Autumn Budget 2024: Pharmacies ‘deeply worried' about National Insurance rise

No mention of action to halt pharmacy closure in the AutumnBudget upsets community pharmacies

The new Labour government's first budget has not been well received by community pharmacies, who are ‘deeply worried' about the increase in National Insurance and the national living wage.

They have also voiced their dissatisfaction with the Autumn Budget 2024 for lacking measures to address pharmacy closures.

Commenting on the Chancellor's Budget, Paul Rees, CEO of the National Pharmacy Association (NPA) said: “Millions of people who depend on local pharmacies will be holding their breath today, hoping that the £22.6bn increase in health spending announced by the Chancellor will include money to stem the devastating closure of local health services in the past decade.

“There's absolutely no mention in the Budget of action to halt the closure of our vital NHS pharmacy network, which has been shrinking at the rate of seven a week as pharmacies are forced to close through underfunding.”

According to the NPA, around 700 pharmacies have shut since just the start of 2022 due to the impact of a 40 per cent cut to funding coupled with rising demand. 

Furthermore, he said that the increase in National Insurance and the national living wage will add further pressure on pharmacies that are already struggling to remain open due to funding cuts.

“Pharmacies, already forced to the brink by a decade of real terms cuts, will be deeply worried by looming increases in National Insurance and the national living wage which would impose huge additional costs on their NHS-funded services if the government does not pick up the bill.”

“Ministers have a huge opportunity to transform local health services for the better. We just hope that the detail includes desperately needed funding to halt the decline and realise the immense potential of the pharmacy network,” he added.

Tase Oputu, Chair of the Royal Pharmaceutical Society (RPS) in England, emphasised the importance of investing in pharmacy to enhance healthcare access for patients.

She said: “Pharmacists are crucial to enhancing patient safety and supporting the best use of medicines across the NHS.

“It’s vital we invest in pharmacy so that patients can get the medicines they need when they need them. To provide care closer to home and address health inequalities, patients must be able to access community pharmacies wherever they may live.”

Additionally, she highlighted the pressing need to invest in hospital pharmacy, upgrade ageing facilities, accelerate the roll-out of electronic prescribing, and scrap prescription charges.

“When patients fall ill, they shouldn’t have to worry about the bill. Amid a cost of living crisis and a renewed focus on prevention, I would urge the government to scrap prescription charges and remove an avoidable barrier to accessing healthcare for patients in England.

“The Labour manifesto included a welcome focus on pharmacist prescribing. This must now be backed by appropriate funding to maximise the potential to make a difference for patients.

“As pharmacists continue to play a more clinical role in the health service, we must see a level playing field for financial support for pharmacy students too via the Learning Support Fund,” she added.

Investment in pharmacies key to NHS reform

Malcolm Harrison, chief executive of the CCA, has underscored that importance of investing in community pharmacy to deliver the government’s three big shifts in healthcare.

He said: “It is very likely that increases to employer NIC, the national minimum wage and business rates will further negatively impact on investment and jobs across the pharmacy network.

“As part of her first budget, the Chancellor also announced that funding for the NHS will increase to £181.4bn in 2024-25 and to £192bn in 2025-26.

“If the government is serious about delivering its three big shifts in healthcare; hospital to community, analogue to digital and sickness to prevention, they must now invest in community pharmacies.”

Numark Chairman Harry McQuillan reiterated that for extended NHS funding to truly benefit communities in need, community pharmacy must not only be considered but placed at the core.

"Rachel Reeves started her budget speech by saying 'healthy businesses depend on a healthy NHS'. For community pharmacies, who span both NHS and business, it was a promising start.

"The Chancellor’s announcement of a £22.6 billion increase in funds for the NHS promised to shift focus from hospital to community and a 2% productivity growth. Pharmacy can and should be central to this plan and we look forward to more detail from the health secretary in coming days."

However, he expressed concern that the announced increase to Employer’s National Insurance will place "an unbearable strain" on community pharmacies across the country, especially as "they have no ability to increase the prices they charge the NHS in an attempt to offset this direct tax on pharmacy team costs."

The situation is critical in England and Northern Ireland and will have an impact in Wales and Scotland.

He added that they will work with Community Pharmacy England (CPE) and the health secretary to deliver that change and secure the necessary funding. 

Tony Evans, head of pharmacy at Christie and Co, also remarked that the combined effects of the increases to the National Living Wage and the 1.2% increase to employers' National Insurance contributions will "pile more pressure on cash-strapped pharmacy contractors."

"With the continued uncertainty surrounding the sector’s ongoing funding negotiations, it is now even more imperative that a meaningful funding settlement is agreed upon to enable pharmacies to recover from the five years of real-term cuts whilst offsetting the increased cost burdens announced today," he added.