The UK’s co-operative movement finds itself facing an uncertain political backdrop this week, with local elections changing a number of councils and growing uncertainty over the fate of prime minister Keir Starmer. Meanwhile, the government is trying to push on with business, with some measures supporting co-ops and credit unions in the King’s Speech.
The King’s Speech – which puts on a statutory footing measures previous announcements of interest to the co-op sector, including on credit unions and renewable energy – was overshadowed by the previous week’s local election results, which saw swings away from Labour to Reforms and the Greens.
It has also failed to quell discontent in the Labour ranks over Keir Starmer’s leadership, with Wes Streeting quitting as health secretary and calling on the prime minister to resign. Streeting is reportedly considering a bid for the premiership, as are Angela Rayner, Ed Miliband and Labour/Co-op mayor of Manchester Andy Burnham, who is looking to contest Makerfield in a by election after Josh Simons stood down as MP to offer him a route into Parliament.
Held on 7 May, the local elections saw Labour take 1,068 seats, a decrease of 1,496 seats. It was also a bad day for the Conservatives, who took 801 seats, a decrease of 563.
Meanwhile, Reform took 1,453 councillor positions, an increase of 1,451; the Lib Dems took 844 seats, an increase of 155, and the Greens took 587 seats, an increase of 411.
Labour lost control of 38 councils, Reform UK gained 14 councils, Conservatives lost six councils, the Liberal Democrats gained one council, Green gained five councils, and 23 councils switched to being in a state of no overall control by a political party.
A spokesperson for Labour’s sister organisation, the Co-operative Party, said: “These are a difficult set of results for the Labour movement. Co-operative councillors have worked hard to campaign on issues like community empowerment, decision making and ownership, and the Co-operative Party will continue to focus on this work as we believe these co-operative values are a cornerstone of building a better Britain.”
Following this set of elections, the Co-op Party has 1,250 councillors across the country, down from more than 1,500.
This has implications for the co-operative councils movement, which has used community ownership, community wealth building and other democratic economy tactics in an effort to engage residents and manage austerity budgets.
The Co-operative Councils Innovation Network (CCIN) is a non-partisan organisation but on the ground, its membership is overwhelmingly made up of Labour authorities.
Last week, Labour lost control of CCIN member councils Birmingham (to no overall control), Brent (NOC), Hackney (to the Greens), Lewisham (to the Greens), Milton Keynes to NOC), Preston – a flagship of the community wealth building project – (to NOC), Sunderland (to Reform), Swindon (to NOC), Tameside (to NOC), Tamworth (to NOC), and Westminster (to the Conservatives),
Meanwhile, the Lib Dems lost control of Hull (to NOC, and Inverclyde, Kirklees, Oldham, Oxford, Peterborough remain under no overall control.
“The 2026 elections expose a real fragmentation of the UK political landscape,” said Pete Vallance, membership and engagement lead at CCIN. “In local government, a co-operative approach, delivering for residents at a neighbourhood level, could be the quiet winner from last week’s results.
“We’ve already had representation from one newly elected Green council keen to maintain their membership with CCIN, and we remain firmly focused on delivering for all of our Network’s ever-expanding membership.”
CCIN chair Jim Robbins, leader of Swindon Council, where Labour lost overall control, added: “It has been a tough election for a number of our member councils and we are working through the results to really understand them and the impact on the network.
“We will be supporting those councils where control has changed, and working to make sure the positive impact of co-operative policies remain.
“We were disappointed to see outstanding Co-operative councillors lose their seats, and we hope that many will return to politics in time. Our exciting policy labs will remain, and we will be starting more Labs to build back the network and continue to share positive co-operative policies.”
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Cllr Paul Cassidy, vice-chair of CCIN, from Inverclyde Council, said: “CCIN has always brought together councils across party lines to deliver practical solutions that deliver for local communities. While political balances have shifted, the commitment to collaborative, community-led government remains strong — and more important than ever as councils face growing pressures to deliver for residents with increasingly stretched resources.
“Looking ahead, we see real opportunities to deepen this work by continuing to build cross-party partnerships to advance shared priorities particularly around community wealth building, strengthen local economies and tackling inequality. We will also continue to make an unapologetic case for a co-operative economy that keeps wealth, power and opportunity rooted in local communities.”
