Liverpool’s social economy worth £3bn a year

Liverpool’s social economy is significant, so why is it pushed to the periphery, asks Alan Southern

Research at the Heseltine Institute at the University of Liverpool is beginning to indicate the size of the city region’s social economy.

Our definition of a social economy includes charities, social enterprises, co-operatives and some of the larger anchor institutions like universities, housing associations and large charities – included because they operate to meet a clear social purpose – along with smaller social organisations.

For this work we have worked with our colleague at Seebohm Hill, Helen Heap, who has pulled together various datasets to build a database specific to this research.

Our work shows that there are just under 1,400 social organisations in the Liverpool city region. We estimate this to be a sector that generates a revenue of around £3bn a year. It holds assets of some £4bn and directly employs about 45,000 people. In comparison, the local enterprise partnership (Lep) for the city region estimates that the visitor economy has an economic impact of £4bn and supports over 50,000 jobs.

The visitor economy is cited by the Lep as a strategic strength for the city region, and one only has to walk around Liverpool city centre to see tourism in action. Yet the social economy certainly provides a similar economic affect without even taking into account any measure of its social value.

Social sector should be at centre of local economy

One of the reasons for the marginalisation of the social economy is its skewed nature. For while this is an economically robust sector, this is distorted by the distribution of social organisations.

The social economy has a small number of large organisations, just 3%, who account for almost 75% of all the revenue generated, assets and jobs. The rest are small enterprises and organisations.

We know that over half of all social organisations have a net asset value of less than £75,000; about a third of social economy enterprises have a net asset value of less than £10,000, while 11% disclosed a negative net worth. Over a quarter of city region social organisations generate an annual income of less than £50,000 while half have an income of less than £250,000.

If we take a second to reflect on this we can see the significance of what is often referred to as an ‘alternative’ and asked why it is pushed to the periphery in local economic planning.

Instead we should be seeing this sector as central to localities. We should recognise the asset base and to ask how we can support some of the smaller organisations to grow and how the larger organisations can use their assets and spending power to create more social value in the local economy.

The size and the scope of the Liverpool city region social economy is impressive and it provides us with the foundation to talk about social and economic value in a constructive way; to say to the combined authority and the Metro Mayor elect that here is a narrative about the locality that can be exploited in a positive manner, one that is inclusive and purposeful. We aim to use our research to help stimulate a broader debate on how the social economy can bring more social and economic benefits to the local economy.

• For more information on this work contact Alan Southern at the University of Liverpool Heseltine Institute for Public Policy and Practice: alan.southern@liverpool.ac.uk