Numbers nightmare could jeopardise social enterprise

Numbers nightmare could jeopardise social enterprise

Gemma Hampson, Social Enterprise Live


The boss of the Social Enterprise Coalition has called for a clarity on what social enterprise is and how many there are, following major research challenging the accuracy of current figures.


Peter Holbrook, SEC’s CEO, claimed a loose definition of social enterprise could be harmful to the sector.


His comments follows a report suggesting that the number of social enterprises in the UK could be anywhere between 16,000 and 234,000.


Currently, the Coalition and the government use the figure of 62,000 social enterprises in the UK, a figure released in July last year.


But the report published this week by the Third Sector Research Centre said social enterprise numbers in the UK were not accurate.


The paper suggests that different methods of collecting information based on different definitions made the current estimation incorrect. Information considered by the researchers included the Annual Small Business Survey, figures from the National Council for Voluntary Organisations and the National Survey of Third Sector Organisations.


The report, Approaches to measuring the scale of the social enterprise sector in the UK, was written by Prof Fergus Lyon, Dr Simon Teasdale and Dr Rob Baldock.


It states: ‘Lack of clarity around what is and is not a social enterprise may have led to exaggerated claims about their positive attributes and policies based on expectation rather than evidence.’


An example given by Teasdale was the Annual Small Business Survey – where the 62,000 figure comes from. Teasdale pointed out that this does not include sole traders. If it did, the figure of possible social enterprises could climb to 234,000.


Teasdale said that 90 per cent of the 62,000 figure ‘could not be considered part of the third sector’ because of their structure, which he said included companies limited by shares, sole traders or partnerships.


However, he said that just because they were not third sector organisations did not mean they weren’t social enterprises.


Teasdale could not put a figure on the number of social enterprises in the UK and said it was up to SEC to settle on a definition.


‘It’s important for the Social Enterprise Coalition and Cabinet Office to be clear on what a social enterprise is. SEC should decide on a definition that represents the interest of its members,’ he said.


In response to the paper, Holbrook agreed that the growth of the social enterprise sector in the coming years demanded a stronger identity to help it flourish and to safeguard vulnerable organisations in the future.


‘Individual social enterprises will need to be defined more clearly if they are going to play a much bigger part in UK economy, ‘ Holbrook said.


‘Without more clearly agreed parameters, the progression of social enterprise will be put in jeopardy, a risk we cannot afford at this moment of opportunity.


‘In order to monitor the growth and impact of the sector it is also vital that there is a collective effort from government and from those within social enterprise to commit to improved research and tracking. Only then will we really be able to measure our success and contribution to society and the economy.’


Holbrook added that a stricter definition would prevent the sector being misunderstood amid private sector buy-outs of public services and called for more government support.


‘There is a risk that, resulting from cuts, we will see the creation of spin-off organisations from public services that are not social enterprises, which could be vulnerable to buy-outs from the private sector. We need the government to give guidance and support, and make sure that commissioning enables real social enterprises to thrive.’


Holbrook also said the Social Enterprise Mark would help with the issue of definition.


A spokesman for the Cabinet Office said the 62,000 figure was ‘agreed by the sector’.


‘We use the broad definition for social enterprise agreed by the sector. We remain confident that 62,000 is currently the best estimate against this definition,’ he said.


Also see:
Conculsion: Approaches to measuring the scale of the social enterprise sector in the UK


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