The SELUSI Sample in the UK

Out of 163 social enterprises interviewed across the UK, almost one third of the sample (29%) is based in London, 21% is located in Scotland, 16% in Wales. The rest of the sample is fairly evenly distributed within the UK. It seems reasonable to find a large part of the

63 See: http://www.esri.com/ [Accessed: 24 January 2013].

64 GIS has detailed regional-level data for any country in the world, i.e. administrative boundaries, roads, railroads, altitude, land cover, population density, etc. This geospatial data is the ‘original data’ that has to be matched with the address data one wishes to place on a map.

sample located in Greater London, as 13% of the British population lives in this area and around 750,000 people commute into the city every day. London is the leading economic area in the UK and it offers by far the largest contributor to the economy among the English regions and counties of the UK. The economy is very diverse, but for the last two decades, high-value added business services have been the driver of London’s economic growth⁶⁵. As already analysed in various studies, London has a disproportionate share of social enterprise activity, (e.g. Amin et al., 2002; Buckingham et al., 2010; IFF Research Ltd., 2005). This is likely to reflect the distribution of the national headquarters of many social enterprises, plus the fact that London offers a dynamic and innovative environment (Buckingham et al., 2010).

In the SELUSI sample, most of the enterprises located in London belong to either the business, financial, education or social service sectors: 21% operate within the business activity sector (including business-related entrepreneurial activities, e.g. consulting, legal advice and advertisement). Another 21% offer services in the education sector, e.g. nurseries, kindergartens, schools and other venues of education, and 17% are involved in the community and social service sector, e.g. associations, political parties, churches, museums and libraries. 10% are banks, insurance companies and related financial service providers.

Similar to commercial businesses, social enterprises in London benefit from the dynamic business environment as well as access to markets and clients in order to sell their services and products.

Another reason for social enterprises being predominantly located in London is the extent of socio-economic deprivation leading to high demand for solutions to social problems. In the period between 2007 and 2010, 28% of the people in London lived in households with incomes below the poverty threshold⁶⁶, which is the highest proportion in the UK. London also has the highest proportion of socially rented housing in England⁶⁷. Moreover, according to Amin, Cameron and Hudson (2002: 121), London provides a context which is favourable to social entrepreneurship activities as there are “minority cultures expressing non-mainstream values and needs” (e.g. ethnic minority interest groups, religious and other ethical organisations). Social enterprises tend to act as advocates and mediators to support these groups. Obviously, it is helpful when social enterprises operate in regions characterised

65 http://www.healthktn.org/capabilitymap/london.html#3_regional_economy [Accessed: 24 January 2013].

66 http://www.ons.gov.uk/ons/rel/regional-trends/region-and-country-profiles/social-indicators/social-indicators---london.html [Accessed: 24 January 2013].

67 Ibidem.

by a culture which is open for minority interests and handling things in different ways (Buckingham et al., 2010).

Two further overrepresented areas in the sample are Scotland and Wales. In comparison with Greater London, these regions are characterised by low population density⁶⁸. In Scotland, social enterprises in the sample primarily operate in the community and social service sector (35%) as well as in the business activity sector (21%). In Wales, 23% of the sample also offers services in the community and social service sector and another majority of 23% are active in the wholesale and retail trade sector, e.g. repairing motor vehicles and personal household goods. It is conceivable that there is a positive correlation between social enterprise activities and areas of deprivation (Fyfe & Miligan, 2003). UK poverty reports show that 16% of the young adult population in Wales was unemployed in 2009 (at the time when SELUSI data was collected). Obviously, unemployment is a major risk factor for low income: Official statistics show that risk rises from 5% for a full-working family to over 60%

for a jobless one (Joseph Rowntree Foundation, 2009).

Similarly, unemployment is a major issue in Scotland. The effects of the economic crisis have caused a steady rise of unemployment. In the first half of 2010 the unemployment rate stood at 6.7 % – higher than in England. The last time unemployment in Scotland exceeded this value was in early 1996 (Joseph Rowntree Foundation, 2010). As a consequence, a majority of unemployed working-age adults is in poverty while child poverty rose to 26%, especially in non-working households. According to the Joseph Rowntree Foundation (2010), there are major gaps in the Scottish government’s anti-poverty programme, such as the provision of essential services to low-income and other disadvantaged households. The extent to which education and training institutions are focused on outcomes for those from poor and disadvantaged backgrounds, the living standards of unemployed, working-age adults and what working households need to allow them to escape from poverty is marked. If social needs are not taken care of by the public sector, the volume of needs not catered for grows.

Consequently, the likelihood of social enterprise activities in this context is higher.

The UK has started a civil society programme, the so called ‘Big Society’ agenda to foster community and voluntary organisations. The Big Society agenda supports people throughout the country to come together in order to find solutions to specific social problems so that they

68 A total of 8.4% of UK’s population lives in Scotland and 5% of UK’s total population lives in Wales. See:

http://epp.eurostat.ec.europa.eu/portal/page/portal/region_cities/regional_statistics/data/database [Accessed: 24 January 2013].

can improve their lives, for example by making it easier to run a charity, a social enterprise or a voluntary organisation, to get more resources into the sector and to strengthen its independence and resilience. Moreover, it aims at improving exchanges of communication between civil society organisations and the state. It is basically about shifting power from the central government to local communities. Community empowerment replaces top-down planning systems with decision-making power for neighbourhoods to decide the future of their area⁶⁹. In the coming years, this movement might influence the growth of social enterprise activities throughout the UK. Also, there are plans to increase the social investment market, e.g. in terms of increasing Big Society capital and enhancing social impact bonds⁷⁰. Figure 22 gives an overview of the geographical locations of the SELUSI survey within the UK.

69 http://www.cabinetoffice.gov.uk/content/big-society-overview [Accessed: 24 January 2013].

70 Ibidem.

Figure 22 Geographical location of the SELUSI dataset in the UK.