Social enterprises contribute £60bn to UK purse, research suggests

A new report published by SocialEnterpriseUK has revealed that the Government has underestimated the contribution social enterprises make to the UK economy.

Government estimates suggest there are 70,000 social enterprises, worth £24bn to the UK economy, but SocialEnterpriseUK’s research claim this is a significant underestimate as it excludes large social enterprises such as building societies and many co-operatives.

In total, the report says social enterprises are worth £60bn to the UK economy and employ 2 million people.

This represents 3% of UK GDP, three times the size of the agriculture industry, and 5% of employment, as many jobs as the creative industries sector.

Government estimates of the number of social enterprises have been based on the Small Business Survey (SBS), so SocialEnterpriseUK studied Companies House for larger businesses currently trading that were missed by the SBS survey.

‘Our analysis estimates that social enterprises are worth billions more to the UK economy than previously considered,’ said Dr Rebecca Harding, independent economist.

‘It seems that social enterprises make a similar contribution to economic life in the UK as the creative industries sector, for example.

‘I hope that our approach can be built, modified and improved upon in future to provide a better understanding of the contribution of these companies to the UK, so they are no longer underestimated,’ she added.

The report says all public sector procurement should be influenced by social value by 2025, up from the 9% figure currently.

They would also like to see Government introduce company law that gives greater regard to the social potential of business and investment as well as more joined-up and smarter regulation from a better resourced FCA, Charity Commission and Companies House.

The report also would like to see £2bn of ‘untapped’ dormant assets, such as unclaimed insurance and pension funds, spent on communities so they can ‘take greater control of their local economies and make it easier for savers to invest for a social purpose.’

Karen Lynch, chief executive, Belu said: Any business can make a difference, but they need the support and encouragement of government to have the biggest possible impact. I hope that this report will encourage a greater recognition of the value of social enterprises.’

Read the report here

Thomas Barrett
Senior journalist - NewStart Follow him on Twitter


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