What are co-operatives and mutuals?
Co-operatives and mutuals can be described in a variety of ways, but they generally refer to businesses which are owned by and democratically controlled by members rather than shareholders. Members could be staff, customers or suppliers of the organisation, or other stakeholders in the local community.
Co-operatives are a specific type of ‘mutual’ society which are run for the benefit of their members. This is different to other types of mutuals such as community benefit societies which exist to provide benefits to the community in general. Co-ops are also different to companies limited by guarantee, which are generally designed for non-profit purposes rather than benefits of members (although they may register as this type of company to limit liability). A range of other mutual structures additionally exist, including in the banking sector.
Cooperatives generally run to a ‘one member, one vote’ rule and follow common principles, such as those identified by the International Co-operative Alliance. The Alliance identifies seven principles including:
There is no specific legal form for a business to be incorporated in the UK as a co-operative. Co-operatives, like businesses, will often incorporate to limit the liability of those involved – in the UK they may do so commonly as an industrial and provident society, private company limited by guarantee (or shares in some cases), or a community interest company. Some co-operatives will operate as unincorporated entities, which also adds to the complexity of the landscape when thinking about co-ops and mutuals.
Why are co-ops and mutuals a focus of government policy and what impact do they have?
Co-ops and mutuals have been given increasing focus in government policy in recent times. Along with wider social economy organisations, these types of businesses can play a role in local communities and the benefits generated – both economically and socially – are often felt in local communities. The basic principles of co-ops and mutuals around shared ownership and democratic governance are also powerful attributes for driving forward more inclusive and diverse economies across the country.
With no specific legal structure, co-operatives can often be hard to identify. However, Co-operatives UK, which is a membership organisation for co-operative enterprises in the UK, has reported significant growth in membership from the sector over recent years. 2025 data indicated there were 10,100 co-operatives and mutuals in the UK, up by 6% on the previous year. These organisations are core elements of the social economy and operate across a range of sectors, but particularly in sectors such as social clubs and trade unions, retail, agriculture and housing organisations.
A report by WPI Economics estimated that co-operatives and mutuals represent just 0.2% of UK businesses, but contribute around £35bn in annual GVA – around 1.5% of the UK’s total GVA (increasing to £93bn when accounting for indirect and induced GVA contributions). This is a major contribution and brings significant value to the economy, particularly in a time when growth is the Government’s number one mission. More broadly, social economy organisations also often play important roles in strengthening economic resilience and responding to societal challenges across the country.
How have co-ops and mutuals featured in recent policies and interventions?
The elevated profile of co-operatives and mutuals in the UK in recent years has been supported by a number of announcements and interventions, including the Government committing to doubling the size of the co-operatives and mutual sector, in recognition of their value. Some of the key developments include:
In addition, a number of measures have been under development to support financial mutuals, while local areas have been supporting organisations in the social economy through tailored schemes (including as funded by UKSPF).
What could come next for co-ops and mutuals?
Following recent announcement, the co-operatives and mutuals sector is set for significant expansion and is likely to continue to receive a high profile as part of government and wider policies. While co-operatives have a range of opportunities, they can also face barriers to growth such as governance costs and access to finance, and these topics may be addressed increasingly moving forward.
In addition to the modernising of policies and a high profile for these types of organisations, there have been indications of interventions to improve business support for the sector. There is currently a call for evidence open until 18 February 2026, with the Department of Business and Trade looking to build an evidence base and better understand the sector. Views and experiences are being sought from co-operatives and non-financial mutuals as part of the call.
At GC Insight our team regularly works with and helps support the co-operatives and mutuals and the wider social economy sector. We build evidence for policies relating to the social economy and community wealth building initiatives, and have recently evaluated schemes in local communities aimed at supporting social economy organisations. Our Growth Flag data tool is used to identify and support businesses across the UK, while we are also a social enterprise ourselves and part of the social economy. Find out more about us and our work, or get in touch with our team.
Published: 03 February 2026
