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‘Spending spree’: PDA queries GPhC HQ costs ahead of fee hike decision

The Pharmacists' Defence Association (PDA) has flagged a £9.3 million forecasted asset spend in its response to the pharmacy regulator's controversial fee hike consultation.

The PDA has noted a “significant disquiet” from its members about the cost of the General Pharmaceutical Council’s (GPhC) Canary Wharf headquarters, according to the union’s response to the regulator’s proposed 7.5% fee hike.

The PDA’s response to the consultation said that the GPhC’s reasoning for the fee increase is “wholly inadequate”. 

The regulator launched its consultation on registration and renewal fee increases for pharmacies, pharmacists, pharmacy technicians and foundation trainees in May.

Read more: ‘Pure greed’: Fury over 'unjustified' GPhC fee hike proposal

It claimed at the time that the proposed increase "has mainly been caused by a significant rise in the rate of inflation, which is around 10% a year at the moment”.

According to the GPhC’s proposal, fees would increase by 7.5% across the board:

  • Pharmacist renewal fees would rise £19 from £257 to £276
  • Pharmacy technician renewal fees would rise £9 from £121 to £130
  • Pharmacy premises renewal fees would rise £27 from £365 to £392

The consultation ran until August 8 and the PDA yesterday (August 21) released its formal response to the proposed increase, informed by responses from “over 3,800” union members. 

 

Canary Wharf in the coalmine

 

The PDA survey asked members how the GPhC could be more “cost effective” and the union reported that the “top recurrent theme” received in responses related to the GPhC’s Canary Wharf headquarters.

The union said that while the regulator had moved to a cheaper office space, the GPhC remains in the “prime financial district” of Canary Wharf and that it can “see no evidence” that the GPhC considered other locations. 

The PDA raised the example of the General Dental Council, which relocated many of its functions to premises in Birmingham leading to “net savings of circa £50m over 15 years” or an average of £3.33m per year.

Read more: GPhC claims fee plans 'still among the lowest' despite 7.5% hike

“This is registrants’ money that is being spent by the GPhC,” the PDA said, adding that it “cannot support any fee rise” without “full disclosure” on the costs associated with the Canary Wharf offices and “[justification of] the financial basis” used to choose the location.

In answer to C+D’s questions, a spokesperson for the GPhC said that its annual plan and budget, published in February this year at its council meeting, “outlines the cost savings in moving to our new premises at Canary Wharf”. 

The council papers state that “like-for-like savings for the accommodation equate to almost £0.9m a year”.

 

“Spending spree”

 

The GPhC’s May consultation document stated that it will face a deficit unless it increases its income, according to its “budget forecasting”.

The PDA challenged this assertion, noting that the regulator's “fixed asset valuation” of £0.8m in 2023 will “balloon” to a “staggering” £10.1m by 2025.

Read more: DH rubberstamps plans giving GPhC power to set own practices

The union said that this “seems to indicate” that the GPhC is on a £9.3m “serious and significant spending spree”, adding that it suspects “the bulk of this expenditure” relates to fittings at the regulator’s new headquarters.

It called on the GPhC to be “fully transparent” about its asset acquisition and in particular the costs related to “fitting out its ostentatious new office space”.

 

Fee leniency for lower incomes

 

Meanwhile, the PDA claimed that the GPhC has “failed to disclose” how it calculates the cost to regulate each registrant group, despite the union sending a freedom of information (FOI) request to the regulator.

It said that the GPhC “failed to provide evidence” to support its claim that fees are determined by the cost to regulate each group, noting that online pharmacies now account for “more than 30% of open fitness-to-practise (FtP) cases” and that this “should result” in a higher fee for premises owners.

In 2021, the regulator revealed that it was considering "“differentiated fees options to cover the increased regulation needed for online pharmacies”.

Read more: GPhC council members voted to give themselves 20% pay rise in May meeting

The PDA also said that its members had expressed a “high level of support” for a proposal to introduce a concessionary system for registration fees for lower income pharmacists.

More than 80% of respondents to its poll said that they paid their own registration fees and therefore pharmacists not working full-time would face a “direct individual impact” from a fee increase, it added.

While just 30% of respondents said that they work part time, more than 84% supported reduced fees for those earning a lower income and a “flat low-income concession” would be “fairer”, the PDA said.

Read more: GPhC approves multi-year, flat rate pharmacist and pharmacy technician fees

A GPhC spokesperson said that the regulator was reviewing the responses that it received during the consultation period, adding that previous consultation had found respondents “largely in favour” of retaining a flat fee structure.

The regulator will publish a report on the “feedback” in the autumn, which will include the PDA’s response and be “taken into consideration in any final decisions”, they said.

 

Fee-asco

 

The immediate response from the pharmacy sector to the GPhC’s fee hike proposal was overwhelmingly negative, with C+D revealing in May that 92% of 566 respondents to a snap poll felt that the fee increase was not justified. 

It comes after GPhC council members voted to give themselves a 20% pay rise last year.

Read more: GPhC confirms increase in renewal fees from July despite opposition

After its September 2021 council meeting, the regulator introduced a multi-year fees cycle, replacing annual adjustments and meaning that fees were subsequently frozen for two years.

But it claimed in its May consultation document that “now is not the right time” for the multi-year approach, as it would not be “a proportionate way” to set fees.

In March 2019, the regulator raised pharmacist renewal fees by 2.8% to £257, pharmacy technician fees by 2.5% to £121 and premises renewal fees by 8.7% to £262. This move also caused outrage among the profession, with 70% of professionals signalling opposition to the increase. 

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