Category Archives: Business

Roundtable discussion: A collaborative and child-centred approach to children’s social care

In April 2025, Christie & Co, Compass Carter Osborne, and GK Strategy hosted a female-led roundtable discussion on the challenges in the children’s social care sector across England and Wales. Here are the key takeaways.

For a roundtable event held in April 2025, hosts Hannah Haines (Head of Healthcare Consultancy, Christie & Co), Michâela Deasy (Head of External Communications, Compass Carter Osborne) and Lizzie Wills (Senior Partner & Head of Private Equity, GK Strategy) were joined by some of the biggest female names in the UK children’s social care sector.

The roundtable brought together operators, lawyers, investors, and sector experts, all of whom share a passion for quality healthcare and for driving an increased awareness of the challenges faced by operators across the country.

Below are some of the key highlights from the discussion.

THE INTRODUCTION OF PROFIT-CAPPING IN CHILDREN’S SOCIAL CARE AND WHAT THIS MEANS FOR THE SECTOR

Overview

Ahead of last year’s election, Labour pledged to reform the children’s social care system to improve the outcomes of looked-after children and those in care, and to address the funding crisis in the system following years of local authority funding pressures.

As part of the King’s Speech in July 2024, the government announced its plans to introduce the Children’s Wellbeing and Schools Bill, which formed part of its legislative programme of over 40 new bills. One of the most controversial elements of the Children’s Wellbeing and Schools Bill was announced the following November; the ability of the government to intervene directly in the market to introduce a profit cap on providers.

Concerns about excess profit-making in the children’s social care sector are not new, and the sector has historically done a good job at engaging with the government about why the fees charged by the independent and private sectors are typically higher than those provided by local authorities. This includes the complexity of the placements provided, with the private and independent sector providing a higher proportion of placements for children with highly complex needs, often where they need additional therapeutic support, or one-to-one care. The private sector also takes a higher number of children who have already experienced several placement breakdowns in local authority provision. The ability of the sector to be able to make a level of profit allows it to reinvest in meeting quality standards, hiring and training staff, and delivering new settings, often at the request of local authorities who are struggling with high levels of demand.

The Government has been clear that it does not intend to introduce a profit cap immediately and will only do so if its broader package of measures is unsuccessful in tackling what it sees as ‘unacceptable profiteering’ and rebalancing the market. There will also be a detailed public consultation before anything is implemented, including discussions specifically with local authorities and providers.

If the profit cap is implemented in the future, providers will be required to submit an annual financial return to the government to enable their profit levels to be assessed. Again, details are limited in terms of what information will be included in these returns. Details will also be subject to consultation with final plans set out at a later date. Should enforcement action need to be taken against a provider, this will be in the form of fines, the maximum amounts of which are expected to be set out in the subsequent secondary legislation.

Views from around the room: What will profit capping mean for the sector?

The Government might say it’s not against profit making, just against ‘profiteering,’ and that the steps it is taking are necessary to address the latter. The consensus is that the government’s approach to having a profit cap as a backstop in the new legislation will be a useful tactic to encourage providers to reinvest their profits into delivering better outcomes for children and young people, despite the potential for causing short term uncertainty.

It might be comforting for providers to know that, if the Government does implement a profit cap, it is expected to take several years to go from ambition to delivery, given the complexities involved. Significant parts of the mechanism will need to be set out in secondary legislation, and many of the details that are yet to be ironed out will be controversial, including how profit will be determined for the cap, and if it will be per placement, per business or per setting (or indeed based on some other metric).

Banks are watching the sector closely, but invested funds (especially impact funds) have a continued interest. Investors that are likely to do well are those that are reinvesting profits back into the UK healthcare infrastructure. However, smaller organisations may struggle to scale due to dampened investor interest, raising questions about how they can demonstrate ROI to investors and build an investment case.

In its 2022 report on children’s social care in the UK, the CMA acknowledged that comparing costs in the sector was complicated by differences in the needs of children placed in different settings and variations in how costs are calculated and reported. Rather than focusing on profit, which loses sight of the child, participants at the roundtable agreed it should be based on the outcomes and progression of the child. It should be a partnership, with everyone working together.

