Better Society Capital (BSC), the UK’s leading social impact investor, has reached a major milestone, passing £1 billion in investments aimed at tackling the country’s most pressing social challenges.
Originally launched in 2011 as Big Society Capital, the fund was established with £400 million from dormant bank accounts and £200 million from four of Britain’s biggest high street banks. Over the past 13 years, it has invested in 3,750 charities and social enterprises, making sufficient returns to reinvest and grow its impact. To date, BSC has helped attract almost £3 billion in additional funding from private and philanthropic sources for projects across housing, youth services and healthcare.
Stephen Muers, chief executive of BSC, said the £1 billion figure reflected the success of a model built on recycling capital sustainably: “It shows the value of recycling capital and being sustainable. It is testament to the model. And the reason we have been able to get to that milestone is because the whole market has been growing. There are more investors seeing the potential to realise social impact alongside financial returns.”
Muers pointed to the increasing investment in housing for those at risk of homelessness as a standout example. BSC-backed initiatives like Resonance, a social impact investor managing £325 million in assets, are now providing stable homes for 3,600 people across Greater Manchester, Merseyside, Bristol and Oxford.
“The number of people in precarious housing situations continues to grow — with around 100,000 families currently in temporary accommodation,” Muers said. “We started small in 2014, proving the model by leasing properties to charities. Now, larger investors like local government pension schemes are stepping in, helping scale the solution.”
BSC targets a modest 1 per cent net annual return across its deployed capital over five years, with a 3 per cent return from its investment portfolio to cover operational costs. Although inflation has eroded some of its capital’s real value, BSC views its performance as proof that sustainable, outcomes-focused investment can supplement traditional public spending.
Despite the success, BSC has not received any new dormant account allocations in the past year. The previous government had committed to directing an additional £350 million from dormant accounts to organisations like BSC by 2028.
Meanwhile, the new Labour government has signalled strong interest in using outcome-based investment to “rewire the state”, setting up a social impact investment advisory group to help direct funding. A decision on future allocations is expected in the second phase of the chancellor’s spending review, due later this spring.
Muers said he hoped to see future investments prioritise support for young people and disadvantaged families — especially where traditional public services struggle. “Particularly where there are complex issues that people face, where traditional public services don’t always deal with them very well, where people are passed around between the NHS, schools, local authorities; we have examples of where investment-backed models have been good ways to deliver those services.”
With a growing appetite among investors to achieve social as well as financial returns, Muers said the sector was poised to play a bigger role in helping government meet its long-term social goals. “There is a big prize here, potentially, in bringing to bear investors who want impact on issues that the government cares about and can collaborate well.”
Paul Jones
Harvard alumni and former New York Times journalist. Editor of Business Matters for over 15 years, the UKs largest business magazine. I am also head of Capital Business Media’s automotive division working for clients such as Red Bull Racing, Honda, Aston Martin and Infiniti.