA) in the mutual sector.
Link to report on the AFM website
- About the Mutuals and Cooperatives Together Group The Mutuals & Co-operatives Together partnership commissioned WPI to carry out a research project to measure the growth of the cooperative and mutual sector in the UK. The project aims are to provide a robust view on progress towards the UK Government’s goal of doubling the size of the sector.
Mutuals are designed to promote a fairer, more equitable economy: growing mutuals would help build a financial sector that better caters to under-served groups, such as first-time buyers.
Mutuals also promote local growth and serve their communities; growing the mutual sector would help improve productivity, create a happier, better-paid workforce, and increase customer satisfaction.
The ownership model also means mutuals are more resilient to shocks, such as financial crises and pandemics. They are also substantially domestically focused, with their surpluses re-invested into the UK economy. As such, mutual growth would improve the resilience of the UK economy.
The UK has the second highest number of individual co-operative memberships in Europe, behind Italy and closely followed by France. Despite this, the overall size of the mutual economy in Britain is significantly smaller than it was in the 19th and 20th centuries. To facilitate the sustained growth of mutuals, this report sets out why financial barriers must be lifted and laws put in place to improve understanding of – and confidence in -the sector.
Unlike their counterparts who benefit from the USA’s CDFI fund or Italy’s CFI, mutuals in the UK lack access to large institutions that help them get funding and knowledge. Many types of mutuals lack ways to raise capital from external investors – a gap which has been successfully addressed in Australia with the Mutual Capital Instruments. For the most part, there is a lack of legal incentives to mutualise in the UK. Taken together, those barriers mean that the benefits of the mutual model cannot be fully realised. However, by addressing some of the challenges, the mutual sector could make up a much greater part of the UK economy.