UK taxpayers have lost £400 million after the collapse of hundreds of startups backed by the Future Fund, a Covid-era investment scheme launched by Rishi Sunak when he was chancellor. The fund spent £1.14 billion supporting 1,190 companies, including unconventional investments like the sex party organiser Killing Kittens and the now-defunct festival tickets business Pollen.
The Department for Business and Trade's latest annual report reveals that 334 companies backed by the fund have since gone under. The fund's value tumbled to £609 million as of March this year, though the British Business Bank (BBB), which administered the scheme, said the figure was actually £736 million after accounting for income and returns. Taxpayers have been left with a £400 million loss since the scheme closed to new applications in 2021.
Launched in May 2020, the Future Fund aimed to help emerging businesses during the pandemic. Under the scheme, the BBB would lend firms between £125,000 and £5 million, matching parallel investments from private investors, with loans converting to shares when the company next raised funds. The fund also invested nearly £2 million in companies linked to Sunak's wife, Akshata Murty.
Shortly after launch, the BBB's then chief executive, Keith Morgan, warned ministers that the scheme would mostly attract “second-tier” companies that could not attract investment elsewhere, making value for money “highly uncertain”. The business department's report also flagged that 3.9% of investments – about 47 companies – were suspected of fraud, amounting to £79.5 million.
A British Business Bank spokesperson said it was “too early to give an indication of the overall Future Fund performance” but expected it to track the market over time. A business department spokesperson defended the fund, stating the BBB continues to support businesses while responsibly managing taxpayers' money, funding 28,000 businesses and creating 38,000 jobs in the last year.
