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What does the autumn statement mean for community pharmacies?

You’ve seen the headlines. But how will the autumn statement really affect pharmacy teams and contractors? 

Opening his autumn statement, new chancellor Jeremy Hunt unveiled his three key priorities for the nation: “stability, growth and public services”.

Just eight weeks since former chancellor Kwasi Kwarteng’s mini-budget speech sent the government into turmoil and spooked the financial markets, Mr Hunt delivered a package of tax rises, energy bill warnings and spending cuts designed to “tackle the cost-of-living crisis and rebuild the economy”.

But it comes at a cost to personal finances.

While promising to protect the most vulnerable, he also warned that the UK economy had already entered recession, and that things would get worse before they improved.

Here we break down the key measures announced and what they mean for community pharmacy teams and contractors.


NHS workforce plan


In July, during Mr Hunt’s tenure as its chair, the Health and Social Care Committee published a report calling for an “integrated and funded” pharmacy workforce plan to be developed and laid before parliament within the next year.

The government will now publish a plan to improve the NHS and healthcare staffing crisis, focusing on doctors and nurses needed over the next five, 10 and 15 years, Mr Hunt announced during his statement.

However, the Treasury told C+D that a further announcement on the scope of the review – whether it includes the pharmacy sector; the body conducting independent verification; and the detailed timetable of the workforce plan – “will be announced in due course”.

Read more: ‘Unfair advantage’: PCNs see increase in reimbursable pay for pharmacists

Responding to the announcement, the Company Chemists’ Association (CCA) welcomed the workforce plan, but warned that “pharmacists, especially the pharmacist workforce in the community sector, must be included”.

The sector “desperately needs a comprehensive picture of the forecasted community pharmacist workforce”, it said. Meanwhile, it highlighted that policymakers “need to urgently recognise the difficulties pharmacy businesses of all sizes are facing in finding pharmacists”.


NHS budget


Health spending will increase by £3.3 billion in cash terms in the next two years, Mr Hunt revealed. Combined social care and NHS spend will increase by £8.1bn in cash terms by 2024/25.

While the CEO of the Pharmaceutical Services Negotiating Committee Janet Morrison welcomed the “much-needed” funding increase, “it’s critical that community pharmacy receives its fair share of these monies”, she noted.

As NHS budgets “have continued to tick upwards, pharmacies have faced significant real-term cuts since 2015 leaving contractors and their teams making unsustainable efficiencies to maintain service levels”, she warned.

“Enough is enough: pharmacies have been squeezed to their limit,” she declared.

“This is now having a worrying impact on patients as well as on the health of contractors and their teams,” she added. She called for the government and NHS to invest in pharmacy to support its services and relieve pressures elsewhere within the NHS.

Read more: Sector in crisis: Thousands of pharmacies at risk of closure as inflation bites

Meanwhile, the CCA also welcomed the additional funding but warned that the government “must set out their plans to improve primary care access without delay”.

In 2021/22, community pharmacies in England dispensed more than 1 billion NHS prescribed medicines for patients, it added.

“Based on current rates of growth, we expect this figure will grow by a further 100 million items by 2025/26. Rising patient demand for pharmacies can only be met through additional funding,” the body said.

Other health plans unveiled in the autumn statement included a promise of an extra £1.5bn funding for the Scottish government, £1.2bn for the Welsh government and £650m for the Northern Ireland executive for “next year, the year after, and every year thereafter”, which will be allocated to schools and the NHS.

Chair of NHS Norfolk and Waveney, and a former secretary of state for health, Patricia Hewitt, will also lead a review into the role and powers of integrated care systems, looking at how they can be handed more autonomy with the right level of accountability in return, Mr Hunt announced.


National living wage increase


Mr Hunt also confirmed that the national living wage will be increased from £9.50 an hour for over-23s to £10.42 from April 2023. According to the government, this represents an annual pay rise worth over £1,600 to a full-time worker.

He confirmed a 10.1% rise in the state pension, benefits and tax credits from April next year, in line with September’s inflation figure.

Further announcements include the national insurance thresholds remaining unchanged for an additional two years, until April 2028.

While the national wage increase was welcomed, contractors warned that without added pharmacy funding, the increase would be difficult to absorb.

National Pharmacy Association board member and owner of Newdays Pharmacy in Buckinghamshire, Olivier Picard, noted that his staff are “rightly deserving of a pay rise and I’m well willing to give that”. But given the current cost pressures contractors face and high costs of medicines, “I’m genuinely worried about the business going forward”, he said.


Business taxes and energy bills


In an attempt to soften the blow for businesses, Mr Hunt announced a “package of targeted support to help with business rates costs worth £13.6bn over the next five years”, to help offset the large bill increases companies face. This will come into force from April 1 next year.

Mr Hunt also left the three main income tax rates unchanged – 20p basic, 40p higher and 45p additional rate – with the first £12,570 of income tax-free and the 40% rate starting at £50,270.

He did, however, lower the income threshold for those who pay the 45p top rate of income tax, from £150,000 to £125,140. This measure is expected to pull 250,000 people into the top rate.

Other measures announced include the energy price guarantee remaining in place until April 2023, with a planned increase to £3,000 per year from April.

The energy support bill for business and public services also remains in place until April 2023, he revealed.

Read more: Pharmacy bodies blast ‘devastating’ English funding deal

Association of Independent Multiple pharmacies CEO Leyla Hannbeck told C+D: “This is without doubt the most unstable period in our recent history as the sector endures the consequences of a five-year flat funding arrangement that fails to account for inflation, higher drug costs or costs of living.”

Many are “already struggling to maintain their heads above water today never mind tomorrow”, while further financial pressures will “only accelerate the demise of community pharmacies”, she warned.

“Unlike other sectors, we cannot pass the inflationary costs on to our patients, so [pharmacies] bleed cash on a month-by-month basis,” Dr Hannbeck added.

In order to achieve a “more efficient, productive NHS” that addresses current demands, there must be investment in community pharmacy “as a key player in primary care”, she declared.

Read more: Teva alerts health secretary to energy prices impact on pharmacies

Finally, Silver Levene accountant Vinku Shah told C+D that pharmacy businesses are “already feeling the squeeze with energy costs, higher financing costs, staff and drug shortages”. They will have to contend with more pressures due to “expected pay rises with no increase in funding”, he said.

Community pharmacy workers “will feel an even bigger squeeze in their disposable incomes”, he warned.

“Stressed out staff working longer hours” may also lead to “potential staff burnout,” he cautioned.

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