Category Archives: Government

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

Local Elections 2025

The main takeaway from May 2025’s local elections is that Reform UK is now firmly placed among the top players in Westminster. Despite only recently professionalising and mobilising, the party has turned a sea of established Conservative councils a bright turquoise blue. The Conservatives are now rapidly losing electoral support and Reform UK’s Leader Nigel Farage has declared his party the main opposition to the government.

Reform UK’s sharp rise has been evident since last year’s general election. Translating its position in the opinion polls into electoral success has, however, previously been inhibited by the UK’s first-past-the-post voting system. This saw the party win only five seats in last year’s general election despite receiving 14% of the national vote share. Reform UK has since showed no signs of slowing down, with opinion polls increasingly in their favour in the lead up to this month’s local elections. The party was undoubtedly the big winner of the contest, securing 677 council seats, demonstrating its credentials as a serious challenger to the two main parties.

The Conservatives have had the toughest result of all the parties, losing 674 seats overall. Of the 23 councils up for election, they had been in control of 16. Reform UK now control ten, the Liberal Democrats have the keys to three, and a further ten have no overall party control. This is likely to raise questions over Kemi Badenoch’s future as leader of the Conservative Party, although a formal challenge is unlikely to materialise given Conservative MPs’ appetite for stability after a recent series of damaging leadership changes. Conservative headquarters will now have to ensure its strategy is bulletproof if it hopes to fend off the threat of Reform UK and meaningfully challenge the incumbent Labour government at the next general election.

It was not a successful result for the government either, with Labour losing 187 seats. The Party’s only glimmer of hope can come from returning incumbent mayors in Doncaster, North Tyneside and West of England. While Labour had a smaller pool of seats to defend than the Conservatives, meaning its losses were less severe, keeping this trio of local authorities will be hard to celebrate considering Reform UK came a close second in all of them. With a brand new Reform UK MP overturning Labour’s majority of 14,696 in Runcorn and Helsby by a mere six votes, there is clearly serious dissatisfaction with the government’s direction of travel, undoubtedly causing a serious headache for No.10.

Two truths emerged from the first real test of the government: Labour must pull through on delivery for the public if it hopes to keep its position in power come the next general election, and the Conservatives need to figure out how to remain as the main opposition party with Reform UK continuing to gather momentum at pace.

Join us on Thursday 8 May at 9am for our Post Local Elections Webinar with former Treasury Minister Rt Hon David Laws and JL Partners Director Guy Miscampbell to discuss the local election results and what they mean for national politics.

You can sign up using this link.

Milking it! Extending the sugar tax for public health and economic gain

This week the government launched a consultation on its plans to tighten the sugar levy. This follows last year’s review of the effectiveness of the SDIL to date. Chancellor Rachel Reeves strongly hinted that the government was considering broadening the scope of the levy at October’s autumn budget and the consultation document does just that.

The government’s proposals include reducing the minimum sugar content level at which the levy applies from 5g to 4g; removing the exemption for milk-based drinks; and removing the exemption for milk substitute drinks. This means milkshakes, pre-made coffees and many of your favourite fizzy drinks will be reformulated or face becoming taxable.

Initial analysis suggests that over 90% of milk-based products will be affected. Initially exempt because milk is a source of calcium for children, the government’s revised position is that any potential health benefits are outweighed by the negative impact of consuming high levels of sugar.

Although the contents of this consultation come as no surprise to those who have been closely following policymaking in this space, it does set the mood music for the upcoming national food strategy and signals a government unafraid to be heavy-handed when it comes to public health. 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 forced to reformulate products or see their production costs increase. However businesses decide to act in response to changing regulations, the government hopes the result is a significant reduction in the nation’s consumption of sugar.

Obesity costs the NHS around £6.5 billion a year. NHS data shows a deeply concerning trend of rising childhood obesity. Almost 10% of children are now living with obesity by the time they start school and 24% of children have tooth decay by aged five thanks to excess sugar consumption. With obesity taking effect earlier in life, the associated costs for the NHS are set to soar to £9.7 billion by 2050. This is especially bad news for a government grappling with a challenging economic environment and acute pressures on public spending. But for Labour, it feels all the more personal because in the most deprived areas the prevalence of obesity can be almost 15% higher than in the least deprived ones – something that the last government’s food strategy picked up on. Tackling health inequality is a huge part of the government’s commitment to ensuring all children and young people have the same opportunities and start in life.

For industry, there is a fine balance to strike. Full resistance to public health reforms designed to improve the health of our children would leave a bad taste in consumers’ mouths. 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 public health reforms will deliver positive health and economic change.

Now is the time to engage. Those who can successfully demonstrate alignment with the government’s public health goals will be well-positioned for future discussions about the developing national food strategy, which will set the strategic direction of travel for the rest of this parliament and beyond. One thing is for sure, this is unlikely to be the last government intervention in the name of improving the nation’s health.

The consultation runs until 21 July. If you’d like to discuss contributing to it or the wider HFSS policy environment, please contact Lauren on lauren.atkins@gkstrategy.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.

Education and Digital Revolution: AI under Labour

The government is embracing the evolving landscape of artificial intelligence (AI) and attempting to integrate it into the education system. Improving mainstream education and increasing accessibility for young people has been central to Labour’s agenda, with one of the five key manifesto missions being ‘breaking barriers to opportunity’. To address challenges in mainstream schools, ministers are focused on issues such as teacher recruitment and retention. However, in the current economic and political climate, immediate solutions are limited, bar the initial 5.5% teacher pay rise in September 2024. To address these shortfalls in the long term, the government is exploring innovative ways to make the teaching profession more appealing and improve the overall efficiency of educational provision, including the use of AI to support teachers and school administrators.

As the government recognises the potential risks for young children when accessing AI, the introduction of AI into the classroom will be a teacher and administrator facing policy. To mitigate further issues, the government has committed to implementing safeguards. These safeguards include age restrictions on who can use AI tools and filtering and monitoring standards to ensure schools have the appropriate restrictions in place. However, with appropriate regulation, there is potential for expanding the use of AI tools to student facing use in supervised educational environments. Stakeholders and developers should anticipate these restrictions and the potential expansion from a teacher facing policy to one that includes students when developing AI models for educational settings.

AI models in education will focus on generative AI, with applications across various teaching and learning functions, such as creating educational resources, curriculum planning, feedback, revision activities, administrative tasks and supported personalised learnings. The government is also likely to encourage the introduction of other AI tools outside of the classroom that can enhance efficiency in schools and reduce administrative burdens. The new technologies and tools will likely require additional skills training for teachers and support staff. Organisations that provide the necessary training in this area, alongside the development of AI, are likely to be viewed favourably by government and schools.

To ensure a safe and responsible introduction of AI into the classroom, the government is collaborating with educational technology sector, experts and academics. As part of this dialogue, the government is piloting the EdTech Evidence Board to analyse the impact of edtech tools on teaching and learning. The Chartered College of Teaching is delivering the initial pilot scheme and is inviting organisations in the edtech sector to submit projects to the board later this year. This is an opportune moment for education service providers and stakeholders to engage with policymakers, demonstrating how their products can support the government’s educational objectives.

We’d be delighted to share our thoughts on what the government’s approach to AI and edtech could mean for you and how you can engage with the ongoing dialogue. Please contact mariella@gkstrategy.com if you would like to discuss the reforms with the GK team.

Lighting a path to a smoke-free future: the government’s plans to end smoking in the UK

Smoking remains one of the leading causes of preventable deaths in the UK, with over 200,000 smoking-related deaths each year. With the Tobacco and Vapes Bill currently undergoing its legislative stages in Parliament, carving a clear direction of travel for the future of smoking in the UK, businesses have a unique opportunity to align with the government’s public health ambitions and unlock a wealth of new opportunities as part of the national push to reduce smoking rates.

The landmark bill aims introduce a smoke-free generation by banning the sale of tobacco products to anyone born on or after 1 January 2009, meaning affected individuals will never be legally able to purchase a cigarette. While some argue that this is a ‘nanny state’ intrusion into personal freedoms, the main provisions of the bill have long been discussed and were first trailed by the previous Conservative government. There is therefore a consensus across parliament that this is a necessary measure which will deliver long-term benefits to the general public and a struggling public health system.

The rise in demand for healthier lifestyles and the growing number of people looking to quit smoking present significant opportunities for businesses in the health and wellness sector. Companies offering smoking cessation products like nicotine replacement therapies (NRTs), or even digital health apps designed to support quitting, stand to benefit from growing demand for their services. Moreover, businesses that create products that promote overall wellbeing, such as fitness equipment, health supplements or stress-management tools can provide an alternative for individuals who are trying to improve their health after quitting smoking.

Furthermore, with employee wellbeing being a key focus for this government across a number of fronts, including the Employment Rights Bill, incorporating smoking cessation support into corporate health programmes is essential. Offering incentives for employees to quit smoking or providing access to cessation resources can help improve workplace health, increase productivity and reduce absenteeism due to smoking-related illness. Companies that invest in these types of employee-focused health programmes also benefit from a healthier, more engaged workforce.

It was confirmed in December 2024 that the government is investing an additional £70 million in 2025-26 to support local authority-led smoking cessation services. Given this investment, there is an increasing demand for qualified professionals and organisations that can offer expert advice, counselling and support for individuals attempting to quit smoking. Healthcare providers, private clinics or digital health platforms focused on smoking cessation are well placed to position themselves as a partner to government and highlight how initiatives can be rolled out and improved as ministers progress with their smoke-free ambitions.

To support the public understanding of new legislation, those who can offer both creative campaigns and innovative products aimed at raising awareness about the dangers of smoking, or promoting the benefits of quitting should focus on engaging with integrated care boards (ICBs) as they look to manage local service and improve outcomes. A 2023 report from Action on Smoking and Health found that tobacco control was perceived to be an above average or high priority in 14 of the 29 surveyed ICBs, underlining the necessity of appropriately resourcing ‘stop smoking’ services.

The passage of this legislation is not just a step toward improving public health – it is also a catalyst for innovation and business growth. Companies that can align with these objectives, whether by providing smoking cessation products, supporting corporate health programmes or developing creative campaigns have an opportunity to thrive in an increasingly health-conscious market. Given the government’s overall focus on prevention in its healthcare agenda, it is vital that businesses engage with the Department of Health and Social Care, ICBs, NHS trusts and other stakeholders to provide expertise on the rollout and efficacy of anti-smoking campaigns that will form a crucial part of this government’s potentially transformative approach to public health.