- Value of social enterprise sector found to be significantly underestimated at £24 billion versus the real contribution it makes of £60 billion
- New evidence shows social enterprises are performing better economically than traditional firms
- Sector employs 1 in 20 people and accounts for 3% of GDP – three times larger than agriculture and as big as creative services
Government must harness the collective power of the UK’s growing social enterprise sector if the UK economy is to become more competitive and inclusive, new research shows.
The research by Social Enterprise UK, supported by the Co-op Group and Nationwide Building Society, has found that the size of the social enterprise sector has been significantly underestimated. It defines the sector as organisations with an enshrined primary social or environmental mission and which principally direct surpluses towards that mission.
The combined contribution of social enterprise to the UK economy is now recognised to be £60bn, compared to the £24bn that had been previously estimated by the government and Social Enterprise UK.
For the first time, research has considered the impact of 5,000 larger social enterprises, as well as small and medium-sized social enterprises. Taken together with other data, this means that there are around 100,000 social enterprises, contributing £60bn to the UK economy and employing 2m people.
In total, social enterprises are worth around 3% of UK GDP – three times larger than the agricultural sector – and 5% of all UK employment, employing as many people the entire creative industry sector.
This new research has been released at a time when social enterprises are outperforming traditional forms of business and contributing more to society:
- More social enterprises are growing compared to the rest of UK business – 47% of social enterprises grew their turnover in the last 12 months, compared to 34% of UK business
- Social enterprises are more innovative compared with other firms – 50% introduced a new product or service compared with just 33% of small and medium sized businesses
- The wider inclusive economy contributes more in tax than private companies without a social purpose – Britain’s top 5 co-operatives pay more tax than Amazon, Facebook, Apple, eBay and Starbucks combined
Social Enterprise UK, the Co-op Group and Nationwide Building Society are calling on the government to take greater notice of the growing importance of the sector and back its growth through a comprehensive package of measures. This would build on the Civil Society Strategy published last month and the Industrial Strategy published by government last year. Measures could include:
- Using public procurement policy to support social enterprise through strengthening the Social Value Act
- Amending company law so that businesses have to give more regard to their social and environmental responsibilities
- Consider how the tax system can incentivise businesses which have a social as well as an economic impact on society
- Embedding social enterprise in the school curriculum so that young people are aware of the option of starting or working for a social enterprise
Social Enterprise UK, the Co-op Group and Nationwide Building Society say that without backing social enterprises, the country will struggle to remain competitive. This would leave communities up and down the country more vulnerable.
Commenting on the research, Lord Victor Adebowale, Chair of Social Enterprise UK said:
“The public, politicians and experts all agree that we need to find a different way of doing business if we are going to balance growth with the needs of society. Fortunately, we have 100,000 social enterprises which are working to transform our society whilst boosting the UK’s competitiveness. Their £60 billion contribution to the UK is too big to ignore and is just the start of something that the government must get behind. If it doesn’t, there is a real risk that the UK will get left behind as other countries recognise social enterprise as the future of business.”
Steve Murrells, Co-op Group CEO, said:
“As the report shows, people-centred businesses in the UK are already flourishing and making a huge contribution to the UK economy. Our Co-op has always been run for the benefit of our millions of members and that means we can plough our profits back into local communities up and down the country.”
“Some simple government initiatives around regulation and tax could help to kick-start an expansion of the social enterprise sector and encourage more people-focused decision making in business.”
“At the Co-op our commitment to apprenticeships and the growth of our Co-op Academies is already creating a pipeline of Co-op educated entrepreneurs. We’d like to see Business Schools and Economics departments introduce social enterprise thinking into their curriculums to encourage a different understanding of commercial success.”
David Roberts, Chairman of Nationwide, said:
“Social enterprises aren’t defined by profit and exist to support communities through their actions. A thriving economy needs variety so that ideas and models can be consistently tested and challenged as we seek to do business in a better way.
“We want to see social enterprises used as a benchmark by Government to drive best practice and better customer outcomes. The report shows that growth, sustainability, innovation and fairness are all attributes of the sector.
“Nationwide encapsulates the wider sector – as a longstanding institution of more than 130 years, we were founded for a social purpose, to ensure that ordinary people could access decent housing. Those values remain as strong today.
“Whether it is using technology to improve our leading service – we were the first to offer Internet banking and mobile pay – or becoming the first major high street name to become a Principal Partner of the Living Wage Foundation, our members are always at the heart of every decision we make.”
Notes to Editor
Download the full report here – https://www.socialenterprise.org.uk/the-hidden-revolution
About the Co-op Group
The Co-op is one of the world’s largest consumer co-operatives with interests across food, funerals, insurance, legal services and an online electrical store. It has a clear purpose of championing a better way of doing business for you and your communities. Owned by millions of UK consumers, the Co-op operates 2,500 food stores and over 1,000 funeral homes, with more than 63,000 colleagues and an annual revenue of £9.5bn.
About Nationwide Building Society
Nationwide is the world’s largest building society as well as one of the largest savings providers and the second largest mortgages provider in the UK. It is also a major provider of current accounts, credit cards, ISAs and personal loans. Nationwide has around 15 million customers and members.
Customers can manage their finances in a branch, via the mobile app, on the telephone, internet and post. The Society has around 18,000 employees. Nationwide’s head office is in Swindon with administration centres based in Northampton, Bournemouth and Dunfermline. The Society also has a number of call centres across the UK.
About Social Enterprise UK
Social Enterprise UK is the largest network of certified social enterprises in the UK and the leading global authority on social enterprises. Together with our members we are the voice for the sector. We raise awareness through our advocacy and campaigns and build the evidence base for social enterprises through our research. We have led public policy for 15 years, helping pass the Social Value Act, and are a strategic partner to government. We exist to increase the profile of the sector and build the markets for our members – working with some of the UK’s biggest companies to support them to bring social enterprises into their supply chains. Our members reflect the diversity of the sector ranging from local grass-roots organisations to multi-million-pound businesses. We see social enterprise as the future of business.
Key contact: Andrew O’Brien (email@example.com) / 07889129771