Chancellor Rachel Reeves will today unveil a £500m youth services investment targeting children at risk of mental health crises, school exclusion, and crime. The “Better Futures Fund” aims to match this with another £500m from councils and charities.
Reeves said the fund would help “children facing the toughest challenges” after years of neglect. Culture Secretary Lisa Nandy called it a “powerful alliance” to give young people better opportunities. The money expands a Tory-era scheme that previously had just £70m.
Funding will use social impact bonds—where private backers are repaid only if projects succeed. A 2017 pilot in Peterborough cut reoffending by 9%, earning investors a 3% return.
The funding boost follows stark warnings from charities about the deterioration of youth servicesacross Britain, with analysis showing a 70% real-terms cut since 2010. Opposition MPs questioned whether social impact bonds could deliver systemic change. The announcement comes as new Office for National Statistics data reveals record levels of teenage mental health referrals, underscoring the urgency of intervention.
The announcement comes as Labour faces internal demands to abolish the two-child benefit cap, costing £3.6bn. Reeves, constrained by budget U-turns on winter fuel and disability payments, has yet to commit.
Gordon Brown has long advocated for youth services investment, calling this a step toward tackling poverty’s “root causes.” The fund will support initiatives like school mental health workers, which previously reduced absenteeism by over 50%.
Unlike rigid grants, social impact bonds allow flexibility in achieving targets. Reeves will promote the model during a visit to a Wigan school, framing it as innovative economics meeting social justice.
With child poverty shaping up as a key political battleground, this youth services investment signals intent—but critics argue deeper welfare reforms are needed to truly “break down barriers.”
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