Small co-operatives will benefit from legislation designed to reduce regulatory burden, in a decision announced by chancellor Philip Hammond in the spring budget.
The government will increase the turnover threshold for which co-operatives are required to conduct a full audit from £5.6m to £10.2m and the assets threshold from £2.8m to £5.1m. With this change, the Treasury aims to align these thresholds to those of companies to enable co-operatives to use more of their resources to benefit their members. The measure is expected to save co-operatives affected between £5,000 and £10,000 a year.
Co-operatives UK, the network for the UK’s thousands of co-operative businesses, has welcomed the reform, which it has been campaigning for.
Secretary general Ed Mayo said: “It is very welcome to see the chancellor helping to level the playing field for smaller co-operative businesses. There are 7,000 co-ops up and down the country giving people ownership of the things that matter – their work, their homes, their local areas. We have been arguing for the reform announced today. Its introduction will make life easier and provide a significant saving for a range of co-ops.”
Presenting the budget, Mr Hammond said that local pubs with a Rateable Value of less than £100,000 would receive a £1,000 discount on business rates bills in 2017.
The government will also provide local authorities with a £300m fund to deliver discretionary relief to help those hardest hit by business rate rises.
Labour/Co-op MP Adrian Bailey, who has been campaigning for the change, also said: “I was delighted to see this commitment in the Budget. It reflects the strength of the co-operative cause and the increasing awareness of the vital role that co-ops play in driving our economy. It is also a reflection of the strength of the close working relationship between the movement and its parliamentary representatives”.
Commenting on the spring budget, Peter Holbrook, chief executive of Social Enterprise UK, said: “What we saw today was a relatively safe budget featuring some welcome steps, but one which won’t deliver the radical change the economy needs.
“We welcome the discretionary business rates relief fund which local authorities must use to support those businesses which offer the most sustainable economic, environmental and social value. There are also welcome measures to reduce the burden on small co-operatives.
“The discount on rates for pubs will be welcomed by communities looking to set up community pubs and the action to fund broadband for local groups is vital to create the digital infrastructure required to ensure more balanced regional growth.”
Mr Holbrook added that while he had “got used to seeing no references to social enterprise” in the budget, it was a “worrying sign” that there was no mention of social investment, of even inclusive business or shared society, of mutuals and barely a mention of charities.
“The government may have completely lost sight of the value of the social economy,” he said. “The extra money for social care shows that often government eventually responds belatedly to what communities know. We hope it’s not too late before the government comes to realise the power and potential of social enterprise to both create opportunities and reduce inequalities.”