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‘Death blow’: Contractors despair amid ‘biggest ever’ rise to living wage

Chancellor Jeremy Hunt has announced that the national living wage will rise by 9.8%, but pharmacy contractors have warned this will be a “death blow” to the sector.

Chancellor of the exchequer Jeremy Hunt has announced that the national living wage will see its “biggest ever” increase – rising “almost 10%” from £10.42 to £11.44 an hour – in the autumn statement delivered today (November 22).

Under the reforms, full-time workers on the wage will receive a pay boost of more than £1,800 a year, the age eligibility threshold has been reduced from 23 to 21 and workers aged between 18 and 20 will receive £8.60 per hour.

But pharmacy contractors have reacted with distress at the announcement, faced with persistent flat funding and other inflationary cost pressures.

 

“Death blow”

 

Pharmacy contractor Mike Hewitson said on X, formerly known as Twitter, that the increase in the living wage will be a “death blow for many” community pharmacies.

He “conservatively” estimated that the cost to implement the living wage hike in the community pharmacy sector would be £110 million per year.

“Community pharmacies are already up against it with a 40% real-terms funding cut since 2014,” said Mr Hewitson, who called on NHS England (NHSE) to “pick up the tab in its entirety”.

Read more: ‘Enormous pressures’: MPs flag pharmacy funding, workforce and drug supply woes

He added that the funding crunch meant that “a single major financial failure” could “spook the banks” and spark a sector-wide crisis, with “short-term cash flow support” withdrawn so that the sector “implodes”.

Responding to Mr Hewitson’s thread, vice-chair of the National Pharmacy Association (NPA) Jay Badenhorst warned that the crisis was “already starting”.

Mr Badenhorst told MPs at a pharmacy inquiry evidence session yesterday (November 21) that the sector was at “great risk” of “uncontrolled” pharmacy closures” due to funding challenges.

Read more: MPs urged to bring Pharmacy First launch forward for winter

Ashley Cohen, chair of Community Pharmacy West Yorkshire, also reacted with dismay on X, asking how the sector could afford the living wage rise without a funding rise in next year’s settlement.

Mr Cohen said that the sector would be “unable to continue” amid the bite of pressures from inflation, costs of drugs and dispensing volume.

Martin Bennett, a pharmacy contractor at Wicker Pharmacy in Sheffield, echoed a GP practice manager’s call for a funding increase to support the living wage rise, saying that there will be “even more” pharmacy closures without “an adequate uplift”.

Read more: Government in ‘total denial’ about crisis in community pharmacy, Lords warn

Mr Bennett also featured in yesterday’s pharmacy inquiry with one MP recounting his prediction that “a significant number” of pharmacies would close in the next year “without a cash injection”, with the “most exposed” those that had invested in staff and infrastructure.

Meanwhile, head of pharmacy at Christie & Co Tony Evans commented that the living wage rise would place pharmacies under “even more pressure”. 

Mr Evans said that pharmacy businesses “continue to grapple” with a “flat” funding arrangement and said that a “successful outcome” to forthcoming contract negotiations was needed to “ensure the future viability of pharmacy business”.

 

Free prescriptions lost

 

Mr Hunt also announced today that people who fall foul of the government’s more severe sanctions for those on universal credit would lose access to free prescriptions.

Tase Oputu, chair of the Royal Pharmaceutical Society (RPS) in England, described it as a “short-sighted” and “incredibly disappointing move”.

Ms Oputu said that a person’s employment status should not be a “financial barrier” for access to medicines, repeating the RPS’s call for the abolition of prescription charges in England.

Read more: C+D Snapshot: Is it time to remove script charges in England?

England is the only remaining country in the UK to levy prescription charges from patients.

In October, a C+D snapshot poll revealed that 57% of respondents felt that prescription charges in England should be removed.

Read more: Treasury extends two new VAT exemptions to pharmacies

Ade Williams, director and superintendent pharmacist of the M J Williams Pharmacy Group, said at the time that the charges amounted to a “sickness levy, creating a barrier that robs [people] of their dignity, not to mention their health”.

According to the autumn statement, people eligible for universal credit who “disengage” with Jobcentre support and who have had an “open-ended sanction for over six months” would lose their benefits and have “additional benefits” removed, including free prescriptions.

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