CPE to increase LPC levy by 2% from April

CPE to increase LPC levy by 2%

Community Pharmacy England (CPE) will increase the amount it collects in levies from Local Pharmaceutical Committees (LPCs) by 2% from April 2025, it has said.

But it told contractors that it expected most LPCs to be able to absorb the levy increase without passing the cost on to pharmacy owners.

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CPE has made the increase in order to deliver its 'key goals and priorities' for 2025/26, briefing notes from its February committee meeting revealed.

These include:

  • any remaining work on the 2024/25 and 2025/26 negotiations and its communication and implementation,
  • ongoing economic work to ensure sector sustainability,
  • engaging with the NHS 10-year Health Plan and Government Spending Review
  • working to improve medicines supply issues,
  • advancing the Primary Care Recovery Plan services.

David Broome, chair of CPE's Audit and Risk Subcommittee, said the negotiator had 'much to do in 2025/26 as it continues in its mission to improve the outlook for community pharmacy'.

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'The national negotiations could not be more critical: our top priority is to deliver an improved contractual framework to address the current funding crisis and secure a stable future.'

He said CPE had 'wanted to do everything possible' to keep any levy increase as low as it could, so had already taken measures to lower its reserves and introduce efficiencies.

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'In reaching a decision on levy, the Committee was also assured that the increase is affordable for LPCs, with the majority not having to pass it on to pharmacy owners, who are continuing to face severe financial pressures,' he added.

CPE also noted its recent guidance issued to LPCs about managing reserves more flexibly, which it said would help them to absorb the levy increase.

How are LPC levies calculated?

CPE told The Pharmacist that the levy it collects from LPCs is proportional to the percentage share of total NHS income available to pharmacy owners in each LPC area.

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For example, if the pharmacy owners in an LPC have 4% of the national FP34C revenue, then that LPC pays 4% of the overall CPE levy.

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This is the same basis as LPCs use to collect the LPC levy from pharmacy owners, and was decided at the Conference of LPC Representatives in September 2022 following the Review Steering Group proposals, which were supported by pharmacy owners, CPE said.

The 2% increase on the total levy represents a £95,000 increase in the amount collected from LPCs overall. This overall increase, combined with the annual redistribution of the levy to reflect the makeup of each LPC, will result in the following changes from April 2025, CPE told The Pharmacist: 

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  • 22 LPCs will see flat or decreases in levy (between 0% to -5%)
  • 22 LPCs will see an increase in levy (between 1% to 5%)
  • 6 LPCs will see an increase in levy (between 6% to 12%)

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