Consultation on changes to the Co-operative and Community Benefit Societies Act 2014

Consultation on changes to the Co-operative and Community Benefit Societies Act 2014

Key Contact: Liz Gibbons

The ongoing consultation on proposed changes to the Co-operative and Community Benefit Societies Act 2014 (CCBS Act) marks an important opportunity to evaluate how well the current legislation enables co-operatives and community benefit societies (CBSs) to operate, expand, and innovate.

1. Evaluating the flexibility and resilience of the CCBS Act in supporting CBSs as they face the increasing pressures of economic volatility, the need for sustainable practices, and the demand for fair labour standards. 
2. Assessing the Act’s impact on growth and innovation, including examining whether existing legal structures foster or hinder CBSs’ abilities to secure funding, develop partnerships, and scale their operations. 
3. Understanding barriers within the Act that may inhibit CBSs from fully realising their potential, especially around governance, operational efficiency, and their capacity to address broader societal issues.

What does this mean for housing associations?

Many housing associations operate as CBSs or cooperatives, and so have a significant interest in the proposed consultation on changes to the CCBS Act. The consultation’s review of the Act’s fitness for modern requirements could lead to legislative adjustments that directly impact housing associations’ operations, governance, and potential for growth:

1. Potential for new funding mechanisms

A key area of the consultation is examining how CBSs, including housing associations, can raise capital without compromising their community-focused mission. Currently, restrictions on raising external capital can limit funding options, making it challenging for housing associations to expand housing stock or invest in upgrades. The consultation may explore:

• New investment structures that allow housing associations to raise funds while protecting member and community interests.
• Greater flexibility in issuing shares or other securities, potentially allowing housing associations to attract more diverse funding sources, which is especially important in the face of rising construction costs and high demand for affordable housing.

2. Enhancing governance and decision-making efficiency

Housing associations often have complex governance structures that emphasise democratic decision-making, but these can sometimes slow down operational processes. The consultation’s focus on governance may lead to:

• Streamlined governance models that could reduce administrative burdens without undermining member control or transparency.
• New frameworks for decision-making autonomy, particularly for housing associations with geographically dispersed memberships, allowing for more agile responses to urgent issues like housing shortages, maintenance, or tenant needs.

3. Addressing regulatory flexibility for innovation and sustainability

As the consultation considers how the Act supports innovation, housing associations maygain greater latitude in exploring new business models, partnerships, and sustainability initiatives. Key areas likely to be addressed include:

• Allowing housing associations to diversify their services or establish joint ventures more easily, which could enhance their ability to provide community services or sustainable energy options.
• Supporting environmental goals, as more associations look to reduce their carbon footprint through sustainable building practices and energy-efficient upgrades. Changes to the Act could make it easier to secure funding specifically for green initiatives or renewable energy projects.

4. Expanding legal protections and access to government support

A review of the Act could consider housing associations’ eligibility for legal protections and government funding programmes. For example:

• Expanded grant eligibility and tax relief might become available, helping housing associations with limited budgets continue providing affordable housing.
• Increased access to government support for co-operative and community benefit societies engaged in public services like housing could make associations eligible for a broader range of social infrastructure funds.

6. Preparing for potential compliance changes

Housing associations may need to update policies, training or processes to ensure compliance with any new regulations that arise. For example:

• Potential future impacts on reporting requirements, or how associations track and report on member engagement, funding sources, or community impact.
• Adjustments in governance or decision-making protocols might require updates to association bylaws or operational guidelines.

Housing associations can respond to the consultation here.

For help in exploring potential governance or compliance issues raised by the consultation, please contact our Social Housing team.