The National Pharmacy Association (NPA) has called for extra investment in the sector to avoid staff lay-offs following the Chancellor’s announcement of a national living wage increase, saying that community pharmacies cannot meet it due to ‘years of underfunding’.

Community pharmacy contractors, like all employers, must pay all employees aged 23 and over the national living wage. It currently stands at £9.50/hour but in today’s budget statement, the Chancellor of the Exchequer announced that it will be increased to £10.42/hour from April 2023.

The NPA said that the resulting rise in wage costs could lead to cut-backs and pharmacy closures, citing a prediction that wage inflation and other cost pressures could combine with funding cuts to lead to cut-backs and pharmacy closures, as found by a report recently commissioned by the NPA and carried out by Professor David Taylor from University College London.

One NPA member said that the change to the national living wage would mean an increase in £300k per annum in salary costs across his regional group.

‘To keep level, we will need to reduce the equivalent of 17 full time employees in the company. Not sure where we can do this, as we are really tight already,’ the member said.

Olivier Picard, NPA Board Member and owner of Newdays Pharmacy in Buckinghamshire said that he thought that his staff were ‘rightly deserving of a pay rise’ and he was ‘well willing to give that’, but that he was ‘genuinely worried about the business going forward’ due to pressures including the cost of medicines exceeding reimbursement prices.

Mark Lyonette, NPA Chief Executive, said that the NPA welcomed the commitment in today’s budget to increase the NHS budget, adding: ‘it’s only right that community pharmacies, which have been the front door to the NHS, benefit from this investment.’

The Chancellor promised to increase the NHS budget by £3.3bn per year for the next two years, which he said that NHS chief executive Amanda Pritchard had said should be ‘sufficient funding for the NHS to fulfil its key priorities’.

He also allocated social care additional grant funding of £1bn next year and £1.7bn the year after to 'help free up some of the 13,500 hospital beds that are occupied by those that should be at home.'

Mr Hunt said the total package for health and social care reached 'a record £8bn'.

Mr Lyonette said that community pharmacies are now experiencing their eighth year of real-terms cuts, and could not continue providing NHS services, medicines and advice while ‘running on empty’.

‘Our members are under massive pressure in terms of inflated costs and funding cuts. They are having to make cut-backs, just at the very moment their help is needed to get the NHS back on its feet after the ravages of covid’, he said.

‘The sector needs new investment to make sure it can continue to help the people who rely on them for a great service, and to keep pressure off GPs and hospitals, especially as we now face winter.’

Other pharmacy leaders voiced concerns about the economic forecast set out in today’s autumn budget statement, in which the Chancellor cited the judgement by the Office of Budgetary Responsibility that the UK is now in recession.

Paul Day, director of the Pharmacists’ Defence Association, said PDA members employed by the NHS ‘were hoping for something positive regarding their pay’, but added that ‘this statement’s impact is wider than just public sector workers’, and ‘how the economy performs impacts upon all pharmacists’.

He added: ‘What will be of immediate concern to our members, wherever they practice, is that the Office for Budget Responsibility say that real household disposable income per person to fall more than 7% over next two years.

‘From students to retired members, everyone is already impacted by the cost-of-living crisis and this will be the biggest fall since records began in 1956-7 and take incomes down to 2013 levels.’

Leyla Hannbeck, chief executive of the Association of Independent Multiple Pharmacies, called this 'the most unstable period in our recent history', as a consequence of 'a five year flat funding arrangement that fails to account for inflation, higher drug costs or costs of living'. She said that many community pharmacy businesses are 'struggling to maintain their heads above water today never mind tomorrow' and that 'further financial pressures or costs on our sector and small businesses will only accelerate the demise of community pharmacies.'

She said that community pharmacies 'bleed cash on a month by month basis' as 'unlike other sectors we cannot pass the inflationary costs on to our patients'.  She added: 'The NHS needs to invest in community pharmacy as a key player in primary care if they want a more efficient, productive NHS that can address the bottle necks and the demand pressures in the healthcare system.'

Janet Morrison, chief executive of the Pharmaceutical Services Negotiating Committee, said that the funding increase for the NHS was 'much-needed' and 'welcome', but added: 'it’s critical that community pharmacy receives its fair share of these monies'.

She continued: 'While NHS budgets have continued to tick upwards, pharmacies have faced significant real-term cuts since 2015 leaving contractors and their teams making unsustainable efficiencies to maintain service levels.

'Despite all the challenges, pharmacies have delivered all that has been asked of them, but enough is enough: pharmacies have been squeezed to their limit, and this is now having a worrying impact on patients as well as on the health of contractors and their teams.

'Government and the NHS must put this right by investing in pharmacies now to support services that patients need and value, to relieve pressure elsewhere in the NHS, and, in the long-term, to save the health service money.'

The Company Chemists' Association also called on the Government to 'set out their plans to improve primary care access without delay', saying that this 'will be impossible without investment for community pharmacy'.

It added that the community pharmacy network is 'on the brink of collapse' following a 25% real terms decrease in funding, spanning eight years, and predicting rising demand that 'can only be met through additional funding'.

It also said that the NHS workforce plan, due to be published next year, must include pharmacists, including community pharmacists. 'Policymakers need to urgently recognise the difficulties pharmacy businesses of all sizes are facing in finding pharmacists. The sector desperately needs a comprehensive picture of the forecasted community pharmacist workforce.  Any plan must be supported by clear actions to reduce the demand on and increase the supply of pharmacy professionals,' it said.

Thorrun Govind, RPS England country board chair, said that 'with continued focus on public finances, it is vital that the Government invests in pharmacists and pharmacy teams who will be central to reducing health inequalities, managing the growing cost of long-term conditions, and delivering the best value from medicines for patients and the NHS.

'Developing the workforce for the future is going to be crucial to patient safety and the next generation of pharmacist independent prescribers could transform how we deliver patient care. I would urge the Government to ensure its long-awaited workforce plan commits the appropriate resources to pharmacy education and training.'

She also highlighted the statement's support of science and research to grow the UK economy, saying that 'pharmacists and pharmaceutical scientists will be vital to building on the UK’s position as a world leader in new therapies and technologies.'

This article is being updated.