UK initiates £500 million social fund aimed at aiding disadvantaged children
In a significant move aimed at enhancing opportunities for children in the UK, the government has launched a ten-year £500m (€576m) fund called the Better Futures Fund. This ambitious initiative is part of a wider government slate of measures known as Plan for Change.
The Better Futures Fund is designed with specific social targets focused on improving the lives of up to 200,000 vulnerable children and young people. The fund aims to provide support to access better education, safe homes, and a caring, supportive environment. Outcomes such as improved school performance and mental health are also key objectives for the fund.
This unique fund operates through social outcomes bonds, a method that pays only when the desired social outcomes are achieved. This approach promotes investing in prevention today to reduce future social and public service costs. Measurement of these social targets and outcomes relies on verifying achievement of specific indicators like educational attainment and mental health improvements. Payments are triggered only once these outcomes are validated, ensuring a strong focus on results.
The fund encourages local community involvement to design tailored solutions, reinforcing the measurement of outcomes relevant to local priorities. Stephen Muers, CEO of Better Society Capital (BSC), a member of the Social Impact Advisory Group for the Better Futures Fund, considers this a "great outcome" of talks between the government and social investors.
The fund will work with impact investors to finance projects. Muers believes the Better Futures Fund can potentially reach over 200,000 people based on previous project outcomes. The success of the Better Futures Fund will take time to gauge, given the long-term timeframe of many of the projects involved.
The upfront and operational costs of the projects will be paid for by impact investors, the charities carrying out the work, and other organizations. The first outcomes contracts supported by the Better Futures Fund have not been signed yet, and further details about the fund will be revealed "in due course" according to the government.
A research report 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 thought to be the largest of its kind in the world.
Muers believes the announcement shows the UK government is serious about seeking innovative ways of increasing social investment. The Better Futures Fund is expected to be deployed in areas such as improving school attendance and behavior, helping children avoid a life of crime, boosting mental health care for young people, and offering youth employment.
The Better Futures Fund is set to provide a spur for further similar initiatives, reflecting a results-based approach to funding social programs that ties government payments directly to the achievement of clear, measurable social improvements.
- The Better Futures Fund, a £500m initiative from the UK government, will employ blended finance strategies to attract impact investors, aiming for a social impact of improving lives for 200,000 vulnerable children and young people.
- This results-based fund, part of the Plan for Change, will focus on education, safe homes, and mental health support, with a vision for progress including improved school performance and self-development.
- As the world's largest fund of its kind, the Better Futures Fund is anticipated to inspire further energy transition in social impact investments, transitioning from traditional methods to ones that focus on education-and-self-development, general news, and business.
