Funding cuts equivalent to 12% 'net' loss over 6 months
The government's decision to condense the funding cuts into a six month period means it will have to "claw back" money from contractors, according to accountant Umesh Modi
Government plans to slash the pharmacy global sum will see contractors' net funding fall by 12% for the six months from October, according to a leading pharmacy accountant.
The Department of Health (DH) confirmed to C+D on Friday (January 8) that all of its planned £170 million cut to funding for 2016-17 – amounting to a year-on-year reduction of 6% – will fall between October 2016 and March 2017.
Umesh Modi, partner at accountancy firm Silver Levene, told C+D this effectively means pharmacists will be "overpaid" between April and September, before that money is "clawed back" over the following six months.
"Overall it's 6% [less funding] for the 12 months... but they will lose net [funding of] 12% over six months," he said.
Time to invest
Pharmacists should invest the funding they receive before October into their businesses to dampen the effect of the cuts, Mr Modi said. "If they don't do [that] it's going to get much worse," he told C+D.
The DH said it had decided to fund pharmacies "at the current level" until October to give them "time to prepare" for the cuts.
It will be having further discussions with the Pharmaceutical Services Negotiating Committee (PSNC) about the timing of the cuts, it added.