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Pharmacy rents: DH working with NHS landlords to ensure ‘fair’ approach

The Department of Health and Social Care (DH) is reviewing how NHS landlords calculate rentals for health centre pharmacies, pharmacy minister* Maria Caulfield has revealed.

In a written question to Ms Caulfield on June 29, shadow minister for health and social care Feryal Clark asked whether the DH had held discussions with NHS Property Services (NHSPS) “on the impact of increasing rents on community pharmacies”.

The pharmacy minister* confirmed yesterday (July 7) that the DH had met with NHSPS to discuss about “specific instances where rent reviews are due at pharmacies located in health centres it operates and owns”.

Furthermore, the DH is working with NHSPS to understand whether the “application” of the approach it uses to establish these rents is “fair and transparent”, Ms Caulfield added.

“When undertaking such rent reviews, NHSPS uses a standard valuation approach for calculating the proposed level of rental charges to ensure it recovers the costs of operating these premises, which are then negotiated and agreed with the pharmacies concerned on a case-by-case basis,” the minister said.

NHSPS told C+D that it did not have anything further to add, but its work with the DH is “ongoing”.

Read more:
NHS landlords slap down multiples' health centre rent reduction pleas

High rentals issues flagged by C+D


C+D had also flagged the issue of high rentals to Ms Caulfield last month, following a parliamentary event on the future of community pharmacies.

Aware of the issues experienced by some contractors, she revealed in an exclusive interview with C+D that she believes in the services offered by pharmacies and “will try and support [them] as best [she] can”.


NHSPS calculations based on “outdated” model


NHSPS operates a system where rent for pharmacies located in health centres is calculated based on the number of patients registered at a surgery – which it previously told C+D is “in line with current guidance”.


Read more:
NPA members report threefold increase in health centre pharmacies’ rents


But many contractors and pharmacy organisations have suggested that this approach needs updating, with one contractor claiming to C+D in May that rental calculations for his premises could swell from £25,038 to £80,000 a year.

A Lloydspharmacy spokesperson also told C+D in May that NHSPS’s model is “outdated and no longer fit for purpose”.

“It would be more effective and reasonable if it was reflective of the actual footfall,” they added at the time.

Meanwhile last month, the Association of Independent Multiple pharmacies urged all contractors affected by high rentals to sign a letter to NHSPS, asking to adopt a “more realistic approach for calculating rents”.

*The DH announced today (July 8 ) that Ms Caulfield has been appointed minister for state of health and social care, leaving the position of pharmacy minister temporarily vacant

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