Social enterprises are outperforming the wider economy in almost every area of business, according to research by Social Enterprise UK.
The State of Social Enterprise report, launched yesterday by Rob Wilson, minister for civil society, says that social enterprises have higher start-up rates, grow faster, and create more jobs than standard businesses.
The research finds that 35 per cent of social enterprises were established in the last three years - almost three times the proportion of new small and medium enterprise start-ups (SMEs).
There are currently 70,000 social enterprises in the UK, according to current official government statistics, although the actual figure may be higher, a spokesman for Social Enterprise UK said.
"The growth in start-ups does suggest a sector that is growing," the spokesman told Civil Society News.
A growth in the social enterprise sector is also suggested by a membership growth at the organisation, he said.
In April 2015 Social Enterprise UK had 829 members - 168 more than the same time the previous year.
The research also says that social enterprises achieve a greater diversity – 40 per cent are run by women and 59 per cent "actively seek to employ those who are most disadvantaged in the labour market", such as ex-offenders and people suffering from disability.
According to Social Enterprise UK, the average pay ratio between the highest and lowest paid employees is just 3.6:1 for social enterprises.
A the launch of the report on Tuesday, minister for civil society, Rob Wilson said: “This report by Social Enterprise UK is proof that social enterprises continue to make a huge difference to thousands of people's lives and reflects the success of a growing, vibrant sector which delivers both on an economic and social level.
"That's why the government is making it easier than ever for people to invest in social enterprises, helping us to build a truly compassionate society."
Peter Holbrook chief executive of Social Enterprise UK said the findings show that “social enterprises are providing real answers to the significant social and environmental problems we all face” during “a time of public sector austerity and globally networked markets”.
“They are demonstrating that it is possible to do business differently: creating economic growth and jobs whilst also operating fairly and helping those people and communities most in need,” he said.
Cameron pledges more social impact bonds
Last week prime minister David Cameron pledged to scale up the use of social impact bonds in homelessness, mental health and child care charities.
At a speech about localism and central government efficiency on Friday he said social impact bonds were “big step forward” in the government’s use of interventions, paying for private and voluntary sector organisations while delivering savings for the taxpayer.
Cameron highlighted a social impact bond supporting the education charity ThinkForward. He said the project reduced the NEET rate in the London borough of Tower Hamlets by 88 per cent – saving the tax payer £40,000 per pupil.
"I want to take this much further by bringing models like this to scale," he said. "Spending money smartly; saving money overall; improving people’s lives – this is what reform can do."
