‘The UK’s 'impact economy' definition must put ownership first’

Who owns the wealth we call “impact” and who decides how it’s used? The headline figure from New Philanthropy Capital’s recent ‘Impact UK’ report sizes the UK’s impact economy at £428bn GVA, roughly 15% of GDP, which rightly grabbed attention and debate. 

• Read more: ‘Impact economy’ contributes 15% to UK GDP – new estimate

But numbers are not neutral, and boundaries are political. The government’s new Office for the Impact Economy, housed in the Cabinet Office and led by the chief secretary to the prime minister, creates a single front door for impact investors and philanthropists to shape public facing activity. That power needs guardrails.

Why ownership matters

Decisions about ownership determine whether impact closes or widens inequality. Purpose-led private firms, including many B Corps, remain legally bound to shareholder duties under UK company law; such certifications inspire more ethical business behaviour but do not change legal obligations. 

• Read more: Better Business Act campaigners urge UK parliament to halt relentless pursuit of shareholder profits

By contrast, social enterprises, cooperatives and employee-owned firms embed mission in ownership. Social Enterprise UK estimates around £78bn turnover and 2.3m jobs in the sector, showing these models are economically significant and community rooted. Evidence also warns against uncritical marketisation: research (such as this from the LSE) links outsourcing of health services to private providers with worse treatable mortality outcomes in England.

Five practical things government should do now

How influential NPC’s report will be to the activities of the Office for the Impact Economy remains to be seen, but it’s notable the report lists contributions from members of the Social Impact Investment Advisory Group, which recommended the office be established. 

• Read more: NPC’s ‘impact economy’ definition: a ‘missed opportunity’ or chance to collaborate better?

The Office for the Impact Economy should certainly not accept the NPC’s findings without scrutiny, and the following recommendations may help the office to achieve its objective of harnessing and growing purpose-driven businesses in support of national renewal.

• Broaden the definition: explicitly include cooperatives, mutuals and employee-owned firms in the impact economy to avoid privileging investor-compatible models.
• Measure distribution, not just GVA: require reporting on pay ratios, profit share, community reinvestment and local procurement, so impact is judged by who benefits economically too and at what cost.
• Condition access to the Office for the Impact Economy: prioritise democratically-owned models for public contracts and blended finance to steer public funds toward mission-locked organisations.
• Create patient, mission aligned finance: regional social investment opportunities, loan guarantee schemes, social purpose real estate investment trusts, etc, can offer long-term, low-cost capital to community owned enterprises.
• Embed ownership tests in procurement: give social value weight to who owns as well as what is delivered, shifting incentives towards socially and mutually owned. Learn from the Community Wealth Building (Scotland) Act 2026 which gives statutory footing to local wealth retention and democratic economic practice.

The prize

We can build an impact economy that truly shifts power and builds shared prosperity, or we can relabel marketisation and call it progress. 

Let’s be practical but principled: put ownership at the centre of policy, measure who benefits, and fund the institutions that keep wealth local. 

That’s how you fix Britain; not with better PR for private capital, but with economic models that root wealth locally, enabling communities to build a prosperous and flourishing economy, sparking renewal in neighbourhoods and reseeding hope and connection in communities nationwide.

Peter Holbrook (pictured top) is group CEO of the Social Enterprise Coalition CIC, the umbrella organisation for Social Enterprise UK, Home of Social Enterprise, Telos Impact, Expert Impact Charity and Expert Impact Speakers.