Author Archives: GK Strategy

gk - What does a Biden presidency mean for Private Equity_

What does a Biden presidency mean for Private Equity?

By Ioan Phillips, Senior Political Analyst

Joe Biden has finally been confirmed as US President, following several fraught days of ballot-counting. But what does his victory mean for Private Equity?

Many in the industry will be glad to see the back of the volatility that characterised policy-making in the Trump administration.

While the platform Biden ran on suggests higher taxation and tighter regulation overall (trends that are typically negative for deal activity), the priority afforded to tackling COVID-19 and climate change could open up opportunities for assets in the healthcare and built environment sectors. We outline these themes in more depth below.

Tax rises: Low-hanging fruit?

Biden talked a lot about raising corporation tax during the campaign. If the Democrats control both houses of Congress come January, expect to see an increase prioritised as part of the new administration’s legislative agenda. This move would reduce the profitability of larger assets and Private Equity firms trading as corporations – but it is smart politics for a President who crafted his personal brand around standing up for “ordinary folk”.

The incoming President also sees an easy political win from raising Capital Gains Tax (CGT) on all income above $1 million, as well as a timely revenue raiser that helps offset losses from COVID-19.

Tighter regulation and scrutiny of M&As

Biden is no firebrand, but he and his party have stressed the need to better regulate M&As – especially those in sectors, such as technology, where issues of national security arise. The Democrats already proposed legislation during Trump’s presidency that sought to increase the oversight powers of the Federal Trade Commission (FTC) and broaden its regulatory remit.

In addition, it is likely that the Biden administration will use the appointment of progressive figures to drive tighter enforcement of antitrust regulations.

Fighting COVID-19

Biden’s acknowledgement that social distancing measures will have to continue into next year will likely sustain demand heightened for companies that can provider remote medical assistance and advice – or adapt their offering accordingly.

Against this, it is worth considering how any tightening of regulation around M&As may affect demand for healthcare assets. With Democrat proposals aimed at encouraging greater pluralism within markets, this could create favourable procurement environment for smaller healthcare firms seeking entry into state- or federal-level supply chains.

Green opportunities

Biden promised to increase taxes on carbon emissions and increase subsidies for clean energy sources. This is likely to augment demand for assets active in the sustainable energy sphere.

How GK can help investors and businesses

Biden’s agenda is arguably the most radical of any incoming president since Franklin Delano Roosevelt.

GK Strategy has helped many international firms operating similarly fluid fiscal, political, and regulatory frameworks. Whether advising investors and management teams on the sell-side and buy-side in a transaction process, working with investor-backed businesses and Private Equity firms on engagement with policy-makers, or providing ongoing support and advice on the political and regulatory environment, GK’s political, policy and regulatory DD offering leads the field in mitigating risk and value creation.

For more information, please contact our Head of Investor Services, Martin Summers, via Martin@gkstrategy.com.

gk launches education &skills insights report

GK launches Education & Skills Insights Report

We are delighted to announce the launch of GK’s new education and skills insights monthly report. Our team of consultants have created insightful content that looks at some of the most important trends and developments across the whole of the education and skills space.

Topics covered this month include:

  1. Five things to look out for in education policy – by David Laws, Strategic Advisor
  2. Interpreting changes to the National Funding Formula – by Joe Berkhout, Account Manager
  3. All steam ahead for international students in the UK – by Olivia Rohll, Senior Political Analyst
  4. What to expect from the review of children’s social care – by Jamie Cater, Head of Policy
  5. Form over functional skills – by Mike Williams, Account Director
  6. Research Impact: Better policy is possible – by Ed Jones, Account Manager
  7. Where next for FE after COVID-19? – by Ioan Phillips, Senior Political Analyst

Download a copy of the report here:  Education and Skills Insights – November

gk - Doing nothing is ‘no longer an option’

Doing nothing is ‘no longer an option’. With social care on the precipice, Boris Johnson urgently needs to outline a clear long-term vision.

By GK consultant and social care policy expert, Jack Sansum 

15 months have now passed since Boris Johnson stood outside Downing Street promising to “fix the crisis in social care once and for all”. While there have been numerous rumours emanating from Whitehall that plans are finally starting to take shape, concrete plans for reform have yet to be proposed.

