Impact Policy Tracker Policy

Inclusive Economy Unit



The Inclusive Economy Unit was established in 2016 within the UK's Department for Digital, Culture, Media and Sport (DCMS), evolving from previous government bodies focused on social enterprises and social investment. The unit builds on the Social Investment and Finance Team from the former Office for Civil Society, with the goal of strengthening the social investment market, supporting social impact bonds, expanding public service mutuals, and promoting mission-led businesses.



Highlights

  • A Decade of Institutional Evolution: The Inclusive Economy Unit (IEU) represents the culmination of over a decade of institutional evolution within the UK government to support social investment. It originated with the Social Enterprise Unit in 2001 under the Department of Trade and Industry, transitioned to the Office of the Third Sector in 2006 within the Cabinet Office, then to the Office for Civil Society in 2010, before becoming the IEU in 2016, relocated within the Department for Digital, Culture, Media and Sport (DCMS). This transition marked a significant shift in government perception, expanding the focus from solely supporting social sector organisations to encompassing a wider range of impact investment products.

  • Establishment of the Social Impact Investment Advisory Group: In early 2025, the UK government established the Social Impact Investment Advisory Group (SIIAG) to support the development of a new Social Impact Investment Vehicle. Reporting to both HM Treasury and DCMS, the group brings together impact investors, civil society representatives, and social investment experts. GSG Impact's National Partner in the UK, the Impact Investing Institute, plays a central role within the group, chairing a dedicated working group focused on identifying opportunity areas for impact capital. The mandate of the SIIAG includes advising on the design and implementation of investment vehicles aimed at addressing pressing social and environmental issues.

Government’s Role:
Market Facilitator


Country:
United Kingdom

Policy Type:
Dedicated Government Agencies and Offices

Year: 2016

Responsible Institution:
Department for Digital, Culture, Media and Sport (DCMS)

Additional information:
Inclusive Economy - UK

Dedicated Government Agencies and Offices

What are Dedicated Government Agencies Supporting the Impact Economy?

Governments seeking to foster impact economies -whether through social investment, support for social enterprises, or broader ecosystem development- have established dedicated agencies or units with a clear and sustained mandate. These bodies are typically responsible for implementing and overseeing programmes that drive impact investment and support the wider development of the impact economy.

While their specific focus may vary from country to country -from promoting social enterprises and cooperatives in South Korea to strengthening the social investment markets in the UK and New Zealand- these units enable coordination across different government offices. Beyond their operational roles, these agencies serve as policy anchors, ensuring continuity of the impact economy agenda beyond electoral cycles and enabling long-term public–private collaboration. They also act as conveners and knowledge hubs, facilitating cross-sector learning and coordination between government, civil society, and the private sector.