insights
New study reveals how cost-effective social ventures can be
New study reveals how cost-effective social ventures can be
Written by
Kevin Armstrong
Policy Lead
Take yourself briefly back to December 2019. Unemployment had fallen to its lowest level since 1975, and the Conservatives were in the process of winning another General Election after proposing to cut unemployment further.
They pledged to narrow the gap in the employment rate between disabled and non-disabled people in the UK, which was at a shocking 28.1 per cent. At the same time, UnLtd and the New Economics Foundation (NEF) were looking at this issue as part of a new study into the impact of social entrepreneurs. Our report is out today, and the findings are sadly needed even more by the Government now than they were before.
Many people have lost their jobs during this pandemic, but disproportionate numbers of disabled people have experienced this reality first-hand. The disability employment gap has already increased to 28.8 per cent, following a period last year when average redundancy rates for disabled people were 6.9 points higher than they were for the overall population. There are many reasons for this - including disability discrimination, inaccessible workplaces and a lack of support once in work – that are far from being fully addressed.
Disabled people may understandably fear that they will bear the brunt of the 500,000 extra job losses forecast this year.
Any action to address this worsening problem needs to be highly cost-effective as far as the Chancellor’s concerned. His recent Budget set out a plan to manage the country’s net debt by – amongst other things - increasing income tax receipts whilst cutting departmental spending. This leaves the Department for Work and Pensions (DWP) with a fundamental challenge: how can they use less core funding (in real terms) to support more people – especially disabled people - into work? Our new report with NEF provides answers.
We have completed the Social Cost Benefit Analysis (SCBA) study in partnership with NEF, looking at five social ventures, all of whom respond to the disability employment gap in different ways.
In case you haven’t come across a study like this before, it attempts to measure and quantify “social value” – the importance that people place on the changes they experience in their lives - alongside economic value - the revenue generated by the social venture.
We worked together with the ventures to map the stakeholders that benefitted from their work, and to highlight the outcomes of their services or interventions. This was used to develop data collection tools, which in turn fed into the SCBA modelling.
The modelling looked at the changes that were experienced by their clients, adjusted for the change that would have happened anyway, or was caused by factors other than the social venture itself, and then monetised the resulting social value using established financial proxies.
We found that social entrepreneurial solutions create significant social and economic value.
The study showed that the five social ventures we worked with generated a total of £19.8 million in social (£18.35 million) and economic value (£1.45 million) in a single year. There were also indications that beneficiaries were enjoying gains that would make them more likely to stay in the opportunities they were securing. This is likely to lead to further social value in the medium to long-term which is not captured in the figures above. The study recorded evidence of gains in:
Confidence (increases between 31 and 49 percentage points)
Feeling of usefulness (increases between 26 and 53 percentage points)
Emotional Wellbeing (increases between 15 and 52 percentage points)
But you may be asking – how does the social and economic value compare to the cost of the social ventures’ work? Well, the social ventures achieved an impressive cost-benefit ratio in all cases, ranging from 1.8:1 to 116:1.
It’s evident that social entrepreneurs can deliver extremely good value for tax-payers’ money, if the Government chooses to invest in them.
The introduction of social value procurement should open up opportunities to bid for public sector contracts, and we hope the evaluation methods used in our study can be adapted by many other social entrepreneurs to help them win future bids. We would also love to see more social ventures winning recognition for their impactful work, just as Diversity and Ability did after taking part in our study.
The forthcoming publication of a National Disability Strategy will be an opportunity for the Government to truly harness social entrepreneurs in closing the disability employment gap. Wider social impact is within reach if outstanding proposals are adopted, especially on social investment.
As the country comes out of a pandemic, this new evidence shows that the Government should grasp the positive social and economic returns that social entrepreneurs can bring and back their impactful work.
Please take a look at this important report, as well as our summary, and contact our research team if you have any queries.