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Contractors must claim for ‘every single Covid cost’ or risk subsidising treasury, PSNC warns

pharmacy funding

By Beth Gault

12 Jul 2021

Pharmacists need to put in their ‘best possible claim’ for ‘every’ Covid cost or else the sector will be subsidising the Treasury, the Pharmaceutical Services Negotiating Committee (PSNC) has warned.

Speaking at the NPA conference last week (9 July), the chief executive of PSNC, Simon Dukes, said: ‘Every contractor has to claim. This is really important.

‘We’ve got £370m that’s going to be reclaimed from our sector from 1 October in six instalments through to March 22. It is up to every contractor to put in their best possible claim for every single covid cost because if we don’t, effectively we are subsidising the Treasury over the pandemic and as we know our sector cannot stomach anymore financial cuts.’

It comes as last month PSNC reached a deal with the Government over the costs incurred by the pandemic between March 2020 and March 2021.

Mr Dukes, speaking to the NPA conference, said it had taken ‘months of wrangling’ to get to this point, but that the deal currently was ‘as good as we’re going to get’.

‘It’s been a torturous process, its taken us a year plus to get to the point where we have an offer from the Department of Health (DHSC) and from Treasury on our Covid costs,’ said Mr Dukes.

‘A year ago, the PSNC committee rejected an offer from the Department. That offer was a restricted Covid costs offer. It was only for three months, March to May 2020, it was capped and offset against other things such as the retail hospitality and leisure grant, that just could not happen.’

In the session, Mr Dukes revealed that DHSC had offered an initial window of five weeks to claim the Covid costs, however the PSNC had managed to negotiate that up to six weeks.

Funding cap

The agreement reached by the Government and PSNC has no funding cap, but Mr Dukes said the Treasury will have to review the total cost of claims if they are ‘well in excess of the loan’.

‘The converse is true, and that is that if the claims that we put in as a sector is substantially less than £370m, then quite rightly PSNC and the department will have to have a discussion on what the impact of repaying that £370m is going to be on our sector as a whole – so it works both ways.’

He added: ‘We want and the Department [DHSC] wants and Treasury has agreed that we should be imaginative in providing evidence to substantiate Covid costs. They accept that not everyone will have invoices, not everyone will have time sheets. So, look across the board at what else can be used to substantiate and evidence your covid cost claims.

‘That flexibility should work in the contractor’s favour.’

Mr Dukes added that the PSNC would be ‘taking stock’ as soon as the claims were in, and if the totality is ‘substantially less’ than £370m, then they would ‘push hard for a longer payback period’. It follows estimated from the PSNC in March which found that pharmacies had incurred costs of over £400m due to the pandemic.


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