United Kingdom introduces a £500 million fund dedicated to assisting disadvantaged children through social outcomes.
The UK government has announced the launch of a groundbreaking social investment fund, the Better Futures Fund, aimed at enhancing the lives and opportunities of up to 200,000 vulnerable children and their families across the country.
The ten-year, £500 million initiative, unveiled by the UK chancellor Rachel Reeves at an event hosted by AllChild in a school in Wigan, north-west England, will focus on key issues such as school attendance and behaviour, youth mental health, reducing youth crime, and supporting youth employment.
The Better Futures Fund is designed to break down barriers to opportunity for vulnerable children and young people, boost pupil achievement and reduce school exclusions, provide support to children struggling with mental health, crime, or social exclusion, help children avoid a life of crime, and improve youth employment prospects.
The fund uses social impact bonds, also known as social outcomes partnerships, where private investors finance projects and are repaid by the government if agreed social outcomes are met. The government funding of £500 million will be matched by another £500 million from local government, social investors, and philanthropists, making it a £1 billion initiative in total. This makes it expected to be the world’s largest social outcomes fund of its kind.
The fund has been shaped by a Social Impact Advisory Group, which includes government, socially-motivated investors, banks, civil society, and social investment experts. Notable organisational supporters include Save the Children UK, The King’s Trust, and Oxford University’s Blavatnik School of Government.
Stephen Muers, CEO of Better Society Capital (BSC), a member of the Social Impact Advisory Group for the Better Futures Fund, expressed satisfaction with the fund, viewing it as a sign of the UK government's commitment to working with impact investors. Muers anticipates the fund to spur further similar initiatives due to increased familiarity with the method among local authorities, central government, and delivery partners.
While it will take time for outcomes to be assessed, given the long-term timeframe of many of the projects involved, Muers believes the announcement demonstrates the UK government's seriousness about seeking innovative ways of increasing social investment. Research commissioned by BSC, published in mid-2024, estimated that the use of social outcomes contracts to deliver public services in the UK had created nine times more in public value than they cost to provide.
The Better Futures Fund is one element of the UK government's Plan for Change, aimed at improving opportunities for children. The fund is part of a wider discussion on how social outcomes funds and other impact vehicles could boost social funding amid increasing government spending constraints. No details about when the first outcomes contracts supported by the Better Futures Fund will be signed have been revealed yet.
- The government's Better Futures Fund, a £1 billion social investment fund, is designed to leverage private equity by using social impact bonds to finance projects that address key issues like health-and-wellness, mental-health, and education-and-self-development for vulnerable children and young people.
- The fund, a crucial part of the UK's Plan for Change, seeks to move beyond traditional finance by adopting the science and business of social impact to achieve agreed social outcomes, thereby enhancing the quality of life for 200,000 children and families.
- With big-name backers like Save the Children UK, The King’s Trust, and Oxford University’s Blavatnik School of Government, the fund aims to reduce school exclusions, support youth employment, and provide aid to children dealing with mental health, crime, or social exclusion issues.
- In the long term, it's anticipated that the Better Futures Fund will spur further similar initiatives due to increased familiarity with this method among local authorities, central government, and delivery partners, contributing to the finance sector's evolution towards impact investments.
- Beyond Better Futures, the UK government is exploring other impact vehicles as a means to boost social funding, proving their dedication to improving the health, education, and overall well-being of the nation's youth through innovative finance strategies.
