How the Growth Fund plugged the finance gap for social enterprises

The Labour government’s 2024 election manifesto contained a commitment to ‘double the size’ of the co-operatives and mutuals sector. Following on from this, in November of 2025, the Department for Business and Trade launched a call for evidence on business support for co-operatives and non-financial mutuals. This was an opportunity for us to feed directly into government thinking around diverse business models, and to ensure gaps in support provision, finance, and understanding are presented to and acknowledged by the Department. Our consultation response focuses on the immense impact made by social enterprises, many of which are co-operatives, mutuals and employee-owned - the way they are driving economic growth, reducing inequalities, and creating better working environments. Particular attention is given to the vital role these types of organisations play within the NHS and the transformative impact they are having on patient care and staff wellbeing while retaining financial responsibility. We also look in depth at the challenges faced by these businesses when it comes to accessing finance and support and the gaps in understanding which are holding them back. Here are some of the key points mentioned in our response: Economic and social impact Sector Scale: Mission-led businesses (co-ops, mutuals, and social enterprises) make up 5% of UK businesses, accounting for 10% of GDP and creating around 4 million jobs. Growth Potential: If the proportion of social enterprises and co-ops within the UK economy grew from 3% to 12% of GDP, it would increase UK investment by £14 billion. If all businesses were mission-led, UK GDP could be 7% larger. Job creation: Consumer co-operatives create more jobs by turnover than average enterprises in the UK. Labour productivity in worker co-operatives is around 8-12% higher than comparable traditional firms. Resilience: 82% of co-operative start-ups are trading after 5 years, compared with just 40% of UK companies overall. Public services and healthcare NHS contribution: The 60 largest healthcare social enterprises, most of which are classified as public service mutuals, deliver £2.4 billion in services annually, covering a third of community health services and providing urgent care for two-thirds of the population. Quality: These organisations are more likely to receive "Good" or "Outstanding" CQC ratings than traditional NHS trusts. Efficiency: Research shows that social enterprises are leaner and more efficient than NHS Community Trusts, with lower staff sickness rates, lower spend on bank and agency staff, and lower overheads. Diversity and inclusion Leadership: 24% of the top 100 co-ops are led by women, compared to just 9% of the FTSE 100. Pay equity: The gender pay gap in co-ops is 7.5%, significantly lower than the UK average of 12%. Workforce: Around 65% of the social enterprise workforce is female, and 22% are from minoritised ethnicity backgrounds. Barriers to entry and growth Awareness gap: There is a lack of understanding of co-operative and mutual models among business advisors, investors, and the general public. This translates into poor, unsuitable advice for those wishing to start or scale co-operative business models. Financial hurdles: 68% of social enterprises struggle to access grant funding; many find traditional bank finance (like overdrafts) difficult to secure because banks don't understand their risk profiles. Lack of awareness in government: Public service mutuals are often "forgotten" in government decisions around funding and support, creating unnecessary strains on finances, capacity, and services. For example, they were initially excluded from pandemic bonuses and National Insurance relief granted to public sector counterparts. This creates perverse incentives, discouraging the type of organisations that consistently deliver the kind of care the NHS 10-year plan is seeking to deliver. Recommendations Joined-up government working: Despite considerable cross-party support and the ongoing growth of diverse businesses themselves, government action has been slow and in need of joined-up strategy across key departments. The Government has committed to doubling the size of the co-operative and mutual economy, and there is now also an Office for the Impact Economy. The Government must recognise that these terms overlap, and that policy decisions must take into account co-operative, social enterprise, and mutual models of ownership, and how these can coexist. Legal and fiscal frameworks: Ensure legal and fiscal frameworks do not, even unintentionally, discriminate against diverse businesses. Bolster the capacity of regulators like Companies House to remove barriers for co-operatives wanting to start or scale Routes to market and the public purse: The Procurement Act consultation should lead to joined-up integration of support for VCSEs in public procurement, and strengthening the Social Value Act can expand public/social partnerships and secure greater value for money from existing public budgets. Access to finance: DBT and DCMS, through ensuring their existing programmes are open to diverse businesses, can expand support for start-ups, growth, and replication, and enterprise development. Sector leads and champions: Diverse business model sector leads and champions need to be better embedded across government departments to strengthen awareness and coordination in order to highlight and build upon best practice. CLICK HERE TO READ OUR FULL RESPONSE TO THE CONSULTATION

