Pharmacy sector bodies have reacted to the autumn budget announced by chancellor of the exchequer John Healey in parliament earlier today.
The budget outlined that 70,000 more high street businesses will be exempt from business rates through an increase in the Small Business Rates Relief (SBRR) thresholds from £12,000 to £18,000 from April 1.
The government said that for retail businesses, the move will see their business rates “either frozen in real terms, reduced or cut to zero”.
Read more: IPA launches business rates reimbursement campaign
The budget also revealed that the national living wage will increase by 3.9% to £13.21 per hour on April 1, and the national minimum wage for 18- to 20-year-olds will rise by 3.9% to £11.27 per hour.
And it announced that there will be an independent review of NHS productivity and AI that will “inform the next spending review”.
“Reporting in early 2027, this will focus on the practical opportunities presented by AI and technology to transform services for patients and boost NHS productivity,” it said.
“No clear sign of relief”
Community Pharmacy England (CPE) chief executive Janet Morrison said the budget “brings no clear sign of relief for pharmacy owners”.
She said the minimum wage increase will place “yet another significant cost burden on community pharmacies at a time when businesses are already under intense financial pressure”.
“Whilst there were some positives – such as an ambition to reduce NHS admin and some business rates relief – these won’t offset the cumulative impact of rising costs across the sector, and the outstanding funding gap,” she added.
“Grossly unfair”
National Pharmacy Association chief executive Henry Gregg said it is “good news” that the chancellor has extended business rates relief to more pharmacies in England, but stressed that “any with higher rateable values will still be hit by this tax”.
He said it is “still grossly unfair that pharmacies are forced to pay business rates at all, given that both GP and NHS dentist colleagues are exempted”.
Read more: New national living wage could cost pharmacies £94m, CPE warns
And he said that though “pharmacies want to do all they can” to support staff amid a rise in the cost of living, they “cannot flex their costs” to absorb minimum wage increases.
“If the government wants to allow pharmacies to expand and bring care close to home, they must support them to meet these imposed costs or risk pharmacies having to cut back on services to patients to afford them.”
Read more: Community pharmacy creates £31.6bn of social value, says CPE
Meanwhile, Independent Pharmacies Association (IPA) chief