This was echoed around the room, alongside the challenges in measuring outcomes using such methods as the BERRY approach which matches needs against costs. Every looked-after child undergoes reviews to ensure outcomes are measured. A universal framework for evaluating providers based on outcomes rather than profit was seen as a potential solution that government should consider. The sector is well placed to advise the government on how approaches to date have worked, and how they could be refined in future.

We have already seen changes in Wales through its Eliminate Agenda, whereby it became the first nation in the UK to legislate to prevent profit-making by private companies in relation to children’s residential and foster care services by 2030. The Health and Social Care (Wales) Act 2025 received Royal Assent in March 2025 and mandates that children’s residential and foster care services be provided exclusively by local authorities, charities, or not-for-profit organisations.

Wales can serve as a case study for England. The sector in Wales is very prescriptive about what can and can’t be done by providers. The Welsh Government is now considering the role cooperatives could play in the delivery of services and they’ve pushed back the final stage in the roll-out of the plan by three years (to 2030) A lot of what is happening is political and their agenda is quite clear, so England would be wise to keep a watchful eye on what is happening over the border.

What action should be taken?

The consensus around the table was that we need to evidence the positive outcomes the private and independent sector is delivering for children and young people, to counter negative perceptions around profit-making. There was agreement that the sector has historically not been sufficiently vocal in making this case, and demonstrating the excellent outcomes it supports across a group of vulnerable individuals and their families.
The focus should be on positive outcomes for children, not profits – so providers, parents, the government, and the media all need to work together to lift up the sector and highlight the amazing work that it does for each child, keeping in mind that the outcomes for each will be different.
There is a continuing lack of constructive dialogue between some Local Authorities and operators throughout the health and social care space. The sector must focus on demonstrating positive outcomes and maintaining strong relationships with local authorities to navigate the ongoing political changes.
Any new policy must be outcomes-focused, fit for purpose, workable in practice and designed and implemented after full consultation with the sector.

INVESTMENT IN THE SECTOR AND ONGOING COMMUNICATION ISSUES IMPACTING PROGRESSION

Views from around the room: What could the children’s services sector be doing to improve communications between the Government and operators?

The landscape of children’s services is marked by a myriad of challenges and opportunities, particularly in the context of collaboration, funding, and policy implementation. Despite numerous operators striving to collaborate and communicate effectively, the sector is often met with negativity, largely due to underfunded government spending across all areas.

A significant issue is the lack of focus on the child. There is insufficient engagement from government with the private sector, and the narrative needs to shift to place the child at the centre of all decisions. When the child’s needs are prioritised, quality naturally follows. However, there is an imbalance as each child and business is different, and policies are often rushed through without adequate consultation with operators.

An immediate concern is the sustainability of providers amidst declining fostering rates and increasing care needs. Many smaller businesses are at risk of not surviving due to these pressures. Perceptions that mainstream education settings continue to struggle to support those with lower-end spectrum needs is driving an increasing number of parents who feel they are left with no other option but to seek Education, Health and Care Plans (EHCPs) and external support, resulting in an increasing demand for specialist support on the lower end of the scale. The government’s current policy agenda around mainstreaming and inclusivity for children with less complex SEND is an attempt to address the ‘drift’ towards specialist schools.

It was also highlighted that, amidst funding challenges, local authorities are focusing on immediate budgets rather than long-term savings and the positive impact on the child that could be achieved through early intervention. The debate around profiteering stresses that higher margins do not necessarily equate to higher quality, nor do lower margins imply lower quality. The goal should be to support the child’s needs, improve outcomes, and subsequently lower the costs of provision. However, the primary challenge remains budgetary and funding constraints faced by local authorities.

Bespoke solutions, such as tuition hubs for children close to re-entering mainstream education are essential. These hubs can provide tailored support to ensure a smooth transition back into the school environment.

What action should be taken?

The sector must focus on child-centric approaches, effective collaboration, and innovative solutions to navigate the current challenges. By prioritising the child’s needs and demonstrating positive outcomes, the sector can build a stronger case for adequate funding and support. As a provider, if you can demonstrate where money is being reinvested to drive up quality and outcomes, that’s a useful and constructive addition.

LEADERSHIP AND AN EFFECTIVE MANAGEMENT STRUCTURE IN HEALTHCARE BUSINESSES

As demand for high-quality, specialist care continues to grow, how can management navigate the complex environment, mitigate risk, secure investment, and ensure sustainability and innovation within the sector?

