Coalition does not have a credible plan to promote mutual business

20 September 2011 | News, Research and publications

Mutuals Yearbook 2011Leaders of the mutuals sector have today said that the government must do more to promote mutual forms of business.

Speaking ahead of the 2011 Mutuals Forum, Peter Hunt, Mutuo Chief Executive said:
“The Coalition Agreement promised to ‘foster diversity and promote mutuals.’  So far, there is little evidence of a coherent Government plan to do this.  At the same time, the Mutual sector is the strongest it has been in many years. It employs over a million people and turns over more than £110 billion annually. It’s clear to us that the government needs to work much harder in this area if it is to honour its commitment.”
In the financial services sector, Government has already missed opportunities to move the sector forward by:
  • ending Child Trust Funds, more than 60% of which were successfully provided by mutuals
  • rejecting plans to re-mutualise Northern Rock, even before HM Treasury has received a report on the feasibility of this
  • Treasury failing to support mutual insurers as they argue that their capital structures should be treated different from plcs by Regulators
In the public services, the Cabinet Office has stated an ambition of 1 million public sector workers owning their own firms by 2015.  So far, it has achieved less than 5% of this number.  Unless it immediately makes plans to provide comprehensive support to public sector managers, it is already clear that this target will not be met.
Peter Hunt added:
“When confidence in other types of institutions has collapsed, mutuals have grown, strengthened and showed the way for responsible business in our country. Were the government to seize the opportunity to engage more fully with the sector we would be in a position to genuinely secure and grow more customer focused businesses and radically transform methods of public service delivery.”
  1. The Mutuals Forum, the annual conference of the mutual sector, is taking place on Thursday 20 October 2011 at King’s Place, 90 York Way, London N1 9AG.
  2. The 2011 Mutuals Yearbook is published today, and shows the largest UK mutual sector ever. 
  3. The Chancellor of the Exchequer said  on 15 June that he was minded to sell Northern Rock, even before UKFI has produced its report on its future
  4. In September, in response to a Parliamentary Question, the Cabinet Office stated that  “45,000 public sector workers are now in mutuals, with the aspiration to have 1 million public sector workers in mutuals by 2015. “