Labour’s Autumn Budget was highly anticipated. Following the party’s success in July’s general election, it was the first Budget delivered by Labour since 2010.
The post-Budget discourse has been dominated by the headline figure of £40bn worth of tax rises, described by Chancellor Rachel Reeves as a necessity to help fill a “black hole” in the nation’s finances and to invest in public services.
A major headline an increase in spending to support the NHS. Described by the Chancellor as the biggest hike in funding since 2010, the Budget outlined an additional £22bn for frontline services and £3bn for equipment and buildings. This translates to a spending increase of close to 4% a year after inflation.
This broad investment in the NHS will be most impactful, but only if matched with effective community care services on the frontline.
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It’s clear that the funding could present new opportunities for the pharmacy sector. The Budget outlines plans to transition certain healthcare services from hospitals to community settings, with the aim to increase the delivery of personalised care closer to patients’ homes. For pharmacists, this could mean an expanded role in providing healthcare services beyond their current remit, including more in-depth patient consultations.
A dedicated fund has also been committed to deliver upgrades to around 200 GP surgeries. Enhanced primary care facilities could promote closer collaboration between pharmacists and GPs, potentially facilitating patient referrals and shared healthcare initiatives, to alleviate pressures on surgeries and reduce waiting times for non-urgent care.
The opportunity for increased collaboration across healthcare providers is further strengthened by government plans to invest £2bn in NHS digital technology, to improve efficiency and patient outcomes. If integrated with pharmacy systems, this could enable better access to shared patient records, resulting in a more streamlined service for patients.
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The government’s preventative health agenda signals an effort to galvanise public health efforts - from tackling obesity through an increase in the soft drinks levy, to supporting a smoke-free generation with hikes in tobacco duties. Community pharmacies could work alongside public health services to play a part in this through provisions of consultations and support services, further strengthening their role in improving population health.
With these announcements, there are clear opportunities for pharmacies to take on broader responsibilities in primary care. This will be welcomed by operators looking to expand and diversify their offering which, in turn, could also foster greater customer trust and retention.
Backing business
While the Budget presented new operational opportunities for pharmacies, it also brought a number of tax announcements that will have a financial impact on business owners.
The tax changes, which are scheduled to take effect from 6 April 2025, include an increase in employer National Insurance contributions from 13.8% on salaries over £9,100, to 15% on salaries above £5,000. In addition, the legal minimum wage for over-21s is to rise from £11.44 to £12.21 per hour, while the rate for 18 to 20-year-olds is to go up from £8.60 to £10.
While these changes could present cost challenges for pharmacies and other SMEs, measures such as the enhanced Employment Allowance and targeted business rates relief may provide some balance.
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It’s vital that businesses receive the right support to successfully navigate this new financial landscape. The government will bring forward a Small Business Strategy Command Paper in 2025, which we encourage engagement with, to ensure the sector’s needs are represented as policies develop.
Described by the Chancellor as a Budget focused on driving growth, it’s important that pharmacies are now supported to achieve and deliver their ambition as key contributors to the UK economy and the backbone of local communities.
As we look ahead, the measures announced in the Autumn Budget could unlock new opportunities for pharmacies to expand their remit and ensure better patient retention, but these avenues for growth must be supported by effective access to capital.
Alexandra Rice is chief commercial officer at ethical bank Unity Trust Bank