Social enterprise figure 'is too high', says researchers

The Government figures for the number of social enterprises in the UK is not accurate

Simon Teasdale
Simon Teasdale

Official government figures for the number of social enterprises in the UK rely on measures that would be widely disputed, according to academic research published this week.

Challenges of Measuring the Scale of the Social Enterprise Sector, by Simon Teasdale, Fergus Lyon and Rob Baldock, researchers at the Third Sector Research Centre, says that almost 90% of the 62,000 businesses identified as social enterprises in the government's 2009 Annual Small Business Survey should not be considered third sector organisations because they had no asset locks to prevent the distribution of profits.

Teasdale said analysis of third sector organisations that have asset locks and derive more than half of their income from trading, produced a figure of about 16,000. About half of these were charities.

He said the small business survey asked businesses if they obtained income from trading, if they had never distributed more than half their profits to owners and shareholders, and if they identified themselves as having a social purpose. About 234,000 said yes to these questions, but removing sole traders cut the figure to 62,000.

"In 2008, these criteria would apply to two-thirds of FTSE 100 companies," Teasdale said.

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