There have also been significant changes at national level. In Scotland, the SNP have won their fifth successive election, although they are seven seats short of a majority. But in Wales there was a historic result with Labour losing the devolved Welsh government to Plaid Cymru.
Welsh co-op development agency Cwmpas had worked closely with the Labour administration on co-operative policies and has sounded a positive note in terms of continuing this with the new government.
“Cwmpas congratulates all new and returning members of the Senedd,” said CEO Bethan Webber, “and looks forward to working constructively with the new Welsh government, and with parties across the Welsh parliament, to build a more prosperous and co-operative Welsh economy.
“It was positive that Plaid Cymru’s manifesto contained a number of commitments that could significantly strengthen Wales’ co-operative, community-owned and social enterprise sectors. We were pleased to see community wealth building at the heart of the manifesto, with specific commitments to provide more specialist support for co-operative, employee-owned and social businesses, and improved access to finance through the Development Bank of Wales.”
She added: “Proposals for a Community Right to Buy – making it easier for valued local assets like pubs, shops, cafés, buildings and land to move into community ownership – are sorely needed. Wales is now lagging behind the rest of the UK on this agenda, so it is encouraging that this was part of the party’s ‘First 100 Days’ document and has a growing consensus across the Senedd.
“There are plenty of other positive opportunities that we welcome, including strengthening progressive procurement; expanding social enterprise and co-operative models in social care; and supporting community and co-operative ownership of cultural spaces, as well as promoting shared resource hubs for freelancers and self-employed workers in the creative industries.
“Cwmpas stands ready to work with the new Welsh government and partners across Wales to turn these commitments into impactful change.“
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The election results have left Labour reeling and put renewed pressure on leader Keir Starmer, whose attempt to reset his leadership with Wednesday’s King’s Speech has failed to quell talk of a leadership challenge.
The policy package, which includes limiting trial by jury, changes to the NHS and building closer post-Brexit ties with the EU, comprises previously announced measures which have not yet found government time – and has met with a muted response.
But the Building Societies Association (BSA) has welcomed “important measures to support growth, housing and financial inclusion” – particularly the Enhancing Financial Services Bill, which includes reforms to enable credit unions to expand membership and serve more communities, helping widen access to affordable finance.
The bill also aims to modernise the regulatory framework and support lending to households and businesses, creating opportunities for mutual lenders to grow.
“Credit union reforms will help them grow, enabling more people to access fair, straightforward financial services – essential at a time when household finances are under real pressure, ” said BSA CEO Sarah Harrison. “Access to affordable borrowing and a safe place to save can make a real difference.
“We’re also encouraged that changes to building society legislation are due to be progressed before the summer recess. Keeping the Building Societies Act up to date will help building societies compete on a level playing field with banks and do more of what they do best: innovating to support first-time buyers and help people build financial resilience. Building societies already provide one in three first-time buyer mortgages and enabling the sector to grow means supporting more people and communities across the UK.”
James Wright, policy and development lead at Co-operatives UK, also welcomed credit union reform, but expressed disappointment that “the government did not commit to modernising co-op law in this session”.
Wright also welcomed plans for commonhold reform, adding that this “needs to enable co-op forms of commonhold. Developing secondary co-ops of commonhold associations could be important.”
He added: “Government reform in NHS Trusts could and should enable more effective multi-stakeholder mutuality. It does not have to be the end of mutuality in the NHS.
“And Great British Railways could be established as a mutual that brings together passengers and workers as members.”
James Alcock, CEO of Plunkett UK, which represents rural community businesses, said: “The King’s Speech was missing some mentions of rural communities, but in recent meetings we have been encouraged by the proactive approach from civil servants and policymakers who are pushing forward important work on key initiatives.
“There is ongoing engagement by Plunkett UK around many of the sector’s policy priorities – including the policy asks developed across the co-operative movement – from growing co-operatives and strengthening the Community Right to Buy, to better understanding the increasingly challenging tax and operating environment facing community businesses.”
Plunkett continues to call for a dedicated Community Ownership Fund, added Allcock, with explicit inclusion of rural communities, “recognising that rural places often face unique barriers but also have enormous potential when local people are empowered to shape their own future.
“These policies would provide both a catalyst for new community businesses and security for existing businesses. This will help to provide economic growth, social impact and jobs in local communities across the UK.”
