City regulators have announced a package of changes aimed at bolstering growth across the mutuals and co-operatives sector, following the Labour government's promise to double the size of the £223bn industry. Top officials from the Financial Conduct Authority (FCA) and the Bank of England will join City Minister Lucy Rigby in Rochdale on Friday to set out plans to streamline regulation, simplify applications, and launch a new mutual societies development unit.
The moves come after a year-long review, launched after the 2024 election, which found that some mutuals had struggled to scale up, invest in new technology, and compete with private corporations. The FCA's chief executive, Nikhil Rathi, said the changes would help create 'long-term, sustainable growth in the sector, and ensure a competitive landscape which gives them good opportunities to compete and to grow their enterprises'.
Mutuals are member-owned organisations designed to serve their members' needs. There are 8,400 co-operative and community benefit societies in the UK, ranging from housing associations to social clubs and retail societies, in addition to financial mutuals such as insurers, building societies, and credit unions, which serve about 30 million members and hold more than £223bn in assets.
Key initiatives include streamlining applications for new mutuals, which currently require excessive time and money on solicitor declarations. Regulators will also offer personalised pre-application support and open discussions with mutual building societies on preparing for potential mergers and acquisitions, which are becoming increasingly popular. This follows recent acquisitions such as Nationwide buying Virgin Money and Coventry snapping up the Co-operative Bank.
Laura Wallis, a director at the Bank of England, noted that some mutuals may see mergers as a way to gain scale, but stressed that regulators are 'agnostic on sector structure'. Rathi added that the package would support organisations that are often a lifeline for local communities, promoting financial inclusion and serving underserved markets.
