The State of Social Value in Public Sector Spending

This quarterly review uses survey data from our Social Enterprise Knowledge Centre to give a picture of sector operating circumstances across the country. The latest results of our Social Enterprise Advisory Panel depict a sector broadly optimistic for the year ahead, persevering in the face of economic uncertainty despite gaps in local and national government support.

Our research with the University of Worcester compares the registration and dissolution of Community Interest Companies (CICs) over the last five years to other businesses, finding interesting differences. We found that CICs were dissolved, on average, at a lower rate than other forms of registered businesses. CIC registration is growing significantly and proportionately more than other business models, but CICs tend to dissolve at a younger age.

This report, supported by the Alex Ferry Foundation, reveals the UK suffers from a business monoculture - an economy dominated by firms that primarily exist to maximise profits, whose short-termism restricts national economic performance. The research reviews evidence from the five largest economies in Europe and found that the UK is an outlier, with lower levels of investment and employment in the social economy. Social enterprises and cooperatives deliver 14% of GDP in the Netherlands, 12% in Germany and 10% in France, but our social economy is only worth around 3%.  Our European peers with bigger social economies enjoy higher wages, more training and greater representation at work – while the UK struggles with weaker economic performance and lower working standards. Analysis shows that growing the UK social economy from 3% of GDP to 12% could raise wages, boost investment, increase employee participation and productivity amongst other things.