# Government urged to introduce measure to recognise social sector’s economic contribution

- Link: https://fundraising.co.uk/2021/07/08/government-urged-to-introduce-measure-to-recognise-social-sectors-economic-contribution/
- Published: 2021-07-08T09:00:00+01:00
- Author: Melanie May

**UK economists led by Pro Bono Economics (PBE) have called on the government to
close a “significant gap” in its understanding of the economy by establishing a 
new social economy ‘satellite’ account.**

The approach, already adopted by governments elsewhere would allow statisticians
to more accurately capture the size and economic contribution of charities, social
enterprises and volunteers across the UK. 

Currently, the economists say, the UK’s national accounts provide an incomplete 
picture of the economic contribution of the social sector with the value of the 
volunteer hours provided by millions of people around the country every week almost
entirely absent.

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The UK accounts do include a ‘non-profit institutions serving households (NPISH)’
category but this classification omits any organisation that generates income by
selling products or services – something which 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.

The economists say the introduction of a new ‘satellite’ account would bring all
the data relating to the social sector under one roof, and  enable the ONS to properly
determine the economic and employment contribution of the UK’s non-profit organisations
and volunteering activities. 

This would bring the UK into line with the 28 countries globally, including the 
US, France, Japan and Brazil, that already have social economy satellite accounts,
as well as 10 others that have committed to creating one.

The accounts established in other countries suggest that the social sector contributes
around 5% to 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 
1% of GDP.

PBE has long argued that the chronic undervaluation of the sector in official statistics
has led to it being overlooked in policy terms. The organisation’s report, commissioned
for the Law Family Commission on Civil Society, titled _‘[Taking account: the case for establishing a UK social economy satellite account](https://civilsocietycommission.org/publication/taking-account-the-case-for-establishing-a-uk-social-economy-satellite-account/)’_,
which has been backed by a number of economists, says that a social economy satellite
account would mark an important first step in overcoming this undervaluation and
associated policy neglect.

The move is seen as especially vital in the wake of the pandemic, with the crisis
bringing the consequences of sustained policy neglect into sharp focus. Demand for
support from the social sector has rocketed over the past year, but many organisations
have faced significant constraints on their fundraising capacity. Yet, despite an
apparent funding gap within the sector in the region of £10billion, the government
put together a rescue package of just £750million.

Anoushka Kenley, Research and Policy Director at [Pro Bono Economics](https://www.probonoeconomics.com/),
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.”

 
Andy Haldane, former Chief Economist at the Bank of England and incoming Chief
Executive of the Royal Society of Arts, commented:

> “What is not measured is not managed. And what is out of statistical sight tends
> to be out of public policy mind. A comprehensive set of satellite accounts would
> provide the statistical foundations necessary to improve understanding, and increase
> the impact, of the social sector.”

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