Construction on soft soils is always accompanied by the risk of significant, time-dependent settlement and bearing capacity failure. As technical knowledge has advanced, optimised ground improvement has offered significant economic advantages in reducing net settlement and resisting failure by installation of more flexible and cost-effective stone columns or sand compaction piles in the ground, rather than more rigid inclusions such as steel or concrete piles. The stiffness and strength of the subsoil around the columns is greater, and the consolidation time is reduced through shorter (radial) drainage paths. More sophisticated, time-dependent analysis of the settlement response and assessment of the bearing capacity of the improved ground under vertical loading from stiff footings is essential. Prediction of post-construction settlements must be made to guarantee the serviceability limit state of the footing in the long-term. This research has investigated the system response in terms of load transfer from the footing into the stone columns, combined with consideration of the micromechanical effects in the smear and compaction zones around the columnar inclusion, as well as the resistance to failure of the stone column itself through shear, bending, barrelling, punching or spreading. Both axisymmetric (single column) and innovative three-dimensional finite element analysis (five stone column group) were carried out, including a wished-in-place approach with reduced stiffness in the smear zone. The load-settlement behaviour of composite foundations using stone columns in soft clays was well predicted. This has revealed some interesting interactions and added further insight into the mechanisms derived from the physical modelling and experimental techniques. For example, it became clear that the stress concentration reduced so much with depth that the stone column dimensions could be optimized in terms of reduced diameter and/or length for this particular case of load bearing capacity.