Policy paper

Executive Summary - Final report of the Social Impact Investment Advisory Group

Updated 3 November 2025

Mobilising the impact economy as partners in national renewal

1. Executive Summary

Government’s Plan for Change sets out an ambitious agenda for a decade of national renewal. The Civil Society Covenant and Pride in Place Strategy commit to deep collaboration between government, civil society and the impact economy, and places as a means to deliver on that ambition, recognising that lasting renewal must be built with, not just for, communities. This report offers a practical roadmap for how government can put that commitment into practice – steps for creating a more strategic partnership with the impact economy to drive inclusive growth across the UK.

The impact economy is a diverse ecosystem of purposeful organisations and capital with a shared aim of delivering a strong economy in which everyone benefits. It delivers public services embedded in communities and responsive to local needs; often operates where there are market failures and where traditional businesses and investment models don’t work; and tackles the barriers that inhibit economic growth, from skills gaps and poor health to a lack of affordable housing and climate resilience. Impact capital is the financial engine of this sector, comprising philanthropic capital, social investment and institutional impact investment. We estimate that it represents a combined £106 billion in assets, of which at least £42 billion directly contributes to national priorities, including affordable housing, good jobs, educational opportunities, and clean energy.

In an economic environment where every pound of public funding needs to work harder, a more strategic approach to partnership could harness and grow the impact economy in support of national renewal. Central to this is adopting a mobilisation mindset: using public capital and a co-design and delivery approach to attract investment and other resources, share delivery, and scale solutions which improve real outcomes for people.

We recommend the following as key steps government can take to implement this shift.

Pillar 1: Organising to mobilise and support the impact economy

i. Establish sustained and visible leadership at ministerial and senior civil service levels to champion the impact economy agenda, drive cross-government action, and signal long-term commitment.

Recommendations include appointing dedicated ministerial responsibility, forming a cross-Whitehall leadership group, and integrating Non-Executive Director representatives across departments. Additionally, we suggest creating an independent Impact Economy Advisory Group and institutionalising the Civil Society and Impact Economy Summit as an annual event to ensure continued sector engagement, expert guidance, and public visibility.

ii. Create an Office for the Impact Economy: a director-led and well-resourced hub within government to provide the strategic leadership, coordination, and relationship management needed to embed partnership with the impact economy across.

Pillar 2: Embedding the mobilisation mindset

iii. Embed a match first / leverage approach as a core principle of policy design. This could be achieved through changes to strategic policy and delivery frameworks, including business cases, procurement processes, Local Growth Plans, and the mandates of Public Finance Institutions. We recommend it’s supported by guidance, training and enabling infrastructure to equip officials in central and local government with the necessary skills and tools, including a Local Investment Enablement Facility (LIEF) to share knowledge, provide practical help and reduce barriers to participation at the local level.

iv. Accelerate momentum through flagship projects, by taking forward initiatives that demonstrate the model in action. We provide five examples of opportunities that are well-aligned with existing impact capital and government goals; offer diverse mechanisms, including philanthropy, blended finance, and outcomes approaches; and could be taken forward quickly to improve outcomes in communities across the UK. Looking forward, Government could use the next Spending Review to realise the benefits of working with the impact economy, co-designing interventions with impact economy stakeholders in the coming months to announce on that timeframe or before.

Pillar 3: Unlocking resources and participation at scale

v. Implement targeted reforms to unlock capital and corporate resources. Clarify fiduciary duties for pension schemes, modernise Gift Aid and legacy giving rules, integrate philanthropy and impact investment into wealth advice, and incentivise corporate purpose and giving.

As the Social Impact Investment Advisory Group, we were pleased to advise on the recently announced £500 million Better Futures Fund – a significant example of partnership with the impact economy. This landmark fund will support vulnerable children and families through collaboration between government, communities, and impact investors. As the largest social outcomes partnership fund in the world, it also signals global leadership in the field of impact capital and public service reform. To maintain momentum and credibility, we recommend that government act swiftly and visibly to operationalise the Fund, reducing delay, ambiguity, or communication gaps that risk eroding confidence.

We also acknowledge that partnership requires ongoing commitment from both sides. We would be pleased to advise on the establishment of the independent Impact Economy Advisory Group and propose that the annual Civil Society and Impact Economy Summit is a joint endeavour, providing opportunity to deepen relationships, track and share progress, and maintain momentum. Finally, we recognise that mutual accountability and continued learning will be essential to achieving lasting impact and therefore suggest an independent review of progress against these recommendations in twelve months’ time.

The government has signalled a clear intent to work differently. This report builds on that momentum, offering a roadmap to embed partnership as the norm, steps to scale what works, and ‘once and done’ changes to create a more enabling system. It invites government to move from ad-hoc collaboration to a deliberate, system-wide approach that empowers the impact economy as co-creators of renewal.

Dame Elizabeth Corley

Chair of the Social Impact Investment Advisory Group