The nature of the voluntary sector’s finances and the available data make it difficult to quantify the sector’s value to the wider economy. The sector’s contribution can be measured in terms of its spending, the people it employs or the contribution that volunteers make.

Economic value as measured by GVA

The contribution of different sectors to the economy is measured by the Office for National Statistics (ONS) using GVA (gross value added), which is an estimate of production or output, similar to Gross domestic product (GDP)[1]. Voluntary organisations are included in ONS estimates as part of ‘Non Profit Institutions Serving Households’ (NPISH) but NPISH is not synonymous with the voluntary sector. NCVO therefore developed a method to estimate the voluntary sector’s GVA, in consultation with the ONS, in the early 2000s; although it has its limitations, we judge it provides the best indication of the economic value of the sector.

Method for calculating voluntary sector GVA
£bn
Staff costs
15.7
Plus
Expenditure on goods and services
21.2
Minus
Income from sales of goods and services
-24.8
Equals
Total GVA estimate

12.2
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  • In 2014/15 we estimate that the voluntary sector contributed £12.2bn to the UK economy, around 0.66% of total GDP. This is similar to 2013/14.
  • To put this amount in context, it can be helpful to compare it to the GDP of a small country and to other sectors of the UK economy.
  • In relation to other countries, the GVA of the voluntary sector in 2014/15 (£12.2bn) is closest to the GDP of Cyprus (£12bn, ranked 107 out of 195 countries normally compared)[2]. In last year’s Almanac the GVA of the voluntary sector was closest to the GDP of Iceland, which this year has a GDP of £10.2bn and a slightly lower ranking (111 out of 195).
  • In relation to industrial sectors, the size and proportion of the GVA voluntary sector contribution to the UK economy in 2014/15, is closest to the 2015 GVA of the civil engineering sector (£15.7bn) and the mining and quarrying sector (£13.3bn)[3]. As a proportion of UK GDP, voluntary sector GVA has remained relatively consistent with time, averaging between 0.7% and 0.8%, with a peak of 0.84% in 2008/09. There are indications of a small continuing decrease, perhaps suggesting that the sector is growing more slowly than the overall economy.
Voluntary sector contribution to the UK economy as % of total GDP
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Workforce

  • 853,000 people were employed in the voluntary sector in the UK in June 2016, equivalent to 2.7% of the UK workforce, the same proportion as in June 2015.
  • By comparison, the public sector employed 7.1 million staff and the private sector employed nearly 23.5 million staff.
  • The NHS, which is the single largest employer in the UK, employs twice as many people (1,480,000). Tesco employs about half as many people (476,000).
  • Voluntary sector employees work mostly for small organisations; 47% work at small organisations of fewer than 25 employees whilst only 6% work for large organisations of more than 500 employees. By comparison, 36% of public sector and 13% of private sector workers work for organisations of over 500 employees.

Volunteering

  • An estimated 14.2 million people formally volunteered at least once a month in 2015/16.
  • It is difficult to estimate the economic value of the sector’s volunteers[4]. The most recent figures from ONS, for 2015, estimated the value of voluntary activity in the UK to be £22.6bn, approximately 1.2% of GDP [5]

References

1
It is important to note that contribution to GDP or GVA is not simply turnover, a mistake frequently made
2
Gross Domestic Product ranking table 2015, accessed Apr 12th
3
Civil engineering and Mining and quarrying GVA from the ONS
4
For a discussion of some of the issues, see this NCVO blog
5
ONS. Changes in the value and division of unpaid volunteering in the UK: 2000 to 2015. See the ONS website
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UK Civil Society Almanac 2017 / The Voluntary Sector /Sector overview

Published: 08-05-2017 / Tagged:

https://data.ncvo.org.uk/a/almanac17/economic-value-3/