Investors in this space are showing a notable shift in appetite. While continuing to focus on identifying future leaders from within the sector – whether for CEO, CFO, or CPO roles – they are increasingly looking beyond traditional industry boundaries to source talent. This reflects a growing recognition of the need for financial and operational strategies to evolve with rising demands, including revenue diversification.

Take the Chief People Officer (CPO) role, for example. The CPO’s mandate is to foster a culture that attracts and retains a diverse team – one that is calm, focused, driven, and open to embracing technology, with a strong understanding of risk and quality outcomes.

Similarly, today’s CEO must be multifaceted, a strategic leader with deep experience in execution, a keen understanding of risk, and a strong focus on quality. They must leverage technology that delivers real value, foster a purpose-driven culture, understand competitors and market dynamics, and prioritise meaningful metrics and KPIs. Above all, they must lead with empathy and drive a people-first agenda.

Views from around the room: What does strong leadership look like to you?

Not losing sight of why you’re there creates a robust culture
Trust. Being able to challenge one another at every level is healthy and creates a stronger business
Need a passion for the sector itself and an understanding of what internal and external drivers
Someone who has risen through the ranks, who is an inspiration to others and brings about a strong, positive culture
While knowledge of the sector is beneficial, it’s not necessarily the case that the best talent is a sector specialist. Sometimes it’s about looking more broadly at the talent out there that could be great at driving leadership
Someone with an inherent entrepreneurial quality who can find a solution to a challenging landscape without diluting what the business is set to achieve
A leader who takes real-life stories back to the boardroom, reminding the corporate team that it’s not just about the numbers, it’s about bringing the personal element back

To find out more about the changing landscape of the children’s social care sector, or to join the team’s next roundtable event, contact:

Lizzie Wills: lizzie.wills@gkstrategy.com

Hannah Haines: hannah.haines@christie.com

Michâela Deasy: michaela@compasscarterosborne.com

Tariff climbdown offers Trump an off ramp, but uncertainty remains

History repeats itself. An adage the US President and his team of advisers would do well to heed.

In 2022 the radical tax cutting budget announced by Liz Truss’ government sent yields on UK gilts spiralling out of control, with the 10-year gilt yield increasing by the largest amount in a single day since the 1990s. The Bank of England had to intervene with emergency bond purchases to prevent a collapse in the pension fund market.

This market crisis ultimately had profound political consequences, with Kwasi Kwarteng being removed as Chancellor after just 38 days in office, and the end of Liz Truss’s premiership following soon after, making her the shortest-serving Prime Minister in UK history at only 49 days.

The episode highlighted how sensitive financial markets can be to fiscal policy decisions, particularly when they raise concerns about a country’s debt sustainability or when policy changes are announced without adequate preparation or buy-in from the market.

We can look further back to understand the might of the bond market. President Clinton’s economic adviser, James Carville, said: “I used to think that if there was reincarnation, I wanted to come back as the President or the pope or as a .400 baseball hitter. But now I would want to come back as the bond market. You can intimidate everybody.” This has arguably proved to be the case for President Trump – despite trillions being wiped off the stock market, it was rising yields on US Treasury bonds that forced him to blink.

The President claims that the decision to pause the new reciprocal tariff regime for 90 days was the result of 75 countries contacting the White House to express willingness to negotiate trade deals. This narrative creates a potential blueprint for a further watering down of tariffs once the pause ends. Trump has created some leeway to say that after successful negotiations countries will no longer be “ripping off” the United States and will point to his tariffs as a masterstroke in political and economic diplomacy. This exit strategy, however, may come too late to repair the damage done to the international economic and geopolitical order that Trump’s approach is likely to leave in its wake.

This short reprieve, as it may still turn out to be, is creating major issues for the global economy, with financial markets in a state of flux trying to pre-empt and then respond to Trump’s next move. The political and economic uncertainty of the next three months will be difficult to navigate, particularly for multinational businesses with complex supply chains.

