Chancellor convinced reluctant May about pharmacy cuts
Get the latest from the second day of PSNC and the NPA's legal challenge to the funding cuts in England, live from the Royal Courts of Justice in London.
REVEALED: Chancellor convinced hesitant Theresa May over pharmacy cuts
Chancellor Philip Hammond reassured a hesitant Theresa May that the pharmacy funding cuts were necessary, a letter has revealed.
According to the letter – sent from Mr Hammond to Ms May on August 11, 2016 – the Prime Minister was “concerned about the cuts and their potential effects on small and medium-sized enterprises”.
But the chancellor said he had “confidence in the Pharmacy Access Scheme” and stressed the cuts were a “good first step” towards “reforming the inefficient and over-subsidised” community pharmacy sector.
The letter – seen by C+D and revealed in the High Court today (March 22) – was sent just one month after Mr Hammond was made head of the Treasury, and four months before the 12% cut to funding in England came into force.
“I am writing to express my support for taking action,” Mr Hammond said. “The level of government subsidy to community pharmacy is too high.”
Mr Hammond claimed in the letter that £2.8 billion of the £10bn the government spends on “the [pharmacy] system”, is spent on “dispensing £7.2bn of medicines”.
He also recommended community pharmacy follow “trends in other retail markets” – such as the move from traditional bricks-and-mortar businesses “towards scaled-up, innovative supply solutions employing digital technology”. This would help “minimise government expenditure”, he stressed.
Read a copy of the letter here
For the full details of the second day of the High Court pharmacy funding battle, see below.
Welcome to C+D's rolling live coverage of the second day of the pharmacy funding cuts case in the High Court in London. For information on all the key players, as well as how the sector got to this point, read our in-depth summary here.
Follow @CandDAnnabelle for real-time updates on Twitter, or click here to catch up on everything from yesterday's hearing – including the revelations about the secret government meeting that decided pharmacy's future.
For reference, 'AF' is PSNC's lawyer Alison Foster QC, 'JC' refers to judge Justice Collins, and DL refers to the NPA's lawyer David Lock QC. 'JE' is the Department of Health's QC, James Eadie.
C+D's digital reporter Thomas Cox rounds up day two of #CutsInCourt
Andrea James, partner at Knights Professional Services Limited and NPA legal adviser, gives expert legal commentary on today's hearing.
Andrea James @HealthRegLawyer on her case experience after day 2 #CutsInCourt - see Fbook for live video pic.twitter.com/isSdBb3TIv
— Thomas Cox (@CandDThomas) March 22, 2017
The NPA's Stephen Fishwick sheds some more light on the "sensational documents" revealed in court today.
Second of three live interviews post-day 2 #CutsInCourt with Stephen Fishwick streaming on Fbook now pic.twitter.com/HfXnMCRFjb
— Thomas Cox (@CandDThomas) March 22, 2017
NPA chairman Ian Strachan "delighted" with how today's High Court hearing has gone.
See our Facebook for interview with NPA's Ian Strachan on how he's "absolutely delighted" with case so far #CutsInCourt pic.twitter.com/qibYPpDc1M
— Thomas Cox (@CandDThomas) March 22, 2017
Sounds like a heated end to the day! Remind yourselves of the lawyers battling it out in court: https://t.co/Mr85XUIAUo #CutsInCourt https://t.co/5vqqMR2Tam
— Grace Lewis (@CandDGrace) March 22, 2017
Court adjourned for today #CutsInCourt
— Annabelle Collins (@CandDAnnabelle) March 22, 2017
James Eadie and Judge are going head to head over specific point of being in possession of information #CutsInCourt
— Annabelle Collins (@CandDAnnabelle) March 22, 2017
JC into a bit of a spiky exchange with Eadie.
— Mike Hewitson (@MikeHewitson1) March 22, 2017
JE- To decide what material is relevant is up to the decision maker #CutsInCourt
— Annabelle Collins (@CandDAnnabelle) March 22, 2017
'I didn't take you here!' Says AF #CutsInCourt
— Annabelle Collins (@CandDAnnabelle) March 22, 2017
Is JE on the back foot, being quite combative with Mr Justice Collins.
— Mike Hewitson (@MikeHewitson1) March 22, 2017
JE: still arguing about 'what is the legal test'. Hard legal argument to follow as a layman! #CutsInCourt
— Annabelle Collins (@CandDAnnabelle) March 22, 2017
JE trying to box judge in on what it is being asked.
