More businesses have social goals than official figures say, report claims

Study finds one in five UK businesses have social difference as primary goal

The number of businesses in the UK that are run according to social principles is almost four times as large as the official Government figure for social enterprises, according to a study by an economics consultancy and a research agency.

The study of more than 2,000 entrepreneurs in the UK by Delta Economics and IFF Research found that more than one in five operated a business that had a primary social goal. If the results were extrapolated nationally, this would be equivalent to about 230,000 businesses with a turnover of about £97bn, the report says.

The study found that about half of these "hidden social entrepreneurs" met a stricter definition of social enterprise: that they had social benefit as their primary goal, reinvested their surpluses in the business, did not pay a dividend to shareholders and had sales that were more than 25 per cent of revenue.

The report says that this would be equivalent to about 100,000 businesses nationally, with a turnover of about £17.7bn.

However, most of these businesses were registered as for-profit, did not have any form of asset lock and would not consider themselves part of the social enterprise sector, the report says.

Rebecca Harding, managing director of Delta Economics, said the survey showed that many social entrepreneurs were still unaware that they were part of a wider movement.

"The social enterprise movement needs to reach out to these people and make sure they are part of the overall social enterprise world," she said. "One thing we found is that they do not identify themselves as social entrepreneurs, even if they meet the definition."

She said the fact that there were many more social enterprises than were shown by official Government figures also raised the profile of the sector.

"Social enterprise is a lot more mainstream than people realise," she said. "It's not just something carried out on the fringes."

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