As cases of COVID-19 rise and the Government scramble to gain a sense of control over the virus, now may not seem like the ideal moment for Johnson to think about the longer term. The pandemic has laid out in stark terms the need for social care reform, and as the UK enters a second wave of COVID-19 infections, it is essential that the Government finally sets out a clear long-term vision to deliver care both during and after the crisis.

Promises, promises…

The starting point of all discussions concerns the quality of the delivery of care and the system. The government wants to improve the quality of care, while generating greater stability and capacity within the system by encouraging more providers into the market. The co-ordination of provision between the NHS and social care is central, with Greater Manchester – where resources are pooled – seen as a model of best practice for the rest of the country.

While there is agreement on a number of key issues, there is growing frustration at government inaction from within the social care sector, and heightened calls for a long-term strategy. Care England Chief Executive Prof Martin Green has been particularly vocal on the issue. During a recent evidence session of the Health and Social Care Committee’s workforce burnout and resilience inquiry, Green outlined to MPs that there had been ‘endless’ discussions about integration but a lack of vision.

Green’s calls have also been echoed by Ian Trenholm, Chief Executive of the Care Quality Commission, and the Health and Social Care Select Committee, who have urged the government to provide an emergency boost of £7 billion a year to prevent the system from collapse as the pandemic pushes the sector towards a funding crisis.

The ‘magic of averages’

For social care, the past 20 years have seen a plethora of promises but ultimately inaction in policy terms. By contrast, NHS spending and output has grown more quickly than the population. Without long-term planning, health and policy will continue to lack coherence.

The funding mechanism will be crucial in underpinning a long-term plan for social care. While addressing the recent Conservative Party Conference, Johnson outlined a plan to bring “the magic of averages to the rescue of millions”, causing many to infer he was considering a National Insurance style system to pay for the costs of care.

It has also been reported that Ministers have considered a personal cap on care costs and the introduction on a specific social care tax. The government is also said to be considering revisiting the 2011 Dilnot report which suggested there should be a cap on the amount which anyone should pay for their care in their lifetime, fixing the figure between £25,000 and £50,000.

A clear vision?

COVID-19 has elevated social care reform into an urgent policy priority for the Government. New policy and legislative proposals are likely to be examined by a new health and social care taskforce and DHSC, providing significant scope for social care providers to shape the structure and mechanisms of the plans.

To engage with the Government’s plans for reform effectively, organisations will need to understand the wider direction of health and social care policy. Health and social care is GK Strategy’s largest policy area and we are experts at supporting organisations who are operating in highly regulated sectors and helping them to navigate complex markets and build relationships with key decision makers.

For more information or if you would like to speak to the GK team, please contact Jack Sansum at jack@gkstrategy.com

gk - COVID-19 and the looming mental health crisis

COVID-19 and the looming mental health crisis

By Ian Perrin, Senior Account Manager and health specialist 

Despite your views on the current Government and its handling of the coronavirus pandemic, understanding the UK’s coronavirus plan is an impossible task. I say that as someone who follows politics day-in and day-out. For people who work in industries unrelated to politics and Government, who work in small businesses, in schools, or on the high streets, trying to understand what is happening in our world right now is a nightmarish challenge. People the country over are suffering the constant anxiety caused by social restrictions, being told they are behaving recklessly, by relatives and loved ones falling ill, by struggling to get tests, worrying about their children in schools and about weddings, funerals, holidays, mortgages and – last but certainly not least – the security of their jobs.

This autumn has seen the worst of it all. During the summer, the UK enjoyed an August and September of lower COVID transmission rates, lower hospital admissions, and lower death rates. The government urged workers back to their offices, children back to schools, and individuals to drive the economy forward. But never far from the radio waves, the TV screens and the newspapers were voices ready to frighten the public about the long winter on the horizon, the infamous second wave threat, and the winding down of the furlough scheme. They were also subject to terrifying graphs, tellings-off about their demand for COVID tests, and threats about the availability and efficacy of potential vaccines. Rather than building public confidence in the UK’s handling of the crisis, the Government urged the public to take what was well and truly a leap of faith. Unsurprisingly, we are now in a position of national confusion, with confidence in the Government’s response dropping from over 70% in April to just 32% in October. 

With this cocktail of anxiety, is it any wonder that some are thinking about the looming crisis facing our country’s mental health? The comedian Ruby Wax became one of many names highlighting the issue, going so far as to say the mental health crisis will be ‘the next pandemic’. 