— Mike Hewitson (@MikeHewitson1) March 22, 2017
JC says full information wasn't given #CutsInCourt
— Annabelle Collins (@CandDAnnabelle) March 22, 2017
JE tackling failure to inform #CutsInCourt
— Annabelle Collins (@CandDAnnabelle) March 22, 2017
AF interjects. Impossible to contribute immediately without knowing impact #CutsInCourt
— Annabelle Collins (@CandDAnnabelle) March 22, 2017
JE: The PSNC had opportunity to give counter proposals, they were rejected #CutsInCourt
— Annabelle Collins (@CandDAnnabelle) March 22, 2017
JE "this process went on jolly nearly for a year."
— Mike Hewitson (@MikeHewitson1) March 22, 2017
JE Government should be allowed to govern.
— Mike Hewitson (@MikeHewitson1) March 22, 2017
JC "us unelected judges" he jokes. JE is embarrassed "that was not what I was suggesting".
JE: There was a prolonged process of consultation #cutsincourt
— Annabelle Collins (@CandDAnnabelle) March 22, 2017
JC: I have a history of acting on both sides #cutsincourt
— Annabelle Collins (@CandDAnnabelle) March 22, 2017
JE: We have strands of the decision picked out and challenged #cutsincourt
— Annabelle Collins (@CandDAnnabelle) March 22, 2017
JC: We are living in a time of cuts #CutsInCourt
— Annabelle Collins (@CandDAnnabelle) March 22, 2017
JE has started again. Not much time left this afternoon. Debate around efficiency #Cutsincourt
— Annabelle Collins (@CandDAnnabelle) March 22, 2017
Contact @ChemistDruggist if you'd like to get involved #CutsInCourt https://t.co/YCrOAJzls0
— Chemist+Druggist (@ChemistDruggist) March 22, 2017
Live #CutsInCourt coverage still going strong. @NumarknetMudhar & @davidreissner have shared reactions - https://t.co/kjwT4xDMtd pic.twitter.com/OqoZBdDtLw
— Grace Lewis (@CandDGrace) March 22, 2017
JC: but without fee will there be enough ££ left? #CutsInCourt
— Annabelle Collins (@CandDAnnabelle) March 22, 2017
JE brings up clusters. This is significant in reduction of establishment fee #CutsInCourt
— Annabelle Collins (@CandDAnnabelle) March 22, 2017
Judge: We don't need to consider any Brexit points #CutsInCourt.
— Annabelle Collins (@CandDAnnabelle) March 22, 2017
“The arguments and evidence being presented in the High Court are continuing to show that the funding cuts are questionable to say the least.
"It is so critical right now that we get to the bottom of this and ensure that community pharmacies, and the communities they serve, do not suffer the consequences of an ill-founded decision.”
JE is pointing Judge towards specific paras in his evidence #CutsInCourt
— Annabelle Collins (@CandDAnnabelle) March 22, 2017
James Eadie: These funds are provided and paid for by the tax payer #CutsInCourt
— Annabelle Collins (@CandDAnnabelle) March 22, 2017
JC the SOS ought to have in mind the costs created by closing pharmacies I.e through increased use of GPS.