By Peter Holbrook - Group Chief Executive, Social Enterprise UK New Philanthropy Capital's Impact UK report has sparked an important national conversation. Its headline figure - £428bn of gross value added, roughly 15% of GDP -gives the impact economy the visibility and scale that policymakers and markets understand. This is valuable work that should be celebrated. But the boundary-drawing behind that number deserves closer scrutiny. How we define the impact economy shapes who gets seen, who gets financed, and ultimately, who benefits from growth. And right now, that definition risks privileging investor-compatible models over democratic ownership structures - in ways that contradict the report's own stated principles. The definitional problem NPC defines the impact economy as "an ecosystem of individuals, organisations, and capital intending to prioritise public benefit over private gain." This is a clear, useful definition. The puzzle is how it's been applied. NPC's researchers have clarified that they included co-operatives and employee-owned businesses deemed "impact-led" based on intentionality, rather than including them by default. Meanwhile, many B Corps - private companies legally structured to prioritise shareholder interests - were included. Consider the contradiction: under Companies Act s172, directors must promote the success of the company for the benefit of its members (shareholders). The Supreme Court forcefully reiterated this in Sequana. B Corp certification raises standards and transparency, but it cannot override fiduciary duty. When profit and purpose collide, shareholder primacy still frames the decision. Many B Corps are excellent businesses, but structurally they remain oriented toward private gain, not public benefit. By contrast, worker co-operatives and employee-owned businesses are legally structured to share surplus among workers, not extract it to external shareholders. Community benefit societies anchor assets for public benefit. Community Interest Companies have asset locks preventing private extraction. These structures embody "public benefit over private gain" by design, not aspiration. So why must democratic ownership models prove their impact credentials while investor-owned models are accepted on stated intent? This double standard matters because it shapes the entire policy architecture being built around the impact economy. Policy architecture The Government's new Office for the Impact Economy represents a significant opportunity. As a central 'front door' for philanthropists, impact investors, and purpose-led businesses, it can accelerate collaboration and unlock capital for communities. But architecture shapes outcomes. A front door designed primarily around investment will naturally privilege investable vehicles - conventional companies and project structures that fit standard risk-return profiles - over democratic ownership forms that don't. We've seen this pattern before: well-intentioned policies that inadvertently reinforce existing power structures because the infrastructure favours certain models. This isn't inevitable. With deliberate design choices, the Office for the Impact Economy could become a powerful engine for public benefit. But that requires us to be explicit about ownership structures from the start. What the evidence shows At Social Enterprise UK, our State of Social Enterprise research shows social enterprises deliver around £78bn in turnover and approximately 2.3 million jobs, paying the real Living Wage far more than conventional businesses while reinvesting surpluses in their missions. Yet many face constrained access to finance precisely because their ownership structures don't fit conventional investment models. UK research on employee-owned businesses shows strong productivity, resilience during economic downturns, and better outcomes across worker wellbeing and retention. Worker co-operatives directly share surplus and keep enterprises rooted locally. Community benefit societies anchor assets in places. These models don't just claim to prioritise public benefit - they're legally required to do so. A path forward Three practical steps would strengthen the framework and help the Office for the Impact Economy deliver on its promise of genuinely prioritising public benefit: First, align definitions with principles. NPC's next edition should fully include co-operatives, employee ownership trusts, mutuals, and credit unions in core figures - or publish supplementary analysis this year. If the definition is "public benefit over private gain," then structures legally designed to deliver this should be counted by default, not case-by-case. Second, measure what matters. GVA tells us about economic activity; it doesn't tell us who benefits. Add metrics that reveal whether