Without civil society, the UK would be an unrecognisable and an undoubtably worse place to live. The organisations that make up the sector and the people working within them are fundamental to maintaining and improving our quality of life. While the hard work of the millions of volunteers across the UK is the bedrock upon which much of what we value in life is built. 

By Anoushka Kenley and Jack Larkham

Yet when it comes to the economic contribution of these organisations and individuals, we know very little, this is despite the fact that much of the data that we could use to quantify it already exists. This lack of measurement contributes to a reinforcing cycle which leaves the sector unable to deliver its true potential. 

Without analysis and reporting of this data, the economic contribution of civil society and volunteering remains undervalued. Subsequently they (and their insight, knowledge and expertise) are overlooked when it comes to decision-making and as a consequence are both under-utilised in terms of policy making and under-funded when it comes to resource allocation. 

In this context there has been little appetite among those with the power to help the sector to break out of this cycle. A sector that is undervalued, overlooked, under-utilised and under-funded is one that can never deliver on its potential. 

But there are encouraging signs that this could change. A report by Pro Bono Economics (PBE) and the Economic Statistics Centre of Excellence (ESCoE), commissioned by the Department for Culture, Media and Sport (DCMS), has examined the practical question of how the economic contribution of civil society can be properly measured and reported. 

This is important. At a fundamental level, it indicates that the government does, in some way, recognise the economic significance of civil society. And if the government eventually goes ahead with the report’s recommendations, it would significantly increase the quantity and quality of data about the sector. While this won’t be a silver bullet to solve all of the sector’s problems, it has the potential to be the first step in breaking out of the cycle that holds civil society back. .  

National accounts tell us a lot of things about the economy – but very little about civil society’s part in it

National accounts are the set of official government statistics that describe the economy. They tell us how many people are employed and how many goods and services are produced, as well as which industries are growing and where they are based. They provide both a high-level picture of the economy and a lot of granular detail. For example, the national accounts tell us that in quarter two of this year, UK output fell by 0.1% overall, but within that water supply and sewerage grew by 2.2%. Yet they do not tell us anything about the group of non-profit, non-government organisations that make up civil society. 

In 2019, PBE founder Andy Haldane, then Chief Economist at the Bank of England, described civil society as “invisible” within national accounts. Compared to other industries like manufacturing, agriculture, or hospitability, civil society – the group of organisations that is independent of government and puts purpose before profit – is impossible to identify as a coherent whole in the government’s official statistics. While the national accounts tell us that 31,000 people are employed in agriculture, fishing and forestry in Yorkshire and the Humber, they don’t tell us how many people civil society organisations employ, or how much they contribute to the economy. 

Perhaps most importantly, volunteering – an activity that generates tens of billions of pounds worth of value to the economy every year – is not included in the national accounts at all. It is also not accounted for in the UK’s GDP. 

This is frustrating for two reasons: firstly, because it is much harder to make the case for the economic importance of civil society without having hard numbers to prove it (especially when those numbers are easily available for other industries). Secondly, because much of the data is already there. Civil society organisations are captured in all those big government statistics – but they are difficult to identify as independent non-profit organisations, and to separate from information about organisations in other sectors.  

A civil society satellite account would change that 

A satellite account is a set of data tables linked to, but distinct from, the national accounts. They tell us about things that are important features of the economy but are not traditionally reported. They are produced by the ONS and are comparable in quality to other data that forms the national accounts.  

For example, there is already a satellite account that tells us how much tourism contributes to the economy each year. Similar to civil society, tourism is not itself an ‘industry’ in the parlance of national accounts. It is spread across industries which are defined by the organisations’ activities, such as retail, hospitality or transport. This means extra work is needed to work out exactly what economic value tourism creates.  

Like tourism, civil society organisations are already part of the national accounts. The problem is identifying them. To be more precise: while some non-profit organisations can be identified in the national accounts, any organisation that generates more than 50% of its income through trading (e.g. selling tickets, providing contracted services) is lumped together with businesses. And, as above, volunteering time is not counted at all. This is explained at length in PBE’s research on the need for a civil society satellite account for the Law Family Commission on Civil Society.  

To resolve this, countries globally have started identifying the economic contribution of their civil society sectors separately by introducing civil society satellite accounts. The UK is now thinking seriously about whether it can do the same. 

Finding civil society organisations within existing datasets is not straightforward, but it is possible 

PBE’s work with ESCoE has taken a detailed, practical look at how a civil society satellite account could be delivered. This is not a straightforward task. The ONS will need to identify hundreds of thousands of civil society organisations within government datasets that cover millions. And while some civil society organisations, such as trade unions, sit neatly in registers that mean they are (relatively) easy to find, many do not. Even agreeing which sort of organisations should be included in a civil society satellite account is a complicated question that people have differing views on.  

Nonetheless, the conclusion of the report is that a first cut of a satellite account could be produced within two years, with appropriate funding. Producing it as a modular set of data, where different subsectors could be included or excluded depending on what information the user needs would maximise the usefulness of a civil society satellite account.  

Delivering the recommendations of the report will require an investment of time and analytic resources from government. But doing so would demonstrate the government is, at last, serious about better understanding the economic contribution of civil society.