Finance: Social enterprise worth £8.4bn

Social enterprises contribute 1 per cent of the UK economy's GDP, according to new figures announced by third sector minister Ed Miliband.

The Government believes the social enterprise sector is three times bigger than it previously thought.

The latest Department of Trade and Industry research classes 55,000 UK businesses as social enterprises, accounting for 5 per cent of all businesses with employees, producing a turnover of £27bn a year.

The research says they contribute £8.4bn a year to the UK economy. This is larger than the voluntary and community sector's GDP contribution, which has been put at £7.2bn. However, the social enterprise figures include the financial impact of trading charities.

"The figures highlight the significant impact this sector is having on society and the economy in the UK," said Miliband. "The sheer size of the sector illustrates why the Prime Minister has chosen to create an office of the third sector, placing social enterprise and broader sector issues at the heart of government."

In 2005, the DTI said there were 15,000 social enterprises, but it now recognises that as a considerable underestimate.

The 2005 figure included only companies limited by guarantee and industrial and provident societies. Other businesses, such as companies limited by shares, and all firms with more than 250 employees, were not taken into account.

Jonathan Bland, chief executive of the Social Enterprise Coalition, said: "The previous figures missed some of the more significant social enterprises, such as the Eaga Partnership and Cafedirect."

The Government's Social Enterprise Action Plan was due to be published last week, but has been postponed following the transfer of responsibility for social enterprise from the DTI to the Cabinet Office.

"Although the social enterprise brief has moved, it is crucial that the sector still works closely with the DTI to make sure the right kind of framework exists on the ground," said Bland.

KEY POINTS

- Figures from the DTI show that social enterprises contribute 1 per cent of the UK's GDP

- The Government believes the social enterprise sector is three times bigger than previously thought

- Social enterprises contribute £8.4bn a year to the economy, more than the voluntary and community sector's GDP contribution.

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