The Backbone of Britain Report: A Scottish Perspective
Posted: 17 December 2025, in Blog-News
The publication of Social Enterprise UK’s Backbone of Britain report offers a timely UK-wide snapshot of the sector at a moment of real economic pressure. Many of its themes will feel familiar to social enterprises across Scotland: resilience in the face of rising costs, a continued commitment to fair work, and a determination to support communities through difficult times. At the same time, the findings of Scotland’s own Social Enterprise Census 2024 allow us to add important nuance to the U.K. picture.
From a Scottish perspective, the story is less about confidence-led growth and more about resilience under strain, shaped by geography and scale. That’s not a criticism; it’s a reflection of what organisations are actually telling us. Our Census shows a sector that is mature and deeply embedded, with over 70% of social enterprises operating for more than a decade, but operating in increasingly tight conditions. While total income has continued to rise and trading now accounts for nearly three-quarters of sector income, surpluses have fallen sharply, and rising operating costs are now the single biggest barrier to growth for most organisations.
This matters because in Scotland, and especially in rural, island and remote communities, social enterprises are not evenly distributed or peripheral to local economies. They are more densely concentrated in these areas, often providing essential services and employment where few alternatives exist. For example, in the Highlands and Islands, South of Scotland and our rural areas, social enterprise isn’t just part of the economy; in many cases, it is the backbone holding local economies together. Any narrative about growth or resilience must therefore account for place, geography and the reality of delivering services at higher cost and lower scale.
The Scottish data also adds nuance to assumptions about the ease of transition from grant funding to trading or contracts, particularly in rural and island contexts where procurement access and market size create additional barriers. While our sector has made significant progress in trading income, the Census shows very limited engagement with public procurement, and a sharp drop-off in grant funding following the pandemic. For many organisations, this transition has been abrupt rather than strategic, increasing risk rather than reducing it.
Where the U.K. and Scottish evidence align strongly is on values. Social enterprises in Scotland continue to lead on fair work, inclusive governance and community accountability, often exceeding wider labour-market standards. That commitment has been maintained even as finances have tightened, but it should not be taken for granted.
Taken together, the two reports tell a complementary story. The U.K. picture highlights opportunity and ambition. The Scottish evidence grounds that ambition in the lived reality of place-based, community-rooted organisations working hard to stay afloat while delivering social value, and it reminds us that policy built on averages often misses what’s happening in specific places. As we look ahead to the next phase of the Social Enterprise Strategy, policy and investment, the message from Scotland is clear: if social enterprise is truly to sit at the heart of the economy, then investment, procurement practice and support must match the rhetoric; and must be shaped around the diversity of the sector, including the realities of rural and island deliver, rather than a one-size-fits-all model.
Written by Chris Martin, CEO, Social Enterprise Scotland, with special thanks to Mags McSporran, Head of Community Wealth Building, Highlands and Islands Enterprise, for her insight and contribution.