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Pharmacies could be forced to cut their opening hours or close completely if they are not shielded from the tax hikes and increased national living wage announced in the Budget, leaders from the sector have warned. It comes as analysis by a representative body claimed the uplifts could lead to an estimated £200 million a year in unplanned costs. A number of organisations representing pharmacists have joined forces to urge Health Secretary Wes Streeting to intervene.
In October, Chancellor Rachel Reeves increased the rate of employers’ national insurance contributions by 1.2 percentage points to 15% and slashed the threshold at which the tax starts being paid from £9,100 to £5,000 to raise £26 billion a year. She also announced the national living wage will rise by 6.
7% for employees aged 21 or older – from £11.44 an hour to £12.21 – from April.
The measures sparked concern to some in the healthcare sector, including pharmacists, GPs, care homes and hospices. Now, analysis carried out by Community Pharmacy England (CPE) claims the NI increase could cost an estimated £50 million, while the increase in the national living wage could cost between £115 million and £152 million. The organisation, along with the National Pharmacy Association (NPA), the Company Chemists’ Association (CCA), and the Independent Pharmacies Association (IPA), have written to the Health Secretary to express their fear that, without mitigation, the measures could push many pharmacies towards insolvency.
Dr Leyla Hannbeck, chief executive of the IPA, warned that the sector is “hurtling towards a disaster” which could “completely undermine any attempt to fix the NHS and shift care into communities”. “The brutal reality is that local pharmacies have to pay their bills,” she added. “Without the mitigating action we call for, these extra costs will be catastrophic for pharmacies.
We need urgent actions before these measures undermine community pharmacies’ ability to help with the NHS 10-year plan.” Nick Kaye, chairman of the NPA, described the Budget as a “hammer blow” to pharmacies across the country. “Unlike most businesses pharmacies cannot pass these costs onto their patients and have limited means to absorb them themselves,” he added.
“Pharmacies are ambitious to expand their role and want to work with the Government to deliver the best possible services for their communities and take pressures from other parts of their health system. “However, they simply cannot do this until these oppressive funding challenges are met.” Janet Morrison, chief executive of CPE, warned the measures will “wreak havoc on an already fragile community pharmacy network”, while Malcolm Harrison, chief executive of the CCA, described the proposals as “short-sighted”.
The letter to Mr Streeting from pharmacy leaders comes after GPs warned some surgeries could make staff redundant or close as a result of the change. Organisations representing care homes and hospices also voiced concerns about the sectors’ ability to plug the funding gap soon after Ms Reeves’ announcement. Earlier this month, members of the NPA voted in favour of collective action in a row over funding.
The trade association said this could mean fewer pharmacies will be open of an evening or at weekends, with some potentially withdrawing from locally commissioned services such as emergency contraception, addiction support and stop smoking services. A Department of Health and Social Care spokesperson said: “Community pharmacy been neglected for years, but it has a vital role to play in the shift of care from hospital to community as we reform the health service through our 10 year health plan. “At the Budget, we announced a £26 billion boost for the NHS and social care.
We are committed to working with the pharmacy sector and we will set out further details on allocation of funding for next year in due course.”.