UK Prime Minister Sir Keir Starmer has already acknowledged that fixating on whether the UK can negotiate the removal of its own 10% tariff is almost irrelevant, given the potentially more serious impacts the UK could face in the event of a global economic slowdown. A trade war between the two biggest global economies – the United States and China – would have far reaching implications that no country would be able to insulate itself from. The Bank of England has already warned that supply chain disruptions would be expected to weigh heavy on UK economic activity.

This all creates a big headache for the Chancellor of the Exchequer, Rachel Reeves. Having had to make some politically unpopular decisions in recent week to restore the £9billion of fiscal headroom she identified in the autumn budget in October, she could once again find this headroom wiped out as UK growth is revised down. There is already speculation about HM Treasury’s potential response. Tax rises, more spending cuts, or additional borrowing are the options, and none of them are politically palatable.

The global economic challenges have already had an impact on the machinery of government. The Prime Minister has removed two key people from the Number 10 policy unit as part of efforts for the government to speed up economic growth and policy delivery. In the coming weeks it is likely the government will bring forward the publication of the government’s Industrial Strategy (originally scheduled for publication alongside the Spending Review in June) to demonstrate that the UK is open to business and ripe for international investment. The government has also shown a willingness to support industries that are exposed to tariffs. In anticipation of tariffs coming into effect, Starmer announced a watering down of regulations relating to electric vehicle sales targets to provide manufacturers with some breathing space. We are likely to see additional measures announced as the government continues its consultation with business on the impacts of higher tariffs, and what the UK’s response should be.

The government is facing a significant challenge to its central mission to grow the economy and raise living standards. A renewed emphasis to go further and faster in the delivery of its reform agenda, does, despite the doom and gloom, offer an opportunity for businesses. Policymakers are firmly in listening mode. Businesses that can offer solutions to the economic pressures the government is facing, as well as a commitment to investing in the UK, will find a welcoming ear.

The next few months will undoubtedly be challenging and uncertain. However, a renewed collaboration between the public and private sector to navigate these turbulent times has the potential to offer a pathway for the UK to position itself as a top destination for investment and business growth.

Does the latest financial settlement for local authorities shift the dial on council finances?

The government has now confirmed the local authority financial settlement for 2025-26. This is a crucial time of year for councils who rely on these funds to deliver statutory services including adult and children’s social care, and support for children and young people with special educational needs and disabilities. Independent providers of these services should pay close attention to the financial settlement as it provides a good indication of future cost pressures for councils at a time when demand for statutory services continues to rise.

The final settlement will provide £69.4 billion of core spending power to local authorities in England. This represents a rise of £4.4 billion compared to 2024-25, constituting a 6.8% cash terms increase (or 4.3% when adjusted for inflation). Of this £69 billion figure, 24% is non-ring-fenced settlement funding, 14% is grants for social care, 6% is other grants, and the remaining 55% is council tax. While the overall increase in spending power is broadly aligned with increases in recent years, in real terms it is approximately 9% below where it was in 2010-11. Since this date, councils have become increasingly reliant on council tax revenue to meet their statutory obligations.

The funding settlement does not appear to provide much relief to local authorities who continue to struggle under the pressure of growing demand for services. Chair of the Local Government Association, Cllr Louise Gittins, said the extra funds ‘will help meet some of the cost and demand pressures they face but still falls short of what is desperately needed’. She went on to say that that the funding landscape remains extremely challenging for councils of all types and many could be forced to make further cuts to non-statutory services.

However, the government hopes change is on the horizon with its proposed reforms to local authority funding. Ministers believe these reforms will provide more financial certainty to councils, which will in turn allow them to better manage their spending and reduce cost pressures. The Ministry of Housing, Communities and Local Government has recently concluded a consultation on local authority funding reform and is in the process of analysing the responses it received. One of the primary proposals under consideration is to move to a multi-year settlement from 2026-27, which the government believes ‘will enable [councils] to better plan ahead and achieve better outcomes for local residents, as well as better value for money for taxpayers.’

Overall, the recent confirmation of the local authority funding settlement points to more of the same for councils up and down the country – mounting cost pressures will leave council leaders scrambling to meet rising demand for services. For providers of local authority funded services, this demonstrates the ongoing importance of communicating to commissioners their high-quality, value for money offering which will reduce the burden on council resources. It will also be vital for businesses to monitor the government’s response to the consultation on local authority funding as this will allow them to best anticipate and respond to possible future changes to commissioning practices following the policy’s implementation.

