UK social enterprises number 450,000+, government study finds | The social enterprise magazine

The latest UK government research identified 456,000 social enterprises in the UK employing 1.9 million people.

This finding is similar to the sector wide described in previous government research, but much larger than the 100,000 social enterprises identified by Social Enterprise UK.

Social Enterprise: 2019 Market Trends was published on 31 August 2022. It was written by the Center for Enterprise and Economic Development Research (CEEDR) at Middlesex University Business School and commissioned by the Civil Society and Youth Directorate of the Department for Digital, Culture, Media and Sport (DCMS) which coordinates UK government social enterprise policy.

The research aims to identify the number of social enterprises among small businesses in the UK, using the DCMS definition which includes social enterprises in the voluntary sector as well as mission or purpose enterprises with legal forms from the private sector. The researchers point out that the figures were gathered before the Covid-19 pandemic.

One in ten small businesses in the UK are social enterprises

Researchers estimate that there are 131,000 social enterprises with employees within the UK’s small and medium-sized business population – businesses that have 250 or fewer employees.

This means that almost one in ten small and medium-sized businesses in the UK that employ people are social enterprises.

The researchers also found 325,000 sole traders who meet the definition of social enterprise.

“Given current concerns about health and socio-economic factors related to the Covid-19 pandemic and Brexit, this report is an important policy tool,” the researchers write in the report’s introduction.

“Social enterprises of various types have a key role to play in helping local economies build back ‘better’ (and fairer), in line with the government’s industrial strategy, and providing services that are essential to the well-being of local people. individuals and communities across the UK.”

The last time this study was carried out was in 2017, when the figure was 471,000 social enterprises, employing just under 1.5 million people. The researchers note that the two studies are not directly comparable.

The most recent survey from Social Enterprise UK, the representative body for social enterprises, calculated 100,000 social enterprises across the country, using a different definition, as well as including businesses with more than 250 employees.

Social enterprise in the UK: the latest facts and figures

  • There are 131,000 social enterprises with employees
  • 35,000 of the 131,000 social enterprises with employees have legal forms that restrict the distribution of profits and assets
  • There are 325,000 social enterprises which are sole proprietorships
  • Almost 1 out of 10 (9.5%) of UK small and medium-sized businesses that employ people are social enterprises
  • Social enterprises employ 1.9 million people: 1.3 million of them are employees and the rest are working owners and associates
  • Social enterprises are much more likely to report face obstacles in obtaining grants and loans than other small and medium-sized enterprises
  • Social enterprises are much more likely to apply for grants and funding from government and local authorities than other small and medium-sized enterprises
  • Social enterprises are significantly less likely ask for bank overdrafts than other small and medium-sized enterprises
  • Social enterprises are significantly more likely to be involved in health, education, arts, entertainment and personal services and less likely to provide business services than other small and medium enterprises
  • Social enterprises are less likely to be run entirely by men than other small and medium-sized enterprises
  • More social enterprises have leaders of minority ethnic groups than other small and medium-sized enterprises
  • Most social enterprise employers are micro-enterprises (with between one and nine employees)
  • Almost half of the social enterprises that employed people had been in existence for more than 20 years and just over 70% were ten years or older
  • A quarter of social enterprise employers have undertaken public sector employment contract

Source: Social Enterprise: 2019 Market Trends

Social Enterprise: 2019 Market Trends defines social enterprises as “a diverse range of organizations that have an explicit social mission, derive at least 50% of their annual income from commerce, and reinvest at least 50% of their annual surplus in their social mission”. Although this definition includes companies that have legal forms – such as limited liability companies and community interest companies – that restrict the distribution of profits and assets, it is not limited to these.

The report draws its data from the Longitudinal Survey of Small Firms conducted by the Department of Business, Energy and Industrial Strategy.

The researchers note that a narrower definition of social enterprise is used by other organizations that map the sector. The European Union and Social Enterprise UK surveys focus primarily on social enterprises that incorporate asset locking and limits on profit distributions.

Header photo: the team of the social enterprise NEMI Teas, which has four employees. Read more about the growth of this London-based company supporting refugees in our social enterprise profile.

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