'True extent of civil society’s economic contribution' revealed

Think tank PBE has almost doubled the “true extent of civil society’s economic contribution” to the UK.

Its researchers have added the value of 688mn volunteer labour hours to official statistics of charity’s worth for 2024.

This shifts civil society’s value during that year from 0.8% of Gross Value Added (GVA) to 1.5% and means charities are worth nearly £40bn to the country a year.

Since the pandemic charities are worth £2.1bn more to the UK economy, found the think thank. It also found that since 1997 civil society's value has increased by £25.8bn.

The recalculation puts charities’ economic contribution in line with the farming and car manufacturing industries combined, says PBE.

It adds that the official figure of 0.8% is likely to be an underestimate even without volunteer hours added, due to the “difficulty in identifying non-profits organisations in national accounts data” as they cover different sectors.

PBE wants to see a civil society satellite account created to capture charity work across sectors, such as care, justice and education.

“International comparisons suggest the underestimate could be substantial. In the 16 countries worldwide, that have created their own satellite accounts, civil society and volunteering was found to make up between 1.6% and 8.1% of GDP,” said the think tank.

PBE said: “By underestimating civil society’s economic contribution, the government risks underestimating the economic damage of failing to address the sector’s challenges.

“Much of the sector is under financial pressure, with organisations often pushed into unhelpful competition and short termism, all of which holds back productivity.”

It is calling for strategic investment in charities “as a driver of future growth”.

“The government needs to look beyond current official statistics to recognise the true extent of civil society’s economic contribution,” added the think tank.

“Doing so is a necessary first step to ensure civil society receives the attention it deserves to fulfil both its social and economic potential.”