public benefit is actually prioritised: worker profit-share, pay ratios, community asset growth, employee governance rights. Break these down by ownership model so we can see which structures deliver on the stated definition. Third, create a Democratic Ownership Window within the Office for the Impact Economy. This could include: an SME succession facility supporting employee-ownership conversions; a community shares match fund for local asset purchases; and procurement scoring that rewards ownership structures designed for public benefit. Make it as accessible to support democratic ownership as it is for impact investment vehicles. The broader context We should be candid about history. The UK has spent decades marketising public services through outsourcing. The empirical record includes evidence linking certain forms of for-profit health outsourcing to worse outcomes. The impact economy will operate within that legacy. This doesn't mean all private provision is harmful or all democratic ownership is virtuous. It means when we create new mechanisms for capital to engage with public purpose, design matters enormously. If we want the impact economy to genuinely prioritise public benefit over private gain - as NPC's definition promises - we must make deliberate design choices about ownership. An invitation NPC has catalysed a timely conversation. The Office for the Impact Economy signals genuine government commitment. These are opportunities we should embrace. But if the impact economy is truly about prioritising public benefit over private gain, ownership structures need to be central. Not as an afterthought, but as a core dimension of impact itself. This means counting - and backing - the enterprises that are legally designed to serve public benefit, not just those that aspire to it. The impact economy has a politics, whether we acknowledge it or not. The question is whether that politics entrenches conventional ownership patterns, or opens pathways to genuinely different structures. The choices we make now - in our definitions, our measurements, and our policies - will determine which future we build.

Exceptional Individuals is a social enterprise supporting neurodivergent people, including those with ADHD, autism, dyslexia and dyspraxia, into and within work. The organisation was founded 10 years ago by Matt Boyd, drawing on his own lived experience of unemployment and navigating work as a neurodivergent person. What began with the simple aim of supporting just one other person facing similar barriers has grown into a national organisation delivering impact at scale. Today, Exceptional Individuals is a neurodivergent-led organisation, with around 90% of its team identifying as neurodivergent. This lived experience sits at the heart of its work, shaping services that are practical, trusted and rooted in real-world understanding. Over the past year alone, more than 2 million people accessed the Exceptional Individuals website, reflecting growing demand for clear, accessible information about neurodiversity and employment. Around 5,000 people each day use the organisation’s online tools and resources to better understand neurodivergent traits and characteristics, often representing a first step towards self-understanding, workplace support or career progression. Exceptional Individuals supports individuals directly through workplace needs assessments, coaching and in-work support, helping neurodivergent people stay in employment, progress in their careers and avoid unnecessary job loss. This work not only improves individual outcomes, but also reduces the wider social and economic costs associated with exclusion from work. Alongside individual support, the organisation works extensively with corporate employers, delivering neurodiversity training, consultancy and practical guidance. This includes supporting line managers, HR teams and senior leaders to better understand neurodivergent talent, implement reasonable adjustments and embed inclusive practice across recruitment, retention and progression. By working with employers, Exceptional Individuals helps create environments where neurodivergent people can thrive rather than simply cope. As demand for neurodiversity support continues to grow, Exceptional Individuals is also expanding its work to train front-line staff in other charities and social enterprises, building sector-wide capacity and improving support for neurodivergent people across services. From its beginnings supporting a single individual, Exceptional Individuals has now supported thousands of neurodivergent people and worked with organisations across the UK, demonstrating the social and economic value of inclusive employment. Useful links To book a Workplace Needs Assessment or access in-work support: exceptionalindividuals.com/candidates/workplace-needs-assessments/ To explore neurodiversity resources and quizzes, including support for individuals and those wondering if they may have neurodivergent traits: exceptionalindividuals.com/candidates/neurodiversity-resources/neurodiversity-quizzes/ To find out more about Exceptional Individuals and access further resources: exceptionalindividuals.com/