Should There Be a New Funding Model for Sport and Physical Activity?
If physical activity creates value across society and the economy, why is the sector still surviving on scraps?
The case for sport and physical activity has rarely been stronger. Across the country, thousands of organisations are helping people become healthier, more confident and better connected. They are supporting children and young people, reducing loneliness, managing long-term health conditions, strengthening communities and creating routes into education, training and employment. Their work reaches far beyond sport.
It contributes to mental health, community safety, social care, youth justice, workforce productivity, regeneration, housing, green spaces and community cohesion. It sustains jobs, facilities, equipment providers and extensive local supply chains.
Yet much of the sector continues to operate through short-term grants, fragmented programmes and repeated funding applications. Organisations are expected to demonstrate lasting impact while living from one funding round to the next.
This raises a fundamental question: Do we need a new funding model for sport and physical activity?
We know the social value—but is the economic case being heard?
Sport England’s latest research estimates that community sport and physical activity generated £122.9 billion in social value in England during 2023/24.
This included:
£8 billion in direct net healthcare savings.
Almost £6 billion in productivity gains from a healthier workforce.
More than 3.3 million cases of chronic health conditions prevented.
£36.2 billion in sport-related economic activity.
Approximately £14 billion in tax revenue.
A combined economic and social return of £4.38 for every £1 invested.
The research also estimates that inequalities in activity levels carry an annual social cost of approximately £19.6 billion. In other words, even more value could be unlocked if people facing the greatest barriers became as active as the most active groups. Sport England’s social-value research
Alongside this, the Department for Culture, Media and Sport estimates that the wider sport sector directly contributed £63.2 billion to the UK economy in 2024 and supported approximately 1.3 million jobs. DCMS Sport Satellite Account
These are substantial figures. They show that sport and physical activity are not simply discretionary leisure activities or worthy community projects. They are part of the country’s economic and social infrastructure. But are we presenting this evidence to the right people, in the right language and with a sufficiently clear proposition?
What is a fit and healthy nation worth?
There may not yet be one definitive figure that captures the full value of a fit and healthy population to UK GDP—and that is precisely why further work may be required.
The existing evidence tells us a great deal about social value, healthcare savings, wellbeing, employment and economic activity. However, government investment decisions also require answers to more specific questions:
How much additional productivity could increased activity generate?
What would it mean for sickness absence and economic inactivity?
How much demand could be removed from primary care, hospitals and social care?
Could activity help more people with long-term conditions remain in or return to work?
What savings could be achieved across mental health, youth justice and community safety?
How does investment in facilities and active environments support regeneration, local supply chains and employment?
What economic value is created when physical activity is designed into housing developments, transport systems and green spaces?
Which department benefits financially—and over what period?
This is not about replacing social value. Social value remains essential because many of the most important outcomes cannot be reduced to a simple GDP figure.
It is about complementing social value with a sharper economic and fiscal case.
The sector may need an independently commissioned national study that follows investment through the system: from the initial spending on people, places and programmes to the savings, productivity gains, tax revenues and wider economic activity that follow.
Crucially, it should identify where those returns appear. An investment made through sport may create savings for the NHS, improve employment outcomes for the Department for Work and Pensions, contribute to regeneration priorities within the Ministry of Housing, Communities and Local Government, and support economic growth sought by HM Treasury.
At present, the organisation paying for an intervention is not always the organisation receiving the greatest financial benefit. That disconnect is one of the biggest obstacles to meaningful reform.
The problem may not be a lack of evidence.
The sector already produces a vast number of evaluations, impact reports and case studies. Many demonstrate excellent outcomes. The challenge is that the evidence is often fragmented.
Different organisations use different measures. Programmes are evaluated over different periods. National figures do not always translate easily into local business cases. Smaller organisations may be delivering extraordinary results without the resources or expertise to measure them convincingly.
Commissioning another report will only be worthwhile if it changes decisions.
The objective should therefore be bigger than producing another impressive headline number. It should be to create a shared investment framework that can be used by local authorities, NHS organisations, Active Partnerships, governing bodies, charities, community organisations and private-sector partners.
That framework could connect participation to outcomes valued by different parts of government, including:
Prevented healthcare and social-care costs.
Improved workforce participation and productivity.
Reduced sickness absence.
Better mental health and management of long-term conditions.
Improved educational engagement and employability.
Reductions in antisocial behaviour and youth offending.
