City regulators have announced a package of changes aimed at bolstering growth across the mutuals and co-operatives sector after the Labour government promised to double the size of the £223bn industry.

Top officials from the Financial Conduct Authority (FCA) and the Bank of England will join the city minister, Lucy Rigby, in Rochdale – the birthplace of the UK’s co-operative movement – on Friday to set out plans to streamline regulation, simplify applications and launch a new mutual societies development unit to provide expert advice and support.

It follows a year-long review, which showed that some mutuals had struggled to scale up, invest in new technology and compete with private corporations.

The review was launched after the 2024 election, following Labour’s manifesto promise to double the size of the mutuals and co-operative sector.

The FCA chief executive, Nikhil Rathi, told the Guardian 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 the needs of their members.

There are 8,400 co-operative and community benefit societies in the UK, ranging from housing associations to social clubs and retail societies. This is 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.

The FCA supervises financial mutuals and is also responsible for registering and overseeing the UK’s wider mutuals sector.

Last week, the Department for Business and Trade launched a consultation to support non-financial mutuals and existing businesses hoping to transition to co-operative ownership models.

As for the regulators’ plans, Rathi said streamlining applications for new mutuals and co-operatives was likely to have the biggest impact, with organisations currently having to spend excessive time and money on solicitor declarations before they can form their societies.

They will also receive personalised pre-application support, while financial regulators plan to open discussions with mutual building societies on how to prepare for potential mergers and acquisitions, which the FCA says are becoming increasingly popular in the sector. That includes acquiring banks, with Nationwide buying Virgin Money and Coventry snapping up the Co-operative Bank.

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Laura Wallis, a director on the board of the Bank of England, will say in a speech on Friday: “Some mutuals may determine that mergers may be a mechanism for gaining scale to maintain the provision of services for their members.

“Last year, we saw two building societies diversify by acquiring retail banks. We are often asked if the regulators would like to see more consolidation in the mutuals sector and, while we stand ready to support mutuals which wish to enter mergers or transfers of engagements, from a regulatory perspective we are agnostic on sector structure.”

Rathi said he expected the larger package of initiatives, including the mutual societies development unit, would support organisations that were often a lifeline for local communities. “Mutuals are an important contributor to the economy, to communities, to consumer trust and financial inclusion. They have got a long history of focusing on value and choice, often to underserved communities and markets.

“And while these underserved communities may be – in terms of the aggregate GDP – quite a small number, it’s an important part of society. And we don’t want people left behind without access to key products and services. So I think that mutuals are important for financial inclusion and that glue in society and in our communities.”