Community Pharmacy England (CPE) today (December 1) said that it has estimated that the recently announced increase in the national living wage will cost community pharmacy between £150 million and £195 million to implement.
Last week, Chancellor Jeremy Hunt announced that the national living wage will rise by 9.8%, from £10.42 to £11.44.
CPE said that its chief executive Janet Morrison wrote to the Chancellor today to “express deep concern about the financial impact of the increase”.
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The negotiator stressed that “whilst as employers” pharmacy contractors “would always wish to ensure that employees have a fair wage”, pharmacies “cannot pass cost increases onto their customers”.
It called for “a targeted funding uplift to the core contract”, saying that a funding injection would be necessary to keep the sector “afloat” and pharmacies’ “doors open” so that “new services have a real impact for patients”.
“No viable business can absorb these cost increases”
Ms Morrison said that the autumn statement “overlooks the knock-on effects these measures will have on small businesses like community pharmacies”.
She stressed that ”no viable business can absorb these cost increases without significant support”, adding that “pharmacies have had a 30% real-terms reduction in funding since 2015”.
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In her letter sent to the Chancellor today, she said that it is “not sustainable to expect pharmacies to absorb these additional costs whilst underlying core funding remains at critically low levels”.
She added that the issue “must be addressed through a sustainable, long-term funding arrangement”.
A “death blow”
Reacting to the news last week, pharmacy contractors warned that the increase in the national living wage would be a “death blow for many” community pharmacies.
At the time, pharmacy contractor Mike Hewitson said he “conservatively” estimated that the cost to implement the living wage hike in the community pharmacy sector would be £110m per year.
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Meanwhile, vice-chair of the National Pharmacy Association (NPA) Jay Badenhorst told MPs at a pharmacy inquiry evidence session last week that the sector was at “great risk” of “uncontrolled” pharmacy closures” due to funding challenges.
C+D approached the Treasury and the Department of Health and Social Care (DH) for comment.