Stronger local economies and supply chains.
Successful regeneration and housing developments.
Safer, greener and better-connected communities.
This would help move the conversation from “sport is good for people” to “this investment will deliver these outcomes, for these departments, within this timeframe.”
Does the funding model need to change?
If the benefits are shared across government and society, responsibility for funding them should also be shared.
Sport and physical activity cannot remain almost entirely dependent on the resources and priorities of one department, one national agency or a collection of short-term funds.
A future funding model could include:
Longer-term investment agreements tied to population and place-based outcomes.
Pooled budgets involving health, local government, employment, education and justice.
Commissioning based on prevention rather than waiting for ill health or crisis.
Greater use of social, institutional and responsible private investment.
Investment linked to housing, regeneration and infrastructure development.
Outcome-based agreements in which organisations benefiting from savings help fund delivery.
Core organisational funding alongside project funding, allowing trusted providers to build capacity.
Dedicated investment to help community organisations demonstrate their impact and become investment-ready.
This does not mean abandoning grants. Grants will remain essential, particularly where organisations work with communities facing the greatest inequalities and where a purely commercial model would be inappropriate.
It means building a more balanced system—one that combines grants, commissioning, public investment, social investment, commercial income and place-based partnerships.
Should the sector challenge Sport England?
Sport England has an essential leadership role and has produced some of the strongest evidence supporting investment in physical activity. Its focus on tackling inequalities is both important and necessary.
However, it is reasonable for the sector to ask whether the current system is capable of responding at the scale required.
That conversation should not simply be a challenge directed at Sport England. Nor should Sport England be expected to solve an issue that crosses almost every area of government.
The better question is whether Sport England can help convene and lead a broader national conversation—with the sector—about the future of investment.
Sector leaders could collectively ask:
Is the current funding system sufficiently ambitious?
Does it reward prevention, collaboration and long-term impact?
Are community organisations spending too much time competing for small, short-term grants?
Are we investing enough in the workforce and infrastructure required to deliver?
Is funding reaching the places and people where it could make the greatest difference?
How do we turn national evidence into investable local propositions?
How can funding be drawn from the departments that benefit from the outcomes?
These are legitimate questions. Asking them is not an attack on existing strategy; it is part of ensuring that strategy evolves with the scale of the national challenge.
New relationships and a new language.
The sector also needs to broaden the audience for its message. DCMS remains an important partner, but the case must also be heard by HM Treasury, the Department for Work and Pensions, the Department of Health and Social Care, the Ministry of Housing, Communities and Local Government, the Department for Education, the Ministry of Justice and those shaping national infrastructure and economic policy. Those relationships will require a different approach.
The sector must be able to speak about labour-market participation, productivity, fiscal savings, prevention, investable propositions, housing viability, public-service reform and regional growth—as well as participation and wellbeing.
This should not be left to individual organisations making isolated approaches. A coalition of sector bodies, delivery organisations, academics, investors and people with lived experience could develop a shared set of asks and take a coordinated proposition into government.
That proposition should be clear: Physical activity is not merely an outcome to be encouraged. It is an intervention capable of advancing several of the country’s most important priorities.
Is now the time?
The UK faces profound challenges: an ageing population, rising levels of long-term ill health, pressure on the NHS and social care, economic inactivity, poor mental health, financial pressure on local government and deep inequalities between communities.
Sport and physical activity cannot solve all these problems. Claims must be credible, outcomes must be measured, and the sector must avoid overstating its impact. But neither should its contribution be underestimated.
If every £1 invested can generate £4.38 in economic and social value, if activity prevents millions of cases of chronic ill health, and if the wider sport sector supports 1.3 million jobs, then treating physical activity as a marginal policy interest makes little economic sense.
The question is no longer whether sport and physical activity are valuable. The questions are who should invest, how that investment should be structured, how returns should be measured—and whether the sector is prepared to come together and make the case with one voice.
For too long, many organisations have been asked to deliver transformational outcomes while surviving on scraps.
It is time to stop treating sport and physical activity as a cost to be contained and start treating them as national assets in which we must invest.
These questions will sit at the heart of the Investing in Sports and Physical Activity Conference, taking place in Manchester on the 12th of November 2026.
The conference will bring together leaders from sport, health, local government, investment and community delivery to explore how we move from short-term funding to sustainable investment—and from compelling evidence to practical action.
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