To discuss the local authority funding landscape in more detail, please contact Hugo Tuckett (hugo@gkstrategy.com).

Unpacking the government’s 2025 mandate to NHS England

At the end of January, Secretary of State for Health and Social Care Wes Streeting delivered the government’s 2025 mandate to NHS England. This is a crucial document which sets out the health secretary’s goals for the health service over the next 12 months. It also provides all-important detail about the government’s emerging views on reform of the health and social care system ahead of the much-anticipated 10-Year Health Plan, due to be published later this year – likely in June or July.

The findings of Lord Darzi’s investigation into the health service, commissioned and published in the weeks immediately following Labour’s general election victory, have unsurprisingly been hugely influential in shaping the development of Streeting’s inaugural mandate to NHS England. The health secretary has said the mandate will help address the urgent challenges identified by the Darzi investigation and includes a ‘sharp focus on improving efficiency and productivity.’ Streeting again warns that the ‘culture of routine overspending without consequences’ is over.

At the heart of the 2025 mandate are three key aims: reducing waiting times, improving access to primary care, and improving urgent and emergency care. To reduce waiting times, Streeting has said he is refocusing the NHS on making progress towards an 18-week standard, whereby 92% of patients wait no longer than 18 weeks from referral to treatment, which will work in tandem with the steps set out in the government’s Elective Reform Plan published earlier this year. Patient choice is also at the heart of this agenda. The mandate emphasises the importance of implementing a cultural shift in the NHS to prioritise the patient experience in reducing waiting times, including through the use of the private sector to enable greater patient control over their treatment.

Improving access to primary care is the second key aim of the mandate. This mirrors one of the three strategic shifts the health secretary wants to see as a result of his reform agenda: shifting more treatment from hospitals to communities. Streeting is clear that primary care services are the front door to the health service but for too many people it is not possible to get a timely appointment, if at all. The mandate requires NHS England to enable patients to access general practice more quickly and tackle ‘unwarranted’ variation in services provided by general practice.

Improving urgent and emergency care is the mandate’s third aim. The mandate labels ambulance response times and waiting times in A&E as ‘unacceptable’. While the health secretary recognises that transforming these services will take time, he does state that a start must be made ahead of the government publishing its strategy to improve urgent and emergency care later this year. The mandate therefore includes a specific focus on reducing long wait times to improve patient safety, experience and outcomes.

The ambitions set out by Streeting in his first mandate are laudable. The bleak fiscal situation means the health secretary will have a hawk-like focus on monitoring performance against budgets. This is in recognition that the uptick in funding that the Department of Health and Social Care received at the October budget is unlikely to point to further significant cash injections in the immediate future. For providers, it also underscores the importance of positioning themselves as a high-quality, value for money partner to ICBs and NHS Trusts in delivering strong outcomes for patients.

If you would like to discuss the 2025 NHS mandate in more detail and what it means for businesses in the sector, then please contact Hugo Tuckett (hugo@gkstrategy.com) or Arth Malani (arth@gkstrategy.com).

Sugar, we’re going down: is the review of the soft drinks industry levy a taste of things to come?

The health secretary has warned he will “steamroll” the food and drink industry by launching a new plan to tackle obesity. In an interview with The Guardian setting out his priorities for the year, he said the move is part of a broader focus on preventing ill health rather than simply treating it. The plan is being worked up across government departments and the sector will soon be invited to feed into a consultation process.

Is this political rhetoric indicative of a heavier-handed approach to public health than under the previous iterations of government? Our gut instinct is yes, but proof of the pudding will be in the government’s response to the Soft Drink Industry Levy (SDIL) review. Launched last October, health and treasury ministers are considering revisions to the existing sugar content thresholds, including increasing the scope to milk-based and milk substitute products, and the levy rates.

Although the SDIL is widely considered to be a successful and effective policy intervention, the UK’s sugar consumption remains significantly above recommended levels, especially among children. By lowering the sugar thresholds and widening the scope of products, more soft drink producers will be impacted by regulations and will be forced to either reformulate products or see their production costs increase. The review will be completed in the spring with changes enacted in the 2025 Budget, so producers should be closely following policy developments throughout the course of this year. The government’s response to the review will set the mood music for the National Food Strategy so this is a crunch point for all those in the sector, not just soft drinks producers.

