A taxpayer-owned technology investment scheme launched by Rishi Sunak is sitting on a loss of more than £250m after hundreds of companies involved in the scheme went bust.
The £1.1bn Future Fund, launched by the then-chancellor Mr Sunak during the pandemic to help struggling start-ups make it through Covid, has had its value fall to £799m, accounts published by the Department for Business and Trade (DBT) show.
Five years after the scheme was launched, £75m has been recouped through repayments or sales.
The latest figures mean the £1.137bn put into the scheme in 2020 and 2021 is worth £874m, a £263m loss.
The Future Fund was designed by the Treasury after lobbying from venture capitalists concerned that loss-making start-ups were blocked from accessing other pandemic support schemes. An initial £250m investment was extended due to the popularity of the scheme.
It lent 1,192 companies up to £5m each, with the loans converting to shares in the companies when they next raised money.
However, hundreds of the companies who borrowed funds under the scheme have collapsed, in some cases blaming the strict loan terms of the Future Fund itself.
It has also left the taxpayer owning an unusual collection of investments including Killing Kittens, a sex party company; Propelair, a lavatory manufacturer; and Bolton Wanderers Football Club.
The most recent figures date to April 2024, when 202 firms had become insolvent.
The value of the Government’s holdings fell by £42m in the most recent year, while £10m was recouped.
Since then, a further 107 companies have gone bankrupt, according to the latest figures from the British Business Bank (BBB), suggesting the losses could be even greater than the historical figures show.
The Government has received a cash return from 86 of the 1,192 companies. It maintains stakes in 680 companies, while 117 have seen their loans extended to give them more time to repay cash.
The accounts suggest the DBT has little hope of recouping its money on the firms who have had their loans extended. It valued its remaining loans at £16m in March.
The DBT said the investments had been valued by an external expert. The fund has declined in value for each of the past three years.
The BBB, which administers the fund, said that the Government had not chosen the investments, with the fund’s terms simply matching loans made by private investors.
“The Future Fund is a portfolio of investments in start-up and early-stage companies,” a spokesman said.
“As venture capital is a long-term investment, it is too early to give an indication of the overall Future Fund performance. However, due to the size of the portfolio and the commercial nature of the third-party investors, we expect it to track the market over time.
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