Co-operatives UK has revealed the co-operative economy has slowed with turnover only increasing slightly to £37 billion, up £400 million.
This growth may be de-growth once inflation is factored in.
Disappointing growth in turnover was accompanied by a decline in membership. UK co-operatives have 13.7 million members, slightly down on last year, and the number of people employed by co-operatives slightly dropped as well.
Strong survival rate
But despite slow expansion the economic performance of co-operatives remains strong.
The survival rate of co-operatives after 5 years is 72 per cent, 29 per cent higher than that of conventional businesses.
This means co-operatives continue to function as a more sustainable and resilient business model.
It is clear the wider investment in the long-term goals of the company result in greater survival rates.
Grassroots work
In a statement James Wright, Co-operatives UK’s head of policy, said:
“The size of the co-op economy in the UK – proportionally – still lags behind many other nations.
“There’s a lot of great co-op development work taking place on the ground which isn’t really represented at a macro level.
“The work at a grassroots level is crucial, but we do want to see more impact in terms of the UK-wide picture – and it’s fair to say there’s much work to be done.
“Co-ops remain resilient; business survival rates are much higher than other business forms; we can point to worker co-ops with 1:1 pay ratios and no gender pay-gap.
“In a world of increasingly discerning customers, who aren’t simply turning to price and will also decide on products and services based on values, co-ops should be a natural choice.
Awareness of co-ops
“Yet awareness of co-ops remains low, among would-be founders and those who advise them.
“Co-ops, collectively, need to work harder to demonstrate why and how they do business better.
“More support is needed at central and local government level to provide start-up and growth advice which supports the co-operative option.
“There needs to be more education on the benefits of co-operation.
“Financial services must be better placed to serve the needs to co-ops.
“And bodies like Co-operatives UK need to act as enablers for all these things and unite the sector behind important campaigns.”
Nationwide Building Society
There is some hope for the co-operative economy as the report excludes certain co-operatively owned businesses.
Despite being a member of Co-operatives UK, the growing Nationwide Building Society is excluded from the report.
The co-operative banking sector has seen large expansions in members and turnover that is not recorded by Co-operative UK’s report.
Due to this agriculture and retail dominate the co-operative economy, with £34 billion coming from these sectors.
Despite this turnover of customer controlled co-ops, federal co-operatives, is down long term despite growth this year.
Worker co-operatives
Worker co-operatives are showing much stronger growth with a turnover of £11 billion, up £600 million in 4 years despite there being less worker co-operatives.
Many worker co-ops, like Suma in Elland, West Yorkshire, and Manchester’s Unicorn Grocery, operate on an equal pay structure meaning they have narrowed the gender pay gap to zero.
There has been a five fold increase in community controlled pubs despite an increasingly hard business environment for pubs.
Geographical spread
The majority of the UK’s co-operatives are in England, which has 5,898 co-ops with 10.9m members, but Co-op development in Scotland and Wales is boosted by government policy and funds.
Both Scotland and Wales created more co-ops than England when correlated against business population.
The UK co-operative economy is extremely weak compared to more developed nations and many economic thinkers believe that a large co-operative sector is critical to building a resilient, sustainable just economy.
Labour have pledged to double the size of the co-operative economy in their first term in office.
The Preston Model
They hope to do this by promoting community wealth building strategies like the Preston Model and streamlining regulation around co-operatives while bring in laws such as the Macora law. They also to hope to use regional investment banks to promote co-operatives as they recognise their benefits to the wider economy.
Employee Ownership Association (EOA) and Co-operatives UK have come together in a campaign called #1Millionowners.
They want to see a fivefold expansion in employee and worker ownership over the next decade, leading to one million employee and worker owners in the UK by 2030.
They hope to put the promotion of employee owned companies as a policy objective nationally and locally, with funding allocated by the Westminster Government in the Spending Review.