Beyond the health merits for cracking down on sugar content, there are political and economic factors at play. Politically, the Prime Minister insists that 2025 is a year of delivery after a slow and difficult start to his tenure. Further state intervention in food and drink markets in the name of public health would play to a large section of the labour backbenchers. Party morale is likely to be put to the test in the coming months as the nation’s economic woes continue. This is where HM Treasury comes into the picture; amid turbulent financial markets and disappointing economic growth, the Comprehensive Spending Review will be an uncomfortable experience for the Chancellor and her team. Raising revenue from the levy could ease some of the pressures that will undoubtedly fall on the schools budget, which the levy supports.

For industry there is a fine balance to strike. Full resistance to public health reform would be counterproductive and leaves a bad taste in the mouths of consumers. Developing and maintaining an open, constructive dialogue with government, including showcasing innovative reformulations, will be a far more effective approach. Framed in this way, industry will be able to better make the case that a proportionate approach to SDIL and wider reforms will deliver positive health and economic change.

If you would like to discuss the sugar levy and the government’s public health agenda in more detail, please contact GK Associate Director David Mitchell at: david.mitchell@gkstrategy.com

A fork in the road for food security

GK Senior Adviser James Allan considers the publication of the Food Security Report and why the opportunity is ripe to engage with ministers and officials holding the pen on the food strategy due for publication in 2025.

The government has published its three-yearly Food Security Report and it is hefty. Five themes covering 16 sub themes and 37 indicators ranging from food crime and pathogen surveillance to physical access to food shops and consumption patterns. Ministers had chosen to delay the publication of the report in hope of avoiding the farmers in protest against the £1m cap to Agriculture Property Relief introduced at the autumn budget. But this issue has not abated. Tractors returning to Westminster on the day of publication detracts from the business of government and its work to address food security.

The report’s headline finding is that those disadvantaged across society, including low-income households and people with a disability, are less likely to meet government dietary recommendations, and this trend has increased. All the while, the UK’s self-sufficiency has remained broadly unchanged in the past two decades, but the risks have heightened. The UK continues to source food from domestic production and trade at around a 60:40 ratio. But digging a little deeper, the UK is highly dependent on imports for fruits, vegetables and seafood – all sources of micronutrients essential to balanced and healthy diets in the fight against rising levels of obesity.

The risks to food security and self-sufficiency are numerous: climate change, nature loss, water insecurity, labour shortages and geopolitical events, the list goes on. More than this, these risks are interconnected with both acute and chronic impacts which trigger and compound each other. One can easily imagine a shortage of rice on British supermarket shelves if an extreme weather event, compounded by increased geo-political tensions, threatens the 46% of rice that is imported from India and Pakistan. At home, declining levels of natural capital are somewhat slowing, but boosting domestic production will mean prioritising and funding sustainable farming practices that restore and preserve our ecosystems to fully reverse this trend. Such schemes are not cheap for a government navigating tight public finances, as the second phase of a comprehensive spending review has kicked off with the Chancellor asking government departments to find 5% efficiency savings.

What’s new?

The government is set to adopt a “systems approach” which will focus minds on the outcomes of the whole system from production to consumption. Defra secretary Steve Reed is also promising a new way of engagement with not just sector and industry leaders, but also academics and charities to corral collective ambition, influence and effort. For food producers and retailers, this is a seismic opportunity to leverage your consumer and business story for a political audience that is in listening mode.

Pulling this off will be the test of ministers and officials drafting the government’s new food strategy due for publication in 2025. Why? Because if this Labour government is truly socially minded, addressing food insecurity will be a political priority. Doing so will aid better health and educational outcomes thereby reducing the burden on schools and the NHS, both of which are areas the Labour party self-identifies as being custodians of.

For investors, having a clear understanding government workstreams toward food security will be important. Investment decisions will need to be considered in the context of UK self-reliance in the food and energy sectors, but especially where technological innovation better position investors to capitalise on emerging trends, ensure long-term sustainable returns, and help shape a more secure and resilient national food system.

While spectators might eagerly await the publication of the government’s food strategy next year, the opportunity to engage is now.