Co-operative and mutual businesses account for over £133.5bn of income annually and touch the lives of one in three people in the UK, according to a new report from the All-Party Parliamentary Group for Mutuals.
The report, written by Peter Hunt of Mutuo – which acts as administrative secretary for the group – shows significant income from each of the sub-sectors of the co-operative and mutual sector:
- co-operatives £36.1bn
- building societies £5.8bn
- friendly societies & mutual insurers £19.6bn
- housing associations £20bn
- NHS foundation trusts £52bn
Mutuals help to deliver a wide range of public policy objectives, adds the report. It says they:
- strengthen a UK-owned business sector
- spread wealth more broadly and fairly throughout the country
- provide competition and choice for consumers in a range of markets especially those for essential goods and services
- create diversity in business, with business strategies for a healthy, balanced economy that take a longer-term view and act as a counterbalance to mitigate systemic risk to the economy
- create business structures for public service providers that keep them accountable to their users and taxpayers, reducing centralisation and bureaucracy
- provide more than just an economic benefit to local communities by aiding social bonding and stakeholder empowerment
- rebuild and maintain public trust in business
And the All-Party Group makes a number of policy recommendations for increasing the contribution of co-operative and mutual business to growth, prosperity and fairness.
It calls on all parties to encourage greater recognition and policy understanding of the sector by national and devolved politicians.
And it wants to see an enabling legislative environment for the sector in the UK. Policymakers should also understand where regulation disproportionately affects the sector and address this, it adds.
The report says: “Mutuals have succeeded without outside help but too often their contribution to the UK economy and society has been overlooked. As a result, the level of appreciation of mutual business by government is surprisingly low.”
Dumutualisation has hit the sector since the 1980s, it adds, carving “a hole through financial services mutuals by slicing off many of the largest firms as they converted to listed companies.
“This inclination towards shareholder owned business as the ‘norm’ has had a damaging effect on the mutual sector and the way it is perceived.”
It warns that the global crash in 2008 “exposed the risk to leading economies of having markets dominated by similarly structured businesses that were essentially focused on the same short to medium term economic outcomes.
“The lesson is that there is a real need to address the risk that a single dominant corporate form, dependent on market fluctuations, can pose to the health of our economy and society.
“There is a new opportunity for economic policy to be re-cast in order to better manage markets, protect consumers and taxpayers as well as to promote sustainable wealth creation.”
Parliamentary Group Chair Gareth Thomas MP said: “Whether it is through providing rewarding work, strengthening community enterprise, or supplying affordable and sustainable services to consumers, this report clearly shows that a strong network of co-operative and mutual businesses plays an important part in a diverse and modern British economy.”