— Mike Hewitson (@MikeHewitson1) March 22, 2017
Time for the defence... #cutsincourt
— Annabelle Collins (@CandDAnnabelle) March 22, 2017
JC: all this goes back to the adequacy of the submissions to the minister #cutsincourt
— Annabelle Collins (@CandDAnnabelle) March 22, 2017
JC: it cannot be assumed that further evidence was taken into account #cutsincourt
— Annabelle Collins (@CandDAnnabelle) March 22, 2017
JC: one assumes that SoS has 'read their red box' #cutsincourt
— Annabelle Collins (@CandDAnnabelle) March 22, 2017
DL: Howe's accounts stop at point decision went to SoS. How did he make this decision #cutsincourt
— Annabelle Collins (@CandDAnnabelle) March 22, 2017
DL highlights that ring fencing money for sector was not a priority #cutsincourt
— Annabelle Collins (@CandDAnnabelle) March 22, 2017
DL: There is no cross departmental agreement that if there is an underspend on CP budget, future decisions will be taken to maintain funding
— Annabelle Collins (@CandDAnnabelle) March 22, 2017
DL is coming to end of his arguments, Eadie looking at the clock #CutsInCourt
— Annabelle Collins (@CandDAnnabelle) March 22, 2017
DL: the problem is that the decision that had to be made had already been determined 3 months previously #CutsInCourt
— Annabelle Collins (@CandDAnnabelle) March 22, 2017
@DHgovuk's claim it considered effects of #pharmacycuts has taken a battering. Could @NPA1921 @PSNCNews pull off surprise #CutsInCourt win? pic.twitter.com/TmhncshdeL
— James Waldron (@CandDJamesW) March 22, 2017
Department of Health admits that most pharmacies are facing funding cuts of nearly 20% this year, will put 1000's of pharmacies at risk. pic.twitter.com/XzPRl564Vr
— Kevin Barron MP (@KevinBarronMP) March 22, 2017
DL: The is no evidence to satisfy the requirement that the minister paid any attention to the equality impact #CutsInCourt
— Annabelle Collins (@CandDAnnabelle) March 22, 2017
Justice Collins: there is no regard on the impact on protected people urban areas #CutsInCourt
— Annabelle Collins (@CandDAnnabelle) March 22, 2017
DL - The financial decision was already taken by the time the Public Sector Equality Assessment was made. #cutsincourt
— Mike Hewitson (@MikeHewitson1) March 22, 2017
DL Naz Khadeja, speaks 5 languages providing advice to her communities in their language. This has not been considered by DH.
— Mike Hewitson (@MikeHewitson1) March 22, 2017
The languages spoken in pharmacies is an important access point, DL says #CutsInCourt
— Annabelle Collins (@CandDAnnabelle) March 22, 2017
DL: The CP's are supposed to provide advice. There is a section in the assessment about languages #CutsInCourt
— Annabelle Collins (@CandDAnnabelle) March 22, 2017
DL: the assumptions made by officials were not subject to any analysis. #cutsincourt
— Annabelle Collins (@CandDAnnabelle) March 22, 2017
DL: When Parliament brought in the duty of care it imposed it in all levels of NHS #CutsInCourt
— Annabelle Collins (@CandDAnnabelle) March 22, 2017
Back in for afternoon session. DL says DH made assumption services in deprived areas were already adequate #cutsincourt
— Annabelle Collins (@CandDAnnabelle) March 22, 2017
It's the equivalent of saying we can get rid of bricks and mortar GP Practices and Skype from a large shed at the side of the M62! https://t.co/9CwyPe1Ovl
— Peter Burrows (@peyburrows) March 22, 2017
Clear they consider dspnsng a P&P task with no clinical input! Subsidy implies handout rather than prof payment for what we do! #CutsInCourt https://t.co/dw7ifXQiYS
— Nitin Makadia (@NitinMakadia) March 22, 2017
DL: There is no cross departmental agreement that if there is an underspend on CP budget, future decisions will be taken to maintain funding
— Annabelle Collins (@CandDAnnabelle) March 22, 2017
1pm: As the judge “feels his way through pharmacy”, lawyer David Reissner comments on some of the points made so far:
Reissner: This sounds like the judge is feeling his way into the pharmacy world. Dispensing by Amazon isn’t really the issue.Justice Collins: A problem is there is drug dispensing through Amazon. This is very dangerous. #CutsInCourt
— Annabelle Collins (@CandDAnnabelle) March 21, 2017
Reissner: This is a good start. One of the difficulties of cases like this is that most judges are men, and I think I’m right in saying women go to pharmacies far more than men.And the Judge acknowledged the importance of CP to primary healthcare #CutsInCourt
— Annabelle Collins (@CandDAnnabelle) March 21, 2017
Reissner: I’m sure this is right. Post-referendum especially, there is going to be very little time for anything but Brexit.AF: The DH didn't want exposure of parliamentary time #CutsInCourt
— Annabelle Collins (@CandDAnnabelle) March 21, 2017
Reissner: If the cuts are stopped because the judicial reviews are successful, Jeremy Hunt may find he has to make cuts somewhere else, or he’s going to have to have a difficult conversation with the chancellor.AF: The headline point is these cuts will cost the exchequer #CutsInCourt
— Annabelle Collins (@CandDAnnabelle) March 21, 2017
Breaking for lunch, back at 2. #cutsincourt
— Annabelle Collins (@CandDAnnabelle) March 22, 2017
Mr Hammond's motive to cut costs with no consideration on the consequence to health provision in England. Shame on him! https://t.co/9CwyPe1Ovl
— Peter Burrows (@peyburrows) March 22, 2017
Community Pharmacy is NOT like other "retail markets"#weph
— Kevin Bazaz (@kevbazaz) March 22, 2017
h/t @CandDAnnabelle for the letter pic.twitter.com/DtF2kmB32k
This letter's one of the docs I've wanted to share forever - Chancellor Hammond misleading PM May over #pharmacycuts https://t.co/bRKN3aHy2h
— Andrea James (@HealthRegLawyer) March 22, 2017
DL: for every thousand pounds added to 11%, there will be a cut to pharmacies who don't qualify #cutsincourt
— Annabelle Collins (@CandDAnnabelle) March 22, 2017
Justice Collins: I don't see the logic in this. Im not impressed with that reasoning #cutsincourt
— Annabelle Collins (@CandDAnnabelle) March 22, 2017
JC: all A&E in a chronic state. #cutsincourt
— Annabelle Collins (@CandDAnnabelle) March 22, 2017
The Chancellor wanted to see a move away from bricks and mortar pharmacies. C+D has seen the letter #cutsincourt https://t.co/A8qRubaOma
— Annabelle Collins (@CandDAnnabelle) March 22, 2017
Judge: DH attempts to force equality duty from gov and onto individual pharmacies #CutsInCourt
— Annabelle Collins (@CandDAnnabelle) March 22, 2017
@CandDThomas @AllisonsChemist Whistleblower of illegal acts protected but this appears no more than financial observation
— Xrayser (@Xrayser) March 22, 2017
@blmerriman @AllisonsChemist @Xrayser It's unusual I'm told by QC - exception rather than rule. Can be for "public interest" #CutsinCourt
— Thomas Cox (@CandDThomas) March 22, 2017
Justice Collins questions why so many docs unpublished #cutsincourt
— Annabelle Collins (@CandDAnnabelle) March 22, 2017
DL refers to meeting in Oct. Said it is impossible to provide evidence of pharmacy closures. DL argues there WAS an estimate #cutsincourt
— Annabelle Collins (@CandDAnnabelle) March 22, 2017
DL argues it was wrong that DH didn't know how many pharms would close #CutsInCourt
— Annabelle Collins (@CandDAnnabelle) March 22, 2017
DL: The final submission did not have any model numbers in it #CutsInCourt
— Annabelle Collins (@CandDAnnabelle) March 22, 2017
£113m removed from budget. Logically the modelling can only have produced by combo of reduction in payments + pharms #CutsInCourt
— Annabelle Collins (@CandDAnnabelle) March 22, 2017
There is a measure of uncertainty about the assessment. Ministers would not told about the second assessment it seems #CutsInCourt
— Annabelle Collins (@CandDAnnabelle) March 22, 2017
DL: no evidence in impact assessment to say hypothesis correct or not #CutsInCourt
— Annabelle Collins (@CandDAnnabelle) March 22, 2017
DL: government took decision to reduce no of pharmacies without knowing assumption was correct #CutsInCourt
— Annabelle Collins (@CandDAnnabelle) March 22, 2017
PM and Chancellor agree too much spent on pharms. See @ChemistDruggist for full story #CutsInCourt
— Annabelle Collins (@CandDAnnabelle) March 22, 2017
There is an unpublished impact assessment #cutsincourt
— Annabelle Collins (@CandDAnnabelle) March 22, 2017
PM supports proposals but asks for PHas scheme number of pharmacies to be increased #cutsincourt
— Annabelle Collins (@CandDAnnabelle) March 22, 2017
Chancellor weighs in. Gov spends too much on pharmacy #cutsincourt
— Annabelle Collins (@CandDAnnabelle) March 22, 2017
DL: Assumed there are too many pharms. Assumed remaining pharms will absorb work. No capacity assessment #cutsincourt
— Annabelle Collins (@CandDAnnabelle) March 22, 2017
DL references witness statements #cutsincourt
— Annabelle Collins (@CandDAnnabelle) March 22, 2017
DL: £2.8 billion hunt says is given to pharms fund public health services AND compensation for drugs. Wrong to say otherwise #cutsincourt
— Annabelle Collins (@CandDAnnabelle) March 22, 2017
DL quotes letter from Hunt to PM. Clear assumption too many pharms. #cutsincourt
— Annabelle Collins (@CandDAnnabelle) March 22, 2017
It was highlighted that pharmacies in clusters still working full volume. Officials decided clusters = over supply #CutsInCourt
— Annabelle Collins (@CandDAnnabelle) March 22, 2017
There is no evidence that ministers were informed that pharmacies in deprived areas in more demand as fewer GPs. #CutsInCourt
— Annabelle Collins (@CandDAnnabelle) March 22, 2017
DL: Department knows this is a problem. Ms Howe accepts it. Exhibits 2 docs that go with problem #CutsInCourt
— Annabelle Collins (@CandDAnnabelle) March 22, 2017
DL references Kings Fund report. Questioning why GPS are prevalent in affluent areas. #CutsInCourt
— Annabelle Collins (@CandDAnnabelle) March 22, 2017
@Xrayser @AllisonsChemist Here was to protect individual - reason pages still redacted. But questionable if this was justified #CutsinCourt
— Thomas Cox (@CandDThomas) March 22, 2017
DL argues SoS misunderstood duty, didn't do a proper assessment and decision has no reasons to justify #CutsInCourt
— Annabelle Collins (@CandDAnnabelle) March 22, 2017
Still debating level of duty to ensure health equality #CutsInCourt
— Annabelle Collins (@CandDAnnabelle) March 22, 2017
JC not convinced it is MPs duty to do this #CutsInCourt
— Annabelle Collins (@CandDAnnabelle) March 22, 2017
DL argues that you must start analysis accepting data about inequality. #CutsInCourt
— Annabelle Collins (@CandDAnnabelle) March 22, 2017
Q interesting wide debate. Does NHS have a duty to reduce health inequality? #CutsInCourt
— Annabelle Collins (@CandDAnnabelle) March 22, 2017
DL: Despite relaxation of rules of entry, demand on services increased more than no. of pharmacies #CutsInCourt
— Annabelle Collins (@CandDAnnabelle) March 22, 2017
Lots of references to written evidence. Debate around NHS' duty to make sure all people access services #CutsInCourt
— Annabelle Collins (@CandDAnnabelle) March 22, 2017
Referring to another set of docs. 2010 report from office of fake trading. Predicted increase in no of pharmacies. #CutsInCourt
— Annabelle Collins (@CandDAnnabelle) March 22, 2017
DL: NHS maintains that cuts can be made without impact on patients. #CutsInCourt
— Annabelle Collins (@CandDAnnabelle) March 22, 2017
'A suggestion was made by a member those in deprived communities would have protected services'. DL: there was no response #CutsInCourt
— Annabelle Collins (@CandDAnnabelle) March 22, 2017
DL referring to evidence bundle. DH believed changes would improve quality of services #CutsInCourt
— Annabelle Collins (@CandDAnnabelle) March 22, 2017
DL: ministers failed to be clear about the consequences of their own decisions #CutsInCourt
— Annabelle Collins (@CandDAnnabelle) March 22, 2017
DL: In essence my case is about discharging duties that have to be undertaken. #CutsInCourt
— Annabelle Collins (@CandDAnnabelle) March 22, 2017
DL: There is common thread through our case. About to outline skeleton argument #CutsInCourt
— Annabelle Collins (@CandDAnnabelle) March 22, 2017
DL = David Lock. NPA lawyer #CutsInCourt
— Annabelle Collins (@CandDAnnabelle) March 22, 2017
AF has finished speaking. Now time for @NPA1921 #CutsInCourt
— Annabelle Collins (@CandDAnnabelle) March 22, 2017
AF: The minister wasn't briefed (I think before speaking in parliament) #CutsInCourt
— Annabelle Collins (@CandDAnnabelle) March 22, 2017
15% operating figures quoted by @mowat4ws in parliament. JC asking if he can take into account what was said in Parliament.
