Category Archives: Public Affairs

Health and welfare reform – will work, work?

The government has made its stance on health and welfare clear. The overarching narrative underpinning the Department for Work and Pensions’ (DWP’s) green paper on welfare reform, published in March 2025, is ‘good work is good for health and being out of work can worsen health’.

Coupled with the Secretary of State for Health and Social Care Wes Streeting’s recent comments that an over-diagnosis of mental health conditions is preventing people from working, it is evident that the government sees work as a key component of the welfare state.

This marks a distinct shift in how work, health and welfare have historically interacted in policymaking. Where once the welfare system was seen primarily as a safety net, it is now being recast as a springboard that supports individuals back into the labour market.

The government recognises that something has shifted in the labour market post-Covid-19. There has been a 45% increase in health-related benefits claimants since 2019-20 and more than 9.3 million people out of work. There are swathes of statistics which demonstrate that Britain’s workforce has not fully recovered from the pandemic and the current level of sickness and absenteeism is unsustainable.

Given the scale of the issue, the government has sought to identify how improving health outcomes might support people into work and enable them to stay there. Ideas such as offering weight loss jabs, dubbed ’jabs for jobs’, were floated at the end of last year. This gives a clear signal that the government is keen to encourage people back into the workplace and is open to non-conventional methods of doing so.

While DWP consults industry and businesses on its planned welfare reforms, an opportunity has arisen for those focused on supporting the government’s vision for work and welfare. Employers should be prepared to play a larger role in supporting the workforce to remain engaged in the labour market. This offers significant opportunities for occupational health providers who can support employers to promote the health and wellbeing of their staff.

Schemes such as mental health and wellbeing programmes will become increasingly common in employment offerings as businesses take on a growing role in a broader, work-led approach to welfare. Occupational health providers who can help fill this gap between welfare, health and long-term employment are well placed to help facilitate the government’s policy objectives.

Reducing economic inactivity is a key priority for the government in its mission to kickstart growth. By implementing supportive workplace schemes and collaborating with private occupational health providers, employers can not only improve individual outcomes but also contribute to broader societal and economic resilience.

The question now for policymakers is exactly how occupational health providers can support businesses to deliver on the government’s objectives for welfare reform. Ministers, civil servants and parliamentarians are keen to understand the art of the possible and how they can work with providers to support workers to remain as active participants in the UK’s workforce.

Please contact Lauren Atkins (lauren.atkins@gkstrategy.com) if you would like to discuss occupational health and the government’s welfare reforms in more detail.

To go boldly: UK Strategic Defence Review 2025

The UK Government has now published its long-awaited Strategic Defence Review (SDR). Speaking at a BAE Systems shipyard on the Clyde, the Prime Minister said the UK military is moving to ‘war-fighting readiness’ and, in step with the wider growth agenda, Sir Keir emphasised a role for the whole country in this new defence enterprise.

This review differs significantly from previous strategic defence (and security) reviews, and its output will be followed closely by allied capitals. It has the potential to be a transformational blueprint, with offensive cyber, technology and autonomy at its centre, to face the ‘new era of threat’.

The SDR was led by the respected former Labour Secretary of State for Defence and past NATO chief Lord Robertson, with an extended external team including Dr Fiona Hill and General Sir Richard Barrons. Commissioned soon after Labour returned to government in July last year, it is the UK’s first externally led defence review. Its aim is to make a forward-looking assessment of the UK’s strategic defence interests and outline the corresponding military requirements. This is no easy ask in such a fast-changing world, which is in part why we also see the early confirmation of big-ticket commitments, including new hunter-killer submarines, a £15 billion nuclear warhead programme to equip the bomber boats, and new long-range weapons.

In the strategic context, the review is clear that both Russia and China are big state threats. It also highlights the growing role the digital world will play in the global defence and security landscape, and the review is the first of its type to put a significant focus on cyber capabilities.

The balance here is between resource and the review’s four lenses: NATO-first; global responsibilities; homeland defence; and hybrid grey-zone activity such as cyber-attacks. Artificial intelligence and drones are transforming modern warfare, so the government has committed to set up a new cyber command with a £1 billion package of investment. There is also good news for MBDA and BAE who will be in line for the new ‘defence factories’ as the UK gets serious about munition supplies, with a £1.5 billion commitment to establish at least six munitions’ facilities.

The Ministry of Defence is still experiencing challenges to frontline budgets and decisions in the government’s upcoming spending review, due to be announced on Wednesday 11 June, will demonstrate No.10 and No.11’s seriousness about putting the SDR’s findings into action.

Friends and adversaries alike will keep a close eye on whether this latest SDR will deliver for UK defence. In the near term, all of us involved in defence and security await the publication of the government’s industrial strategy, expected alongside next week’s spending review, and the many opportunities it will bring to engage with government in the weeks and months ahead.

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

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).