What Co‑ops and Mutuals Are
A Mutual is an organisation that is owned and run for the benefit of its members—both current and future. All Co‑operatives are Mutuals, but not all Mutuals are Co‑operatives.
A Co‑operative is a specific type of Mutual that follows the Seven International Co‑operative Principles, which guide how co‑ops operate around the world.
How Co‑ops and Mutuals Work
Co‑ops and Mutuals can operate in any business sector. Their legal structure is what makes them a Co‑op or Mutual—not the type of business they run.
What really sets them apart is why they trade:
- They must make a profit to survive, but profit is not their main purpose.
- They are driven by values, such as community benefit, fairness, and environmental responsibility.
- Their members decide how the organisation is run.
Co‑ops and Mutuals are:
- Value‑led
- Membership‑based
- Democratic
The Democratic Economy
Co‑ops and Mutuals form part of a wider sector known as the Democratic Economy, which includes:
Examples
Co‑operatives
73.0% (Sector share) The Co‑op Society
Employee‑owned businesses
23.1% (Sector share) John Lewis, TEAL Group Holdings
Mutual insurers
1.4% (Sector share) NFU Mutual
Building societies
0.4% (Sector share) Nationwide Building Society
(Source: Co‑ops UK)
Economic Impact
The UK has over 10,000 Co‑operatives and Mutuals. In 2025 they generated £179.2bn in income, even though they make up only 0.2% of all UK businesses.
Despite their small number, they have a big economic impact:
- They contribute £35bn in direct Gross Value Added (GVA)
- They support more than 1.5% of UK GDP
This strong return explains why the Democratic Economy is seen as a growth sector.
(Source: Co‑operatives UK)
Trends, challenges, opportunities facing the sector in Hull and East Riding
Local data and trends
The Hull and East Riding of Yorkshire’s Co-operative and Mutual economy is worth £237.9bn, with more than 45 active enterprises. The oldest organisation in the sector has been operating for 146 years. The Hull and the East Riding of Yorkshire area supports less than 0.5% of the UK’s national Co-operative and Mutual organisations.
Together, Co-operatives and Mutuals employ over 4,200 people locally. Co-operatives make up nearly 60% of all the enterprises in the local Mutual economy
The largest number of organisations in the local Mutual economy in our area are sports and social clubs.
- 61.7% are located within the East Riding of Yorkshire and 38.3% in Hull.
- The Hull and East Riding of Yorkshire’s Co-operative and Mutual sector generates £46.5m in direct Gross Value Added (GVA).
- 38.3% of the organisations locally have been trading for between 21 and 50 years and represent the greatest market size (92.8%) and employment (96.7%)
Locally, the largest enterprises and employers are in the Health Care and Housing sectors
There have only been 7 start-ups in the last five years representing less than 0.1% of the market. 25% started within the last ten years representing less than 0.2% but the enterprises themselves are growing - 55.3% of Hull and the East Riding of Yorkshire’s Co-operative and Mutual sector are growing.
Challenges
There are specific challenges that the sector faces at all stages of its entrepreneurial journey from pre-start, to start up and to growth:
- Lack of Knowledge about Co-operatives and Mutuals: There is a lack of knowledge about Mutual and Co-operative models; in the general public (who are the source of new starts and potential members/customers); professional business advisors (who support start up and growth) and prestart entrepreneurs themselves (to consider the alternative business and organisational forms).
- There is also a lack of knowledge about Mutual and Co-operative models amongst potential investors outside of sector specialist organisations.
- Access to capital: The unique membership structure of Co-operatives and Mutuals mean that unlike traditional companies they cannot easily issue equity shares to external investors without compromising their member-owned structures and internal democracy.
In order to grow they rely on retained surpluses or member funds which limits their ability to scale up rapidly, to take innovative risks or makes them slower to invest in new technology. Traditional Bank finance is often an issue at every step of the process from start up to growth as banks do not understand the way membership structures of Co-operatives and Mutuals work and how this affects their risk profiles.
Opportunities
The Government has announced its ambition to double the size of the sector and for Co-ops and Mutuals this seems to focus on:
- Enabling Growth in New and Emerging Sectors: The challenge for national, regional and local government is essentially how growth plans for new emerging sectors can be adapted to create space for Co-ops and Mutuals.
- Enabling Scaling Up: Finding ways for existing Mutuals and Co-operatives to scale up to deliver economic benefits – building on their stability and excellent GVA contributions and addressing specific barriers the sector faces around growth.
- Enabling Conversion: Supporting existing businesses to convert to Mutuals to allow the economy to reap the benefits of the stability and community return that such business structures deliver.
Sources of Support
Specialist Support Organisations:
Co-operatives UK www.uk.coop a national membership organisation for Co-ops that has lots of good information on its website. They also have support programmes funded by the Co-operative Bank. They have free Webinars.
Community Shares Unit www.uk.coop (Partnership of Co-operatives of UK and Locality) comprehensive range of financial and technical support to help community businesses raise capital.
CERT CIC www.cert-ltd.co.uk Social enterprise support for the third Sector on a paid consultancy basis.
Generalist Support Organisations:
Sector Connect Hull https://sectorconnecthull.org.uk - A joint service provided to Voluntary and Community Sector organisations and social enterprises provided by The Forum and Hull CVS in Hull.
HEY Smile Foundation www.heysmilefoundation.org A service provided to Charities, Voluntary and Community Sector organisations and social enterprises in Hull and East Riding of Yorkshire.