GK Strategy is pleased to share its ‘Health Policy Spotlight’ report which sets out some of the key health policy trends to watch out for in 2025 as we look ahead to the government’s eagerly anticipated 10-Year Health Plan.
The report can be accessed here: Health Policy Spotlight – GK Strategy – March 2025
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).
Steve Brine @BrineHealth is a Strategic Adviser at GK Strategy. He was a Health Minister (2017-2019), Government Whip, and is a former chair of the Health & Social Care Select Committee. Here, he reflects on the future regulatory landscape for adult social care.
Context is everything when it comes to social care. Well, almost everything because you can’t forget the politics. On one hand, despite a grand pledge in the Labour Party manifesto to “undertake a programme of reform to create a National Care Service”, we have nothing happening at all.
On the other we have the Dash Review (and now Dash 2.0), the Ten Year Plan, the next phase of the spending review and of course, the Budget which brought a further £600m to prop up the service.
Taken on face value, a national care service is of course a very (very) big deal. This could literally mean the nationalisation of the entire social care sector – akin to how local voluntary hospitals were brought under national public ownership in the 1940s – or it could mean, well, whatever you want it to. Perhaps that’s the point. The truth is, right now, we’re none the wiser and nor I suspect are Ministers.
More immediate, not least for investors and those looking for a little certainty in the sector, is the major NHS Ten Year Plan consultation launched last week. As I understand it, everything is in scope for this programme of work led by Paul Corrigan and Sally Warren with the exception of, wait for it, adult social care. Meanwhile, the Dilnot reforms have been kicked down the road (again) which means the spending cap will now not be introduced next year as planned. Andrew Dilnot is reportedly furious and the great immovable object of NHS reform seems further away than ever before.
What we do know is Penny Dash is in the ascendancy with this government. Shortly after Lord Darzi produced his 163-page diagnosis of the NHS, Dash published her full report into the operational effectiveness of CQC. The Dash review found significant failings in the organisation which it said ’has lost credibility in the health and social care sectors’ and led Wes Streeting to say it was no longer fit for purpose. It found that the CQC’s ability to identify poor performance and support quality improvement has deteriorated and says this has undermined the health and social care sector’s capacity and capability to improve care.
Alongside Dash, a parallel review was led by Prof Sir Mike Richards (former chief inspector of hospitals) looking at CQC’s controversial single assessment framework. Sir Mike (one of the best officials I worked with while a Minister) recommends a fundamental reset of the organisation and a return to the previous organisational structure, with at least three chief inspectors leading sector-based inspection teams at all levels.
And as if that weren’t enough, Dash gets a 2.0 moment as this month we learn the way patient safety is regulated and monitored is to be completely overhauled in England. With the swoosh of a Minister’s pen; the CQC, the National Guardian’s Office, Healthwatch England and local Healthwatch services, the Health Services Safety Investigations Body, the Patient Safety Commissioner and NHS Resolution are all set to be reviewed.
Whatever the future of Henrietta Hughes (the Patient Safety Commissioner) or Helen Vernon (who leads NHS Resolution) one name here is to stay is Julian Hartley. Currently Chief Executive of NHS Providers he will take over as the head of the CQC in December. Julian is a smart appointment. A nice guy (but don’t be fooled) who exudes calm and is fiercely organised. He will find an organisation on its knees and I am sure a massive rebuild on his hands.
It is clear that Penny Dash has listened to the voices of care providers, resulting in a clear set of recommendations so Julian Hartley will benefit from that oven-ready piece of work. Equally, I suspect the Richards review findings will not meet too much resistance. Expect a re-set to a standardised approach to inspections and for line management of such to come back under the auspices of the Chief Inspector of Hospitals. I wouldn’t be surprised to see a completely re-born and re-branded CQC that focuses on safety as well as efficiency, outcomes and use of resources – you can be sure Rachel Reeves will make that a red line.
Ministers will, in my experience, find that the desire to do the Ten Year Plan minus adult social care doesn’t survive contact with political reality. And so between now and the Spring, and indeed the final throes of the comprehensive spending review to come, furious negotiations between DHSC, Angela Rayner (who is responsible for council funding) and HMT are the order of the day.
And when all is said and done, we will find out whether the work of change has great substance or everything looks and feels very familiar.
Images: Seb Wright Media
For a roundtable event held in July 2024, hosts Hannah Haines (Head of Healthcare Consultancy, Christie & Co), Michâela Deasy (Head of PR & Comms, 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 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 as a result of funding challenges across the country.
Below are some of the key highlights from what was discussed around local authority funding and its impact on the future of social care.
According to the Local Government Information Unit, 50% of local authorities (LAs) have reported that they are likely to be bankrupt in the next five years, with 9% predicting they would be bankrupt in the next 12 months. This is already the case for a number of LAs, including Birmingham. These struggles are not going to be resolved without fundamental reform – of how services are delivered at a local level, or how they are funded.
To address the funding challenges they are facing, most LAs have identified areas to make direct cost savings. For example, many have confirmed that they will make budget cuts relating to parks and recreational spaces. Although this may not directly impact the social care sector, it could end up affecting the mental health of the communities that rely on these facilities. Meanwhile, 16% of LAs said they are looking to reduce spending in adult social care, 12% in children’s care services, and 10% in SEND, though statutory services will be better protected from funding cuts.
… For the full article on the Christie & Co website, click here.
To find out more about the team’s next roundtable event, contact Michâela Deasy: michaela@compasscarterosborne.com
Education with Edward Timpson MP
In the inaugural episode of the GK Strategy Podcast, David Laws, GK Strategic Adviser, spoke with the former Children & Families Minister, Edward Timpson MP, about the future of special educational needs and disability policy.
The lively discussion covered everything from SEND policy to social services, with Mr Timpson offering insight into the reform to SEND services and the current policy environment across social care.
Mr Timpson spoke specifically on the 2014 Children and Families Act which he helped push through Parliament. He noted that the legislation “still stands up to scrutiny” 10 years after it was passed and serves as a blueprint for joining up and improving services across education, health and social care. However, he also described some of the challenges associated with the legislation’s implementation, which has led to many parents having vastly different experiences with the SEND system.
During the episode, Mr Laws and Mr Timpson brought to light the “tough” spending environment across the education sector, highlighting the need for increased funding from central government. However, they also touched on other issues that have impacted SEND provision, including the capacity within the workforce, the importance of educational psychologists, SEND ‘deserts’ and out of area provision, and the extent to which mainstream settings should take on more responsibility for SEND provision.
You can listen to the full episode on Spotify here.
The GK Strategy team is delighted to publish its latest ‘What would Labour do?’ report. This time, our expert team focuses on health and social care, with both sectors likely to be hotly contested in the run up to the election. Find GK’s latest report here: What would Labour do – Issue No.4