Beyond the public purse
Unlocking private capital to speed Britain's national renewal
This article originally appeared in a collection of essays published in December 2025 by New Philanthropy Capital (NPC) in collaboration with the Impact Economy Collective.
At the height of the COVID-19 pandemic, the UK faced a huge challenge to house rough sleepers. The answer that emerged was not a traditional emergency grant, but a powerful act of partnership: the Everyone In Social Investment Pilot (SIP).
The UK Government put in a £25 million grant, but instead of spending it directly, the money was deployed as a strategic signal. That seed investment brought in £138 million from institutional investors, pension funds and charitable trusts. This pool of capital was used to acquire and refurbish 847 properties, providing safe, stable homes and essential support services. The initiative, which saw private capital take on the upfront risk, resulted in dramatically improved resident well-being and delivered an estimated £140 million in long-term savings for the taxpayer by reducing reliance on costly temporary accommodation.
Such a collaboration is not an anomaly; it is typical of an innovative, powerful way to deliver solutions for society’s most pressing needs. The model shows how purpose-driven organisations and capital can help central and local government move beyond the limits of short-term funding and directly address the barriers to economic inclusion and well-being.
Across the country and around the world, this approach is already at work. In the UK, innovative approaches to public service delivery are transforming youth justice, slashing reoffending rates from 72% down to 8%, while patient institutional capital is delivering major housebuilding projects and backing community energy schemes that accelerate the clean energy transition and deliver local revenue streams. These collaborations are unlocking the creative energies of significant purposeful businesses and social entrepreneurs, restoring agency to communities and delivering improvements at scale.
The impact economy in action: Unlocking capital through policy reform
The combined system is what we call the ‘Impact Economy’. It is the ecosystem of investors, philanthropists, and value-driven businesses that collectively stewards assets worth an estimated £106 billion.
£42 billion of this capital is already focused on key national goals, ranging from accelerating the net-zero transition to investing in early years support.
At the beginning of 2025, HM Treasury and DCMS brought together leaders from mainstream and impact finance, philanthropy, and government in the Social Impact Investment Advisory Group (SIIAG). Its mission was to advise on how to move beyond successful, ad-hoc projects and create a more productive national strategy for partnership.
The SIIAG’s final report confirms that in an era of constrained public finances, adopting a proactive ‘mobilisation mindset’ will be a key contributor to delivering outcomes and amplifying existing government funding. The recommendations focus on spreading a partnership approach across central and local government, building this mobilisation mindset into public service planning. Every new policy or service should start by asking the question: “How can public funds attract other resources to achieve shared goals?” This approach turns government money into a catalyst, rather than the sole source of funding. It also brings in outside expertise, innovation, local knowledge, and agile delivery capacity, helping share risk, strengthen accountability, and direct investment to the communities that need it most.
There are also ‘once and done’ regulatory changes that would remove outdated rules and practices unintentionally blocking capital flow. Targeted reforms to Gift Aid and wealth advice could unlock billions in philanthropy and advisory services for social impact. Clarifying the fiduciary duty of UK pension schemes would unlock an estimated £100 billion in patient, productive domestic investment. This is not about mandating investment but about removing legal ambiguity, providing schemes with the certainty that considering factors such as climate resilience and stable communities is clearly aligned with their members’ long-term financial interests.
A global race for impact capital
While the UK is an established global leader in impact finance, we are in an intense international race to attract a growing share of mobile global impact capital valued at £1.9 trillion.
Driven by foundations and high-net-worth individuals, this capital is actively seeking jurisdictions that offer a supportive regulatory environment and scalable project pipeline. Following significant reductions in global government spending on international development, the pressure on this purpose-driven private funding to fill critical gaps has never been higher. We cannot afford that fragmentd domestic policies and a complex regulatory landscape act as deterrents. The prize is not just domestic investment but securing the UK's position as the premier global financial hub for purpose-driven capital.
We have the capital – financial, intellectual and emotional – and the intent. By working together, the state, the private sector, and civil society can move beyond the limits of short-term funding cycles and become co-creators of a more inclusive and resilient UK. The real test now is turning ambition into action.
Mobilise for renewal
If you are a Place Leader ready to adopt the 'mobilisation mindset' described in this essay and activate the impact capital needed to transform your region, we have built the infrastructure to help you do it. Applications are opening for the inaugural Impact for Places Academy—a 12-month executive programme for leaders from established, emerging and aspiring strategic authorities and their partner organisations.