Impact Policy Tracker Policy

Better Futures Fund



Launched in 2025, the Better Futures Fund is a ten-year outcomes payments fund announced by the UK Government to provide early support to children and young people. The fund aims to catalyse meaningful and measurable improvements in several areas affecting young people’s lives, including family stability, youth reoffending, and homelessness.

The Government has committed £500 million to the fund, which will support up to 200,000 children and their families over the next decade by bringing together local communities, charities, social enterprises, investors, and philanthropists.

Managed by the Department for Culture, Media and Sport, the Better Futures Fund reflects the government’s growing recognition of the impact economy and the role of impact investing in driving transformative change. It represents a major policy shift towards embedding outcomes-based approaches across public services, building on over a decade of leadership in outcome-based finance. The fund follows the legacy of the £70 million Life Chances Fund and forms part of the broader Child Poverty Strategy and national Plan for Change.

Highlights

  • Largest outcomes-based fund in the world to date: The Better Futures Fund is the largest outcomes fund ever launched globally, backed by a £500 million commitment from the UK Government. It significantly surpasses previous efforts such as the £70 million Life Chances Fund (by around 4.5 times when adjusted for inflation). The Life Chances Fund leveraged over £100 million in co-payments from local authorities, NHS bodies, and philanthropic partners. Assuming a similar one-to-one leverage ratio, the Better Futures Fund could mobilise at least £500 million more, generating up to £1 billion in total outcomes payments.

  • A fund that goes beyond political cycles: Unlike most outcomes funds, which typically last three to four years, the Better Futures Fund will run for a decade. This long-term horizon provides stability beyond short political mandates, giving service providers the time and space to build, adapt, and embed improvements - ultimately increasing the likelihood that positive outcomes are sustained over time.

  • Key role of GSG Impact’s National Partner in the UK: The launch of the Better Futures Fund was informed by the recommendations of the Social Impact Investment Advisory Group (SIIAG), established in early 2025. GSG Impact’s UK National Partner, the Impact Investing Institute, played a key role through its leadership within the SIIAG - chairing a dedicated working group on opportunity areas for impact capital and with its Chair Emerita, Dame Elizabeth Corley, serving as Chair of the Advisory Group.

Government’s Role:
Market Participant


Country:
United Kingdoma

Policy Type:
Outcomes partnerships

Year: 2025

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

Contact Person: For further details on the case study and GSG NP's role, please contact Bella Landymore or Sarah Teacher at Sarah.Teacher@impactinvest.org.uk and Bella@impactinvest.org.uk

Additional information:
Expert Insight: How the UK's Better Futures Fund could create system-level impact

Outcomes partnerships

What are outcomes partnerships?

Outcomes partnerships are innovative funding mechanisms that link payments to the achievement of measurable social or environmental outcomes, rather than to the delivery of predefined services. They typically involve three core parties: a government or public entity acting as the outcome payer, a service provider delivering the intervention, and a third-party investor supplying upfront repayable finance. The investor is repaid, partially or fully, only if the agreed outcomes are achieved. This structure shifts financial risk away from the public sector, encourages performance-based service delivery, and enables more flexible, adaptive approaches to addressing complex social challenges. It underpins instruments such as Social Impact Bonds (SIBs), Development Impact Bonds (DIBs), Career Impact Bonds, and outcome funds.

Outcomes partnerships have emerged from pioneering efforts in the UK and were developed in response to the limits of traditional, one-size-fits-all service delivery, especially in sectors like health, education, and employment. They have helped improve public sector effectiveness (delivering up to 9x of public value for every $1 invested), mobilise private investment for the public good, and strengthen performance management through learning and adaptation. Outcomes partnerships rest on three key principles: 1) collaborative design, where stakeholders co-create shared goals; 2) flexible delivery, allowing for real-time learning and local adaptation; and 3) clear accountability, with transparent reporting on tangible, person-centred outcomes.

For more information, visit GSG Impact’s reports, Shifting Gears - Challenges in scaling outcomes partnerships in government and strategies for success and Tying funding to results, and Oxford University’s Government Outcomes Lab website and its latest report “The evolution of social outcomes partnerships in the UK”.