The UK’s social sector has once again been shut out of access to public finance that could significantly expand its impact, according to Jack Wakefield of Social Investment Business (SIB). Writing in response to the National Wealth Fund’s newly published strategy, Wakefield argues that charities and social enterprises are being excluded not by design, but by oversight, with real consequences for communities and government ambitions alike.
Despite repeated government commitments to partnership with civil society, Wakefield says the social economy continues to be overlooked when major funding mechanisms are put in place.
Context
Eighteen months into a Labour government, a wide range of strategies, missions, and funding initiatives have been announced, many aimed at long-neglected areas. These announcements are often accompanied by substantial financial commitments and are welcomed across the sector.
However, Wakefield says that while flagship projects attract attention, the social sector is frequently excluded from the largest public finance schemes, cost-saving measures, and subsidies. He argues that social enterprises and charities do not require bespoke funding streams, but equal access to the same finance available to other parts of the economy.
Fund
The most recent example cited is the National Wealth Fund (NWF), which last week launched its five-year strategy, Unlocking the UK’s Future. Established in 2024 and capitalised with £27.8bn, the NWF was designed as a public finance institution intended to crowd in private investment.
Under its new strategy, the NWF plans to narrow its focus, prioritise larger deal sizes, reduce investment in funds, and concentrate on a limited number of regions. According to Wakefield, these changes effectively exclude community organisations, charities, and social enterprises from accessing NWF finance.
SIB says it has spent the past year engaging with the NWF and identified strong alignment with government growth and clean energy missions. However, Wakefield argues that structural decisions in the new strategy have made NWF funding inaccessible to the social sector, suggesting that the impact economy was not fully considered in the fund’s assessment.
Pattern
Wakefield describes the NWF decision as part of a broader and recurring pattern. Other examples cited include the end of the Public Sector Decarbonisation Scheme, which could have supported retrofitting community buildings, and the extension of the Boiler Upgrade Scheme, which continued to exclude larger community spaces from support for heat pumps.
He also points to the most recent dormant assets settlement, which allocated a smaller share to social investment, and to last autumn’s Budget. While the Budget highlighted reductions in energy bills, charities were excluded from those measures and instead faced a new electricity levy linked to the Sizewell C nuclear power project.
Impact
The exclusion has tangible consequences. Wakefield notes that community buildings are among the least energy-efficient in the UK. Many social sector organisations are spending up to 50 percent of their budgets on utility costs, leaving fewer resources for frontline services.
Without access to the same retrofit finance available to industry, housing, or the public sector, these organisations are unable to improve efficiency at scale, despite delivering services aligned with government priorities.
Policy
The government’s Warm Homes Plan, published in January, is cited as another example of uncertainty. Eligibility criteria for the social sector were left unclear, and details on which non-domestic buildings could access the new Warm Homes Fund were limited.
However, Wakefield notes that comments from energy secretary Ed Miliband in a subsequent Commons debate suggested non-domestic buildings may be considered, leaving some scope for inclusion as policy details are developed.
Outlook
Wakefield acknowledges progress in other areas, including the creation of the Office for the Impact Economy, the Civil Society Covenant, and targeted capital programmes such as Pride in Place, Neighbourhood Health Centres, youth investment, and the Better Futures Fund.
However, he argues that these initiatives are restricted by theme or geography, while large-scale public finance remains inaccessible. He concludes that unless this pattern of exclusion is addressed, the social sector’s ability to support the government’s missions will remain constrained.
The message, Wakefield says, is straightforward: the social sector does not need preferential treatment, only fair access to public finance on the same terms as everyone else.
FAQs
What is the National Wealth Fund?
A UK public finance institution launched in 2024.
Why is the social sector concerned?
It is excluded from major public finance schemes.
How large is the National Wealth Fund?
It is capitalised with £27.8bn.
What impact does exclusion have on charities?
High costs and limited ability to invest or retrofit.
