Economists call for government to start recording dedicated social sector statistics

The UK’s national accounts do not account for the contribution of charities or the millions of volunteer hours provided by people around the UK each week, economists have said. 

Research by the charity think tank Pro Bono Economics shows that the national accounts – the statistics that describe the size and nature of the UK’s economy – provide an incomplete picture of the economic contribution of the social sector. 

A report, called Taking Account: The Case for Establishing a UK Social Economy Satellite Account, was commissioned for the Law Family Commission on Civil Society and has been backed by several economists.

The report says that while the UK's GDP figure includes activity such as the proceeds of illegal drug sales, the value of factors including the number of volunteer hours provided by millions of people around the country every week is almost entirely absent.

PBE said that even when it came to the activity of formal social sector organisations, the current approach fell far short. 

The UK accounts do include a “non-profit institutions serving households” category, but this classification omits any organisation that generates income by selling products or services, something many charities and social sector organisations do. 

Instead, data on social sector organisations are spread across different sectors and industries in the national accounts, making it impossible to separately identify the true size of the social sector.

PBE is calling on the government to establish a dedicated social sector statistical account as a first step towards recognising the true size and economic contribution of the social economy in the UK. 

It said this approach, already adopted by governments in many other advanced economies, would enable statisticians to more accurately capture the size and economic contribution of charities, social enterprises and volunteers across the UK. 

Similar accounts established in countries such as the US and France suggest that the social sector contributes about five per cent of GDP on average, making it a significantly larger proportion of a country’s economy than is implied by the UK’s current approach, which returns a figure of just one per cent of GDP.

Andy Haldane, former chief economist at the Bank of England and incoming chief executive of the Royal Society of Arts, said: "What is not measured is not managed. And what is out of statistical sight tends to be out of public policy mind.”

PBE said it has long argued that the chronic undervaluation of the sector in official statistics has led to it being overlooked in policy terms. 

Anoushka Kenley, research and policy director at PBE, said: “Establishing a dedicated social economy satellite account would be an important first step towards recognising the true size and economic contribution of the social economy in the UK. 

“With chronic undervaluation of the sector leading to consistent policy neglect, such a move is essential if the UK is to unleash the full potential of the social sector and so help support a full recovery from the pandemic.”

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