While the physical health of our nation is a priority, the effects of COVID-19 on mental health must not be ignored. Physical health and mental health are not mutually exclusive, they are interrelated and both are fundamental to good management of the other. Now, as our health system prioritises management of physical health, more than one in 10 patients are waiting six months for mental health support, and experts say the waits could ‘get a lot worse’. 

Organisations across the health system, including patients and campaigners, must amplify the voices of the few who are highlighting the looming mental health crisis, such as MIND, the Royal College of Psychiatrists and MPs such as Dr Rosena Allin-Khan. The time is now to work with senior decision-makers in the Government and parliament to both highlight the issue but also to bring forward solutions that can prevent a collapse of the country’s mental health. If the Government, parliament and the National Health Service understand the scale of the challenge ahead, and the potential course for recovery, decisive action can be taken to mitigate the damage that awaits us, not just in the winter but through 2021 and beyond. 

We would be delighted to continue this conversation with organisations, providers and campaigners who are engaging Government on the mental health response to COVID. If you would like to discuss this further, please do email me on ian@gkstrategy.com or call GK Strategy on 020 7340 1150.

gk - How is the ambition for NHS transformation being impacted by COVID19’s ‘new normal’_

How is the ambition for NHS transformation being impacted by COVID19’s ‘new normal’?

GK Strategy is frequently asked to outline the landscape of healthcare spending and reform, what services will see increased demand over the next decade and whether the coronavirus pandemic will accelerate or inhibit wider transformation within the NHS. We are also asked how the role of private providers might change and how they can best anticipate and address changes
in commissioning and service delivery.

In this blog, GK Consultant, Joe Cormack examines these questions to show where there is alignment between COVID related changes and longer-term plans to develop a more sustainable healthcare system.

Download the full piece here: How is the ambition for NHS transformation being impacted by COVID19’s ‘new normal’

GK - partner of I have a voice

GK Strategy becomes founding partner of I have a voice

By Jenni Hollis, Head of Client Services, GK Strategy

Ever walked into a meeting room or networking event and felt different to those around you? Ever been mistaken for a waitress, when you’re actually the campaign manager? The latter happened to me in a previous role, and I’ve heard plenty of similar tales over the years. All excruciating, all exposing a burning need for change.

While heaps of improvements have been made, diversity in politics, political parties and political professions remains far too low. To make matters worse, many young people feel increasingly alienated by a political world that they don’t understand, and by people that simply don’t look or sound like them.

More needs to be done to improve diversity within our industry and UK politics more generally. That’s why, here at GK Strategy, we are thrilled to become the founding partner for I have a voice.  

Run by the brilliant Rebecca Deegan, I have a voice is a social enterprise aiming to empower diverse young people to engage with politics.

Through its Youth Ambassador programme, I have a voice has already engaged a vibrant and diverse pool of young people, who are now more enthusiastic about the PR and political communications profession.

Nearly all of I have a voice’s ambassadors are female and around 40% are from BAME backgrounds. They are all from non-fee paying schools, based in different areas of the country. I was so happy and impressed to hear about their current advocacy campaigns on disability rights, fast fashion and diversifying the curriculum.

Rebecca is already engaging with schools across the country to grow her network of ambassadors. She’s also seeking to facilitate work experience programmes, so that these diverse candidates gain exposure to, and have a route into, the sector.

GK Strategy will take part in I have a voice’s work experience programme, and our team will contribute to the schools’ outreach. We will also provide pro-bono media and branding support to raise the profile of this fantastic initiative.

We encourage other agencies and organisations in our sector to get involved too. In return for support from businesses, I have a voice will promote work experience and internship opportunities to their network and give your staff the opportunity to engage with the stars of the future.  

You’ll also get to contribute to one of the biggest challenges our industry faces: how can we give the best advice without the broadest set of perspectives in the room?

Shaking up our industry to ensure diversity, and therefore the best possible political advice, is no mean feat. There are no silver bullets – and senior hires alone won’t solve the problem. It will take time to recruit and train more diverse, entry-level candidates, and for them to become the leading consultants and managing directors of tomorrow.

Rebecca’s initiative is one of the vital first steps in this mammoth task, and GK Strategy is delighted to be standing by her and supporting her as I have a voice’s founding partner.