The Third Way and the third sector: New Labour's economic policy and the social economy

This paper reviews the relationship between Labour's economic policy and the third sector. Since 1997, the third sector has received significant government support and has gradually moved from the economic periphery towards the centre such that it is now instrumental in the delivery of a range of government policies. It operates alongside both the private and public sectors in delivering employment, education, health and social care, housing and environmental policies. The impact of this has been seen in measures of social exclusion, poverty, the environment, social capital, as well as GDP and employment. Future policies should strive to maintain and develop the distinctive capabilities of third sector organisations and the balance between economic, social and environmental objectives.