Cabinet Office opens Office for the Impact Economy
If you work in a school, council, charity or local business, today’s news matters. The UK has created an Office for the Impact Economy inside the Cabinet Office, launched at No 10 Downing Street on 11 November 2025. It’s meant to be a single entry point for people and organisations who want to put money and expertise into projects that improve lives. Darren Jones, the Chief Secretary to the Prime Minister, will lead the work.
When we talk about the “impact economy”, we mean the mix of social investors, philanthropists and purpose‑led business activity that aims for measurable social outcomes alongside financial returns. A government‑convened advisory group estimates this pool at roughly £106 billion, with at least £42 billion already aligned to priorities such as affordable housing, jobs, education and clean energy. What this means: there is significant capital ready to move if programmes are clear and credible.
The new Office promises to cut through Whitehall admin, match funders with viable projects and work with the Office for Investment’s impact capital function so that large pools of money can reach local schemes when they’re needed. Officials say the goal is to make public money go further by bringing in private and philanthropic funding on top.
You’ll hear a few names. Darren Jones moved from the Treasury to become Chief Secretary to the Prime Minister in September, with James Murray stepping up as Chief Secretary to the Treasury. Culture Secretary Lisa Nandy is also in the driving seat, reflecting DCMS’s long‑running focus on social investment. Knowing who does what helps you follow decisions and hold people to account.
Why now? Last week the Social Impact Investment Advisory Group, chaired by Dame Elizabeth Corley, published its final report calling for visible leadership, cross‑government coordination and a clearer route for private and philanthropic capital to support public goals. Today’s announcement is the Government’s direct response.
If you’re teaching economics or public policy, this is a good moment to explore how ‘outcomes funds’ work. In plain English: investors or philanthropists put in money to run a service; government repays only if agreed results are achieved and independently verified. The idea is to shift risk away from taxpayers and keep everyone focused on results, though the evidence base is still developing and quality varies between projects. What this means: pay attention to the definitions of success and who verifies them.
One flagship example is the Better Futures Fund: £500 million over ten years to support up to 200,000 children and families. Ministers describe it as the largest fund of its kind worldwide, with programmes expected to target attendance, youth employment and family support. What this means: think early help-interventions designed to prevent more serious and costly problems later on.
On the private‑sector side, Legal & General has pledged £2 billion of impact investment by 2030 for affordable housing, regeneration, infrastructure and home retrofitting. That gives you a sense of scale for the sorts of projects the new Office hopes to connect with public priorities and local need.
So what could this mean where you live? When a local authority or NHS trust ties payments to real‑world improvements-say, sustained gains in attendance or health-outside funders may be more willing to finance early‑help work. The new Office says it will help design and broker these partnerships, acting as a front‑door for councils, charities and businesses that want to contribute.
We also need to read the fine print together. Outcomes‑based contracts can be complex and take time to design. Independent studies show many projects meet their targets, but comparisons with standard commissioning are still limited and robust evaluation really matters. In class or community meetings, ask who sets the outcomes, who checks the data and what happens if targets are missed.
What happens next? The Cabinet Office says the new team will be designed with sector partners over the coming months, alongside work with HM Treasury, DCMS and the Office for Investment. Given wider reforms that are reducing headcount across the department, we’ll be watching how much practical support the unit can offer councils and charities. What this means: capacity and follow‑through will decide whether today’s idea reaches classrooms, clinics and high streets.
For teachers, students and community organisers, this is a live case study in how we pay for prevention. Track how the Better Futures Fund defines success, watch for local pilots linked to the new Office, and compare claimed savings with independent evaluations. We’ll keep translating the jargon so you can bring clear, evidence‑based debate into your classroom or community group.