Spring Forecast offers struggling pharmacies ‘little comfort’

Pharmacies facing cost increases could find ‘little comfort’ in the Chancellor’s Spring Statement, sector leaders have said.

Rachel Reeves yesterday delivered an update on her plans for the UK economy, insisting the ‘government has the right economic plan for our country’ and had restored economic stability in a world that had become more uncertain.

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But the chief executive of the National Pharmacy Association (NPA), Henry Gregg, said the government was prioritising business rate relief for pubs over providing support for struggling pharmacies.

Unlike pubs, cafes or restaurants, pharmacies cannot increase their prices to absorb the ‘eye watering’ business rates rise because they receive 90% of their funding from the NHS, Mr Gregg added.

He added: ‘Pharmacies are essential to their communities, but the government has taken decisions to prioritise business rates support for pubs over the health needs of millions of people who use pharmacies every day.

‘The government must urgently use some of their budget headroom to stabilise pharmacy finances or risk more pharmacies closing for good and leaving others with no choice but to cut back patient services.’

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Dr Leyla Hannbeck, chief executive of the Independent Pharmacies Association (IPA), echoed his concern about business rates and rising costs – which follows a Treasury announcement in January that pubs and music venues in England will receive a 15% discount on business rate bills from April, plus a two-year freeze in real terms.

She said she was ‘deeply disappointed’ and ‘shocked’ by the Spring Statement which offered nothing to offset the rising costs that businesses, including community pharmacies, will be grappling with in April.

She added: ‘With the situation in the Middle East already set to hit energy prices, these rising cost pressures are only set to increase, putting pressure on our community pharmacies that are already struggling financially due to years of underfunding. Many are currently operating at a loss.

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‘Pharmacies are shocked that once again the Chancellor has chosen not to extend to high-street pharmacy branches the business rate rebate given to other NHS primary care providers like GPs surgeries and dental practices. Our sector is not being treated fairly on business rates.’

Now that pharmacy contract negotiations have commenced, it is essential that the government provides a fair settlement and makes progress towards closing the current £2bn+ funding gap, Dr Hannbeck said.