Impact investment through outcomes partnerships offers a powerful way to achieve meaningful social improvement without increasing pressure on the public purse. These partnerships are a form of government commissioning in which public services are contracted on the basis of payment for the social outcomes that have been achieved.
This model draws in private investment to fund delivery organisations, with investors receiving their capital back and a return according to the measurable outcomes achieved. By paying for services only after positive results have been delivered, governments spend more effectively while payments can be matched sooner or later with cost-savings or increased tax revenues.
With evidence showing that outcomes-based partnerships can deliver effective public services at around half the cost of traditional fee-for-service models, the case for this approach is compelling.
Impact investment is not a new concept. The UK pioneered the world’s first Social Impact Bond (SIB) in 2010, which mobilised private investors to help reduce reoffending rates at Peterborough Jail and rewarded them only when reductions were achieved. Building on this foundation, the government has recently signalled its support for outcomes approaches. It launched the Better Futures Fund (BFF), which brings together investors, social enterprises, charities and government to support vulnerable children and young people through outcomes‑based partnerships.
This £500 million fund, which aims to get to £1 billion through matched commitments by local authorities and philanthropists, will tackle key challenges including school absence, youth unemployment, and addiction. The Government also announced the creation of the Office for the Impact Economy (OIE) in November 2025, designed to create outcomes partnerships and attract investments that improve lives and strengthen communities.
The recent announcements were important steps forward and much can be done to turn this into meaningful impact.
The first priority should be the speedy start-up of the Better Futures Fund, so it can begin delivering tangible change for our children and young people. The objective should be to getthe Fund’s first projects off the ground, set clear deadlines for decisions and allow projects tobe assessed quickly so they can demonstrate measurable progress as soon as possible.
Harnessing the potential of outcomes partnerships on a wide scale is now key to improving people’s lives and delivering better value for taxpayers. The OIE should replicate theoutcomes‑based approach at the heart of the BFF across other critical public service areas, to drive better results as well as effective prevention in areas such as homelessness, health, skills development and adult social care.
Impact investing and outcomes partnerships provide a way for the government to pursue its social agenda at scale despite huge current budgetary pressures. The government has put in place the OIE and BFF which are key to scaling outcomes-based commissioning. It should now be bold in the outcomes objectives it sets and in providing them with the capacity to commission for outcomes at real scale.
Sir Ronnie Cohen is a philanthropist and investor.
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