What steps should the government take to double the size of the co-operatives and mutuals sector?

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/

With growing scrutiny of AI in public services, social enterprise Beam has partnered with Nesta to gather public feedback on how its AI tool, Magic Notes, is being used in social care. Launched in 2023, Magic Notes uses AI to transcribe and summarise meeting notes for social workers and other frontline professionals. It was initially developed to support Beam’s own caseworkers who were struggling with administrative workload. Today, it is used by 65,000 practitioners across over 200 organisations, including local authorities, central government, health, social care and employability services.  The public consultation on Magic Notes was carried out through Nesta’s AI Social Readiness Advisory Label between September and October 2025. It involved 137 UK adults, including social care service users, who were asked to weigh the benefits and risks of using Magic Notes during 18 small-group deliberation sessions.  The findings showed strong public backing for Magic Notes, with 83% of participants feeling positive about social workers using the tool and 86% believing it would benefit social care as a whole. In particular, they valued the tool’s ability to free up social worker time, improve the quality of case notes, support job satisfaction and wellbeing, and enable better interactions with service users.  While participants supported the use of AI to reduce paperwork, they were clear that decisions about care must remain with people, not technology. Risks raised included accuracy, data privacy and over-reliance on technology, alongside a strong expectation that social workers review and approve all AI-generated summaries. However, after learning more about the tool and its safeguards, 74% said its benefits outweighed the risks. The consultation also highlighted deep dissatisfaction with the current social care system. Only 13% of participants said they were satisfied with how social care works today, reinforcing the scale of the challenge facing social care and the need for change. Kathy Peach, Director of the Centre for Collective Intelligence (CCI) at Nesta said:  “The government's AI Adoption plan is bound to fail unless there's public support for AI in public services. Our AI Social Readiness Advisory offers a way to build public confidence and trust, helping people to overcome initial concerns they may have about a tool. This is especially important in public service areas like social care that have a lot to gain from AI, but low public support for the use of AI might be stalling deployment.” Rachel Astall, Chief Customer Officer at Beam, said: “Responsible use of AI is central to how we build and deliver technology at Beam. We were encouraged to see that 86% of the public,  including people who access social care, felt that Magic Notes would benefit social care as a whole. The process surfaced thoughtful, practical suggestions for further improving the use of AI tools, and gave us a clear sense of what earns public confidence. We think it’s important that the public are consulted on how AI is used in public service delivery and we hope more organisations will take similar steps.” magicnotes.ai beam.org About the AI Social Readiness Advisory Label The Advisory Label is a structured public deliberation process that measures public confidence and trust in AI tools being used in the UK public sector. It involves an immersive, educational, and collaborative experience for citizens who weigh the benefits and risks of specific technologies to determine conditions for their trustworthy deployment.