The UK government has launched the world’s largest social outcomes fund, the £500 million (>A$1 billion) Better Futures Fund, that puts impact investing at the centre of government policy to support vulnerable children and families across the UK.
The fund represents a substantial commitment from the government to work with impact investors, philanthropy, purpose-driven business to deliver social impact. It will break down barriers to opportunity for up to 200,000 vulnerable children and young people, providing the support and funding needed to access a better education, a safe home and a caring supportive environment.
The Better Futures Fund will run for ten years and support multiple social outcomes bonds that pay on the basis of desired outcomes being achieved. The fund intends to use government funding as outcomes payments to catalyse local funding and partnerships, with plans to raise another £500 million from local government, social investors, and philanthropists on top of government’s funding.
This comes amid a growing realisation that outcomes-based projects can improve public services more generally beyond the specific outcomes achieved for service providers. Policy and strengthening service design can bring about wider system-level impact.
According to Impact Investing Institute – a contributor to the Social Impact Investment Advisory Group that advises the UK government on working with the impact economy – the “fund demonstrates the potential of public, philanthropic and private partnerships to deliver social outcomes and economic growth in the UK, and to inspire similar efforts globally”.
Stephen Muers, the CEO of UK social investor Better Society Capital (BSC) – another member of the Social Impact Advisory Group – said the fund’s launch is a real signal of the government’s commitment to working with impact investors. BSC had previously 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 UK has a history of leadership in this space. Its impact investing market now stands at more than £77 billion in assets under management with growth in recent years outpacing the wider UK investment management sector.
Australia’s Commonwealth Outcomes Fund
In Australia, the government committed $100 million in the 2023-24 Budget to establish the Commonwealth Outcomes Fund, with a further $5.5 million committed a year later to implement the fund.
The fund will make payments to state and territory governments and directly to service providers and social enterprises. Payments depend on how service providers achieve the fund’s goals.
Project selection and contracting are ongoing, and the Fund is actively engaging with states, service providers, and investors.
Several pilot projects are now commencing, including:
Get Back in the Game (NSW): Funding from July 2025 to June 2027, with both Commonwealth and NSW Government contributions aligned previously.
Young Parent & Workplace Programs (South Australia): Both projects are underway under formal agreements starting mid‑2025, with matched Commonwealth‑State funding.
Self‑Determined Aboriginal Employment Initiative (Victoria): Part of the first group of funded pilots, announced in late 2024 and now under implementation.
Join the OnImpact mailing list to receive the latest impact investment news and updates.