Department of Health vow to double small business spending 'vital'
Business Independent Pharmacy Federation says commitment to spend 18 per cent of health budget on small and medium-sized businesses is vital for contractors, but finance experts worry about its implementation
The Department of Health's (DH) commitment to spend more on small businesses is vital to help contractors survive, the Independent Pharmacy Federation (IPF) has said.
The IPF welcomed last week's (January 8) renewal of the DH's promise to double the proportion of its budget spent on small and medium-sized businesses (SMEs) from 9 per cent in 2011 to 18 per cent by 2015.
But finance experts Umesh Modi and Andy Harwood said the DH needed to do more to explain how the money would "filter down" to contractors.
Independent Pharmacy Federation chief Claire Ward said the Department of Health needed to put greater emphasis on the role of small businesses and do more to support them
More on independent contractors
IPF chief executive Claire Ward said the DH's announcement was "good news" for smaller pharmacy businesses and showed an understanding of the value that independent pharmacies could have in healthcare.
"Money coming into the system to support small businesses is absolutely vital for independents because that's the way they're going to survive in the marketplace," she told C+D last week (January 9).
However, the DH needed to put greater emphasis on the role of small businesses and do more to support them, Ms Ward added.
Umesh Modi, partner at accountancy firm Silver Levene, said the DH's money was more likely to benefit small wholesalers, short-line suppliers and procurement companies, rather than independent pharmacy contractors.
"In previous years, I haven't seen any independent contractors derive additional income from this spend," he told C+D.
Andy Harwood, director of business development at finance company Pharmacy Partners, said it was hard to predict if the extra money the DH spent would "filter down" to smaller pharmacies, which needed financial support the most.
Mr Harwood called on the DH to prove its commitment to smaller pharmacies by reducing the number of prescription items pharmacists were required to dispense before they received practice payments.
In 2011-12, the DH and its arm's-length bodies spent £1,061 million on third-party suppliers, of which only 9 per cent went to SMEs. In 2012, the DH promised to double this by 2015 as part of a wider government commitment that at least a quarter of the money spent on goods and services went to SMEs.
The DH said it was "fully committed" to supporting SMEs and the amount it spent on them had already increased to 13.6 per cent in March 2013.
In October 2012, prime minister David Cameron announced a government loan scheme to help pharmacy businesses cope while they waited for NHS prescription payments.
Is the DH doing enough to support independent contractors?