— Mike Hewitson (@MikeHewitson1) March 22, 2017
There is a leitmotif through departmental workings says AF #CutsInCourt
— Annabelle Collins (@CandDAnnabelle) March 22, 2017
Painting a picture of dishonesty. #CutsInCourt
— Annabelle Collins (@CandDAnnabelle) March 22, 2017
AF says DH said estimations of closures were avoided - this is not true she says. #CutsInCourt
— Annabelle Collins (@CandDAnnabelle) March 22, 2017
AF Quotes PSNC letter to NHS England warning about establishment payment loss. Impact always called for. #CutsinCourt
— Annabelle Collins (@CandDAnnabelle) March 22, 2017
Alistair Burt comments on 3,000 closing brought up. AF says figures were bandied around. #CutsinCourt
— Annabelle Collins (@CandDAnnabelle) March 22, 2017
There were questions about mergers - several hundred would close. Minister said: that's not enough #CutsInCourt
— Annabelle Collins (@CandDAnnabelle) March 22, 2017
It seems even DH not sure about their own figures #CutsInCourt
— Annabelle Collins (@CandDAnnabelle) March 22, 2017
Another internal doc from November 9th. There was presentation - caveat says closure figures could be 'underestimated' #CutsInCourt
— Annabelle Collins (@CandDAnnabelle) March 22, 2017
Another reference to the ministerial fag packet #CutsinCourt
— Annabelle Collins (@CandDAnnabelle) March 22, 2017
AF referring to evidence bundles. Proposals are informed by publicly available data according to DH. 'No it's not' she says #CutsinCourt
— Annabelle Collins (@CandDAnnabelle) March 22, 2017
JC: knock on effect of closures could mean more ppl going to their GP. AF: this is highly significant #CutsinCourt
— Annabelle Collins (@CandDAnnabelle) March 22, 2017
Judge questions the assumptions made about the profitability of pharmacies #CutsinCourt
— Annabelle Collins (@CandDAnnabelle) March 22, 2017
AF: DH never tell them they are working with estimates. Their info is soft.. but it is no coincidence the same figures come up #CutsinCourt
— Annabelle Collins (@CandDAnnabelle) March 22, 2017
AF: Ms Sharpe is asking for the rationale - you are putting forward a policy but where are the workings? #CutsinCourt
— Annabelle Collins (@CandDAnnabelle) March 22, 2017
AF: the SOS did not inform himself sufficiently. He cannot argue it was high policy. (This point has come up before) #CutsinCourt
— Annabelle Collins (@CandDAnnabelle) March 22, 2017
JC: your argument is you weren't given information you ought to have been given. #CutsinCourt
— Annabelle Collins (@CandDAnnabelle) March 22, 2017
Justice Collins - what essential from DH, cuts had to be done in a way that showed low number of job losses/pharmacy closures #CutsinCourt
— Annabelle Collins (@CandDAnnabelle) March 22, 2017
Justice Collins: we know all gov departments are strapped for cash... #CutsinCourt
— Annabelle Collins (@CandDAnnabelle) March 22, 2017
AF: my client doesn't believe the answers given by DH were straight. #CutsinCourt
— Annabelle Collins (@CandDAnnabelle) March 22, 2017
Tension between lawyers. #CutsinCourt
— Annabelle Collins (@CandDAnnabelle) March 22, 2017
James Eadie interjects. He thinks PSNC is taking too long. Not happy about length of argument. #CutsinCourt
— Annabelle Collins (@CandDAnnabelle) March 22, 2017
AF: behind the scenes in Whitehall there were estimates of closures. There were analysis and calculations done. #CutsinCourt
— Annabelle Collins (@CandDAnnabelle) March 22, 2017
And we're off. I'm sure I don't need to remind you to follow #CutsinCourt again. AF from PSNC is speaking first.
— Annabelle Collins (@CandDAnnabelle) March 22, 2017
Good luck @NPA1921 @HealthRegLawyer @DavidLockQC Yesterday seemed like a good start from what I heard. Today about patients #cutsincourt
— Allisons Chemist (@AllisonsChemist) March 22, 2017
Looking forward to hearing from the NHS/ DH lawyers in court #CutsInCourt #cphoconf pic.twitter.com/ruGmxOCfxv
— Whickham Pharmacy (@WhickhamPharm) March 22, 2017
Will be following @CandDAnnabelle to hear more from #cutsincourt #prescriptionfordisaster
— James Wood (@JamesWWood) March 22, 2017
Are you hopeful the funding cuts will be quashed?