A major government review of UK co-op law has been announced at Co-op Congress in Manchester by finance minister Andrew Griffith.
The review, looking at the Co-operative and Community Benefit Societies Act 2014 and Friendly Societies Act 1992, will be conducted by the Law Commission, beginning this autumn.
“It’s the most comprehensive modernisation of the co-operative sector for a generation,” he said, “and it will develop a more modern and supportive business environment which sets co-operatives and friendly societies up for, I hope, another 152 years of growth.”
The democratic economy has the backing of the current government according to Griffith. He said: “This government is on the side of a co-op and wider mutual sector. The future of mutuality looks bright and prosperous and together we can learn, inspire and think big for your communities and the country.”
Co-operatives UK CEO, Rose Marley, welcomed the review. “We’re grateful to HM Treasury for the role it has played in securing this review,” she said. “As we have said many times in recent years, a wholesale review, with a view to introducing primary legislation, is long overdue.
“The UK’s co-operative legal framework is currently limiting and in places dysfunctional. This costs the sector millions of pounds a year in unnecessary time, expenditure, inefficiency and missed opportunities.”
The last general review and reform of co-operative and community benefit society law was undertaken by the Gladstone administration in 1893. Since World War II, improvements to society law have been rare and piecemeal.
In 2014, the Coalition government passed the Co-operative and Community Benefit Societies Act. While welcomed by the Co-operative Movement, the Act was consolidation legislation and therefore did not make material changes to the law. Strategic objectives for improving co-operative law may now focus on:
- Enabling co-operatives to form, grow, innovate and reach their potential with a particular focus on reviewing equity raising and the utility of the society legal forms for modern entrepreneurship
- Removing unnecessary or disproportionate costs, burdens or complexities for co-operatives such as audit requirements for small societies
Marley added: “The power of co-operation can be seen right here. We’ve campaigned for fundamental change in legislation for some time. When we work together positive things happen. We’ve campaigned long and hard alongside our retail co-operative society members, alongside infrastructure bodies and federal members including. From The Co-operative Party to ABCUL to the BSA, when we work together the Co-operative Movement moves.”