Companies supported by Rishi Sunak’s pandemic-era Future Fund demonstrate significantly higher failure rates compared to similar businesses that avoided government backing, according to a damning new audit that questions the scheme’s effectiveness.
Future Fund Performance Analysis Reveals Troubling Trends
RSM UK Consulting’s comprehensive review uncovered alarming patterns among Future Fund recipients. These companies experienced higher liquidation rates and sharper employment declines. Furthermore, they showed no financial outperformance in critical areas like turnover or valuation compared to non-funded peers.
Future Fund Scheme Structure and Implementation
The £1.14 billion program launched in May 2020 aimed to support technology-focused startups unable to access other COVID finance programs. Key features included:
- 1,193 companies received state-backed convertible loans
- Private investors had to match government funding
- Loans converted into equity stakes, creating Europe’s largest venture portfolio
- Program intended to transform UK industry and strengthen science leadership
Future Fund Liquidation Statistics and Business Outcomes
By June 2025, 340 Future Fund-supported companies had entered liquidation. This represents a substantially higher failure rate than comparable businesses outside the program. RSM researchers noted that slightly more non-funded companies remained active, suggesting stronger resilience without government backing.
Employment Impact and Financial Metrics
Future Fund portfolio businesses experienced sharper employment declines than their counterparts. Researchers indicate many recipients prioritized business scaling over job creation. The audit revealed minimal differences between portfolio and non-portfolio companies on overall financial metrics including valuations, turnover, and fundraising success.
Program Administration and Early Warnings
Keith Morgan, former British Business Bank CEO, had warned ministers in 2020 about potential taxpayer fund wastage on second-tier companies. His concerns were overruled despite clear indications that strongest startups would attract private funding without state intervention.
Future Fund Defense and Long-Term Prospects
The British Business Bank defended the program, highlighting survey evidence that 70% of portfolio companies would have collapsed without support. Marilena Ioannidou, the bank’s senior director, stated the scheme delivered its objectives by providing vital stabilization during the pandemic and mobilizing private capital in high-growth sectors.
Future Outlook and Taxpayer Returns
While liquidation rates remain concerning, RSM noted that successful exits through company sales occurred more frequently among Future Fund recipients. A handful of outlier firms show exceptional growth rates, offering potential long-term taxpayer returns. However, expected impacts like sustained growth and innovation spillovers may require several more years to fully materialize.
Frequently Asked Questions
What was the main purpose of the Future Fund?
The Future Fund aimed to provide lifelines to loss-making, technology-focused startups that couldn’t access other COVID finance programs during the pandemic.
How many companies received Future Fund support?
Exactly 1,193 companies received government-backed loans through the program, with private investors matching the state funding.
What percentage of Future Fund companies failed?
By June 2025, 340 companies had gone bust, representing a significantly higher failure rate than comparable non-funded businesses.
Did the Future Fund achieve its intended goals?
While the program provided immediate stabilization, the audit shows mixed results with higher failure rates but some successful exits and growth stories among recipients.
What were the employment impacts of the Future Fund?
Portfolio businesses experienced sharper employment declines than counterfactual companies, suggesting many prioritized scaling over job creation.
Are taxpayers likely to see returns from the Future Fund?
While some outlier companies show exceptional growth, the overall taxpayer return remains uncertain and may take several more years to materialize fully.
