Category Archives: Levelling Up

A new UK Prime Minister, potentially a new Energy Secretary – another hydrogen delay?

The ongoing conflict between the US and Iran and the disruption to oil and liquefied natural gas flows through the Strait of Hormuz have reinforced the importance of energy security and independence. Against this backdrop of heightened geopolitical uncertainty, reports suggest that Prime Minister-in-waiting Andy Burnham may be more open to new North Sea oil and gas developments. This could include a potential expansion of the Rosebank oil field (the UK’s largest undeveloped oil field) and the Jackdaw gas field (one of the largest undeveloped gas fields in the North Sea), while also accelerating the deployment of advanced clean energy technologies.

Increasingly recognised as a key part of the UK’s future energy mix, hydrogen (the most abundant element in the universe, accounting for around 75% of matter) is highly versatile, enabling its use in electricity generation, fuel cells, industrial heat and as feedstock for the production of low-carbon fuels such as sustainable aviation fuel. As policymakers seek both energy security and decarbonisation, hydrogen offers a credible alternative to diminishing fossil fuel resources.

Expanding the hydrogen industry is about more than achieving climate goals; it represents a significant economic opportunity. It can create high-value jobs across engineering, manufacturing and energy, while providing a pathway for workers in the oil and gas, chemicals and heavy engineering sectors to transition into low-carbon industries. Hydrogen projects can also drive regional growth by attracting investment into ’industrial heartlands’ and helping to regenerate communities historically reliant on carbon-intensive industries. Looking ahead, the opportunity is substantial, with the global hydrogen market projected to exceed $1 trillion by 2050 according to analysis carried out by Deloitte.

The UK is well positioned to capitalise on this opportunity. It benefits from a strong industrial base, established energy infrastructure and expertise developed through decades of oil and gas activity. Major industrial clusters in the North West, South Wales, the Solent, Grangemouth and the North East provide an immediate and scalable market for hydrogen, particularly for high-temperature industrial processes where electrification is not yet commercially viable. Recognising this potential, the government has sought to attract investment across the hydrogen value chain through measures including the Hydrogen Production Business Model and Hydrogen Allocation Rounds (HARs). It has also committed more than £500 million towards hydrogen infrastructure, including plans for the UK’s first regional hydrogen network by 2031 to support the production, storage and transportation of low-carbon hydrogen.

However, impending policy decisions are creating uncertainty for project developers and investors. HAR1 supported 11 projects (such as Bradford Low Carbon Hydrogen in Yorkshire) and HAR2 shortlisted a further 27 further projects (such as Green Hydrogen 5 in Wales). However, progress has been slower than anticipated, with only a limited number of HAR1 projects advancing towards Final Investment Decisions. Progress on HAR2 has also been limited, as shortlisted projects remain in the Department for Energy Security and Net Zero’s due diligence and cost assurance process, with developers still lacking clarity on when that process will conclude. At the same time, the revised Hydrogen Strategy, originally expected in autumn 2025, remains delayed.

The combination of these delays and a lack of policy clarity have created uncertainty for developers and investors. Many project developers continue to commit substantial resources towards land, planning, engineering, grid connections and supply chain engagement while awaiting clearer signals from government. If this uncertainty persists, it risks slowing project deployment, discouraging participation in future allocation rounds and weakening the UK’s attractiveness as a destination for hydrogen investment.

With a new Prime Minister and potentially a new energy secretary, important questions remain: Will the long-awaited Hydrogen Strategy face further delays while ministers review priorities? Will it provide a clear vision for where hydrogen can deliver the greatest economic, technical, environmental and societal value? The UK has a significant opportunity to become a leader in the global hydrogen economy, but realising that potential will require clear, timely and credible policy signals from government.

If you would like to discuss GK’s public affairs offering and how policy developments may impact investment in emerging energy technologies, please contact Brett Morton at brett.morton@gkstrategy.com .

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).

Maternal Health: Where does the government go from here?

In September 2024, Secretary of State for Health and Social Care Wes Streeting labelled the state of maternity services in England a ‘cause for national shame’, describing it as one of the ’biggest issues that keeps him awake at night’.

His comments followed the publication of a damning report by the Care Quality Commission (CQC) which brought together findings from 131 inspections and found that almost half of maternity units inspected were rated as ‘requires improvement’ or ‘inadequate’. The report called for increased national action and ring-fenced investment into services, warning that poor quality NHS maternity care will become normalised if action is not taken.

In January 2024, the APPG on Birth Trauma launched an inquiry to investigate the factors in maternity care that contribute to birth trauma and develop policy recommendations. By May, the APPG’s report, Listen to Mums: Ending the Postcode Lottery on Perinatal Care, presented findings from over 1,300 submissions by women recounting harrowing stories of inadequate and traumatic care. The report identified an overwhelming narrative that women felt belittled, ignored, and neglected at a time when they were most vulnerable, and concluded that a base standard in maternity services is needed across the UK.

Streeting has inherited a bleak forecast: urgent need for reform; mounting pressures on the NHS as a whole; and a poor fiscal climate. So where does Labour go from here?

Labour’s 2024 election manifesto promised to ensure that NHS trusts failing on maternity care are ‘robustly supported into rapid improvement’, to train thousands more midwives as part of the NHS Workforce Plan, and to set an explicit target to close the black and Asian maternal mortality gap.

However, the party’s manifesto lacked any concrete policies aimed at fixing the broken maternity system. This means all eyes now turn to the government’s 10-Year Health Plan, due to be published in spring this year, as the potential roadmap for change.

While the plan will focus on prevention, the transition from hospital to community care, and the digitalisation of health services, the government has given no indication of whether it will give maternal health the attention it desperately needs.

Despite rising demand, current services are stretched and under-resourced, meaning many women face significant delays receiving the support they need, if they receive it at all. Investing in early intervention, services that understand the needs of new and expectant mothers, and workforce growth is essential to ensuring that patients can access timely and effective support.

Various campaign groups are putting pressure on Streeting to make improving maternal health services a priority. The Maternal Mental Health Alliance is calling for all parties to demonstrate their support for new and expectant mothers. The Alliance claims ‘there is a vital opportunity for the new government to create positive change for current and future generations.’

The 10-Year Health Plan provides the government with the opportunity to address the alarming findings from both the CQC and APPG on Birth Trauma, restore public confidence in NHS maternity services, and show its commitment to fixing the systemic issues within maternal care. Inadequate support has devastating effects on families and adds huge costs to the UK economy, meaning it is vital that organisations engage with the government during the development of the 10-Year-Health Plan to ensure maternity services receive the focus they need. By leveraging industry platforms and policy development support, advocacy campaigns can emphasise the importance of maternal health and the challenges faced by women.

To discuss the government’s plans for maternal health in more detail, please contact Annabelle Black at annabelle@gkstrategy.com.

What does the Renters’ Rights Bill mean for the future of rented housing?

GK Associate Director, Will Blackman, explores what the government’s new Renters’ Rights Bill means for the future of rented housing in England.

The government’s Renters’ Rights Bill completed its passage in the House of Commons this week and is expected to receive Royal Assent in the coming months following the completion of its Lords’ stages. What does this significant piece of legislation mean for the private rented sector and the housing market as a whole?

The origins of this bill go back several years. The Theresa May government in 2019 first consulted on reforms to rebalance the rights and responsibilities of landlords and tenants, which included the ability of landlords to issue Section 21 notices, or so-called ‘no-fault’ evictions. This change continues to sit at the heart of the bill and is intended to give greater stability and security of tenure to tenants. It also provides landlords with reformed and expanded grounds for seeking possession of their properties under Section 8 of the Housing Act 1988. This includes cases where the landlord wishes to sell or to move into the property themselves. Other measures include stricter requirements around rent increases, the creation of a new ombudsman, new requirements on landlords to remedy mould and damp problems and a new right for tenants to request a pet.

The last Conservative government introduced its own version of this legislation – the Renters’ Reform Bill – however this fell away following the dissolution of Parliament ahead of the General Election. The Labour government’s version of the bill – now the Renters’ Rights Bill – includes some significant differences to its predecessor, almost all to the benefit of tenants rather than landlords. For example, tenants must now be in three months of rent arrears before landlords can seek possession, rather than the two months proposed by the Conservatives; the grace period after which landlords can seek possession in order to sell the property has also been doubled from six to twelve months and the notice period extended from two to four months. Moreover, the current version of the bill gives tenants new rights to terminate a tenancy from day one with two months’ notice – something previously not allowed under the last bill until at least four months after a tenancy started. This would have effectively created a minimum six-month term.

These reforms are the most significant changes to the regulation of the private rented sector for over 35 years. The residential landlord sector has been careful not to be seen opposing the legislation outright given the unhelpful optics around this. However, many individual landlords are concerned that the balance has tipped too far away from them, potentially leaving many unable to take back possession of their properties in reasonable circumstances. Court backlogs have provided an additional layer of concern, with delays in processing evictions claims already persisting in many parts of England, with many landlords calling for significant improvements in order to allay their concerns.

Some industry leaders such as Propertymark and the National Residential Landlords Association have warned that the proposed provisions could lead to landlords withdrawing from the sector, in turn limiting supply and driving up rents. The Ministry of Housing, Communities, and Local Government’s own impact assessment does not predict an exodus of landlords from the sector. Indeed, landlords have been subject to a raft of regulatory and tax changes since 2015, but these have not resulted in significant divestment from the private rental market, which many had predicted at the time.

However these changes play out in the long term, individual and institutional investors in the private rented sector will need to grasp this new regulatory landscape quickly, especially given its wide-ranging impacts for the sector and the prospect of significant disruption to their portfolio. It is the case that home ownership remains unaffordable for many and this is unlikely to change in the near term. However, as the government looks to tip the balance in favour of tenants, it is vital that investors engage with the new regulatory landscape to ensure they are well prepared and can take steps to insulate themselves from any emerging risks.

To discuss the government’s housing policy reforms in more detail, please contact Will Blackman at will@gkstrategy.com

Unlocking the built environment

Angela Rayner has unveiled two flagship pieces of policy that will shake up planning policy and the local government architecture to get growth going. Senior Associate Sam Tankard takes a look at what impact this might have for businesses that operate in this sector.

Housing, planning and the local government system have long been identified by Keir Starmer’s Labour party as major constrictions on growth, and he has talked before about taking a “bulldozer” to the planning system. His Chancellor Rachel Reeves has also cited the desire to get Britain building as a key, and relatively low cost, lever to unlocking growth. Over the last week, we’ve seen the culmination of this with Angela Rayner, arguably one of the most powerful cabinet ministers, presenting her two-step solution to injecting impetus into councils and the wider built environment.

Backing the builders

The updated National Planning Policy Framework was published on 12 December and is seen as the key to unlocking 1.5 million new homes. The most significant change is to mandatory housing targets which will see many councils, particularly leafier constituencies and suburbs, deliver as many as 5 times the number of new homes per year than they currently are under Local Plans, as she calls on councils to all do their bit to meet their housing need, as the question is shifted to “where the homes and local services people expect are built, not whether they are built at all.”

The Government sees prioritising low quality “grey belt” as key to this housing mission and is supporting these new changes with £100m for extra planning officers to speed up and deal with bottlenecks in the system.

Tackling the blockers

The structure of councils has been long overdue a refresh and given how many of this Labour parliamentary party come from local authority backgrounds, it is no surprise to see a Labour Government bring forward a “devolution revolution”.

The English Devolution White Paper – which will form the basis of the English Devolution Bill in 2025 – proposes more powers for combined Authority Mayors who will receive new integrated funding settlements covering housing, growth, retrofit, transport and skills and employment as the Government wants to empower local leaders and shed Whitehall control. However, Rayner will still have increased call in powers if significant projects are not making necessary progress.

It is also clear the Government hopes this will deal with some of the inefficiencies in the way councils deliver public services and procure contract support, which will be welcome to businesses who support local authorities. As such, many two-tier council areas will be replaced by unitary authorities, where boundaries are hindering ability to deliver public services.

Growth unlocked?

Rayner will hope that these reforms will address the bureaucracy that Whitehall and local government process has burdened on public service and housing delivery, and help unlock the investment desperately needed across huge swathes of the built environment. If successful therefore, businesses operating at this intersection of housing and councils should take confidence that healthy opportunities are on the horizon. The next challenge will be where will all these builders and engineers come from…

Adult Education: A Model for Devolution?

GK Adviser Rebecca McMahon explores the localisation of adult education and whether it could provide a template for devolution plans in other policy areas.

A rare win for the Levelling Up agenda?

Over the last 13 years, a series of Conservative governments have made various stabs at improving regional inequalities, and by the time of the Levelling Up White Paper 2022, there was a consensus that at least some form of devolution is necessary to heal regional divides and accelerate British growth.

However, plenty of obstacles remain in the way of a strong devolved power system in the UK, stemming both from central government (particularly due to reservations held by the Treasury) and local government (whose various financial difficulties over the last year have undermined their case for greater responsibility over policy and fiscal decision-making.) Plus, recent high-profile blows to the Levelling Up agenda – notably the collapse of the multi-billion HS2 project at the end of last year – have created further setbacks.

However, one of the more successful devolution efforts has materialised in the seemingly unexpected domain of adult skills. The Government kickstarted the devolution of the Adult Education Budget in the 2019-20 academic year, transferring decision-making powers over the pot of money to six Mayoral Combined Authorities (MCAs) plus the Greater London Authority (GLA).

Since then, a further three MCAs have been handed these powers, and the trend of devolution suggests that more deals are to take place in the near future. The success of ‘trailblazer’ deals in Greater Manchester and West Midlands makes this more likely. The Chancellor, Jeremy Hunt, confirmed that the North East MCA would also receive a deal as part of the continued ‘Skills for Growth’ agenda.

Labour’s thinking on Adult Education

Central to Labour’s skills agenda is the replacement of the Apprenticeship Levy with the Growth and Skills Levy. Notionally, this points to a more flexible skills and training landscape, with accommodation for all types of learners.

However, some people have expressed concern about the sustainability of this proposal, suggesting that an altered levy would be a step in the wrong direction for apprenticeship uptake, at a time when other viable further education alternatives seem more important than ever. In terms of devolution, Labour have made a lot of noise about their commitment to the cause, threading it through various ‘missions’ upon which they have built their policy agenda, and publishing high-profile reviews by legacy figures like Gordon Brown which showcase their support. But in practice, the landscape is less certain, owing to Rachel Reeves’ fiscal ‘iron fist.’ Given the pressure that the Shadow Chancellor placed on Keir Starmer to backtrack on their flagship £28bn pledge to the green economy, she will be hesitant to hand over budgetary responsibilities to local authorities given their recent track record on finances.

The increasing localisation of adult education budgets in the UK somewhat offers a model for the Government and potential future governments to further the devolution agenda. However, any party will inevitably face a gamble on whether to trust local authorities with increasingly large pots of money and whether this will ultimately reap long-term rewards.