Key Summary
- Without a sustainable funding and operating model, the CPE expects many community pharmacies to close down
- The closures would lead to the deterioration of healthcare services and put NHS recovery plans at risk
- CPE urged the government to take urgent steps to close the current £2 billion funding gap for the sector
Community Pharmacy England estimates that the impact of the National Living Wage increase on the sector will be £69-94 million per year, and it has expressed serious concerns about the long-term outlook for community pharmacies.
It lamented that there is no clarity in the Autumn Budget, presented by chancellor Rachel Reeves, on how the financial pressures faced by community pharmacies will be addressed.
Without clear progress towards a sustainable funding and operating model, pharmacies face mounting financial strain.
This also limits their ability to provide advice, treatment and essential medicines to patients and the public, it added.
On the other hand, the Budget has introduced further cost pressures, including higher staffing costs driven by the National Living Wage increase.
It pointed out that while the living wage has more than doubled over the last 15 years, increasing by 109 percent from 2011 to 2026, core funding for pharmacies has fallen in real terms over the same period.
Unlike many other industries, pharmacies cannot pass rising costs on to patients, and have to absorb the inflationary pressures and workforce shortages.
Without a sustainable funding and operating model, which Ministers agree is needed, the CPE said it expects many community pharmacies to close down.
This would lead to the deterioration of services and put patient access and NHS recovery plans at risk.
The Government’s 10-Year Plan stresses the critical role primary care will play in shifting activity from hospitals into the community.
But unless the sector’s funding gap is addressed, these reforms are inconceivable, it added.
It urged the government to take urgent steps to close the current £2 billion funding gap for the sector.
Technology funding
Regarding the £300 million of additional capital investment in NHS technology announced in the Budget, the CPE said that greater digital integration could streamline referrals, improve access to patient information, allow more efficient data flow and communication between NHS professionals, and support expansion of clinical services delivered in community pharmacies.
However, this will need to include investment in community pharmacies’ digital infrastructure to enable their full participation in digital health initiatives, it added.
CPE chief executive Janet Morrison said, "A fully supported community pharmacy network would have so much to offer patients and to help deliver the 10-Year Health Plan, offering a wider range of clinical services and helping to shift care closer to home.
"But this can only happen if pharmacies are economically viable. The impact of this Budget must be mitigated, and we must make progress towards a sustainable operating model for pharmacies, to prevent pressures from derailing the vision for the future."
