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Scottish funding: CPS and government clashed over pensions

CPS: The Scottish government had "secured contractors' cash flow for the coming year"

The Scottish government acknowledged employment costs had increased but refused to reflect these in the global sum for 2015-16, says Community Pharmacy Scotland


Community Pharmacy Scotland (CPS) clashed with the Scottish government over increasing funding to take account of pension and regulation costs, C+D has learned.

As part of the “long and difficult negotiations” over the 2015-16 funding settlement, CPS tried to increase the global sum to take account of costs such as pensions and the living wage of £7.85, pharmacy services manager Matt Barclay told C+D on Tuesday (July 28).

The Scottish government had "acknowledged" that contractors were incurring these extra costs as well as preparing themselves for the General Pharmaceutical Council's new inspection regime, Mr Barclay said. But the government had "deemed that [these costs] should not be met through an increase in the global sum", he said.

CPS accepted the government's final offer of a 1.4% increase in the global sum once it realised it could not negotiate any further concessions and the "cash flow for the contractor network was safeguarded for the coming year", Mr Barclay added.

Impact on contractors

Contractor George Romanes, who owns seven pharmacies in Duns in the Scottish Borders, told C+D that “without a doubt” workplace pensions affect the costs of running his business.

“The setup costs and independent financial advice we provide had an impact on us this year,” Mr Romanes said. “The ongoing cost of pensions is another issue and [CPS] were right to flag that up."

Mr Romanes added that he was “disappointed” by the settlement, but appreciated that CPS "had a difficult time" during the negotiations.

Philip Galt, managing director of Scottish pharmacy chain Lindsay and Gilmour, told C+D that CPS had done well against a "tough negotiating environment". "We could have had a flat settlement and I'm pleased we have seen an increase in the global sum," he said.

Mr Galt stressed that 2016 will be even tougher and the government will need to "acknowledge increased costs in respect of the living wage coming in next year".

How will the rise in employment costs affect your business? 

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