New study shows reforms could help mutuals double in size and drive economic growth
Mutual organisations in the UK could play a far greater role in supporting the economy if longstanding financial and regulatory challenges were removed, an independent report commissioned by the Mutuals & Co-operatives Together (MCT) Group has found.
Conducted by WPI Economics, the report — Harnessing the Mutual Sector’s Potential for Growth — analyses the contributions of over 9,500 mutuals and co-operatives across the UK, which collectively account for nearly 69 million memberships.
The study highlights that despite representing just 0.2% of UK businesses, the sector contributes £35 billion in direct gross value added (GVA), supporting more than 1.5% of the national economy. Data from the Building Societies Association (BSA) shows that building societies accounted for a significant 89% of all UK mortgage market growth between January and September 2024.
Including indirect and induced effects, the total economic impact rises to £93 billion, according to the findings. The report also points to additional benefits offered by mutuals, such as higher productivity, better pay, community reinvestment, decarbonisation progress, and improved wellbeing.
The MCT Group commissioned the report to aid government collaboration with the sector and to outline areas where reform could unlock further growth. The research identifies major obstacles, including outdated legal structures, difficulty accessing capital, and limited visibility among institutional investors.
The organisation is calling for early intervention, including targeted financial support through bodies like the British Business Bank, and stronger engagement between policymakers and the Mutual and Co-operative Sector Business Council.
“This report offers key insights that support the government’s ambition and make a huge economic and social impact,” said Robin Fieth (pictured left), chief executive of the Building Societies Association. “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 10 years, contributing to a decade of renewal.”
The report proposes several measures to support expansion, including reforms to improve capital access, better alignment of public enterprise funding with mutuals, and fast-tracking the Law Commission’s review of mutual legislation. It also recommends creating specialist finance institutions and offering tailored leadership development for mutual executives.
“Mutuals and co-operatives are built to serve people, not shareholders,” said Rose Marley (pictured centre), chief executive of Co-operatives UK. “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 (pictured right), chief executive of the Association of Financial Mutuals, echoed the sentiment, adding that 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.
“The report identifies some of the key steps that government, regulators and the sector itself need to take to turn that ambition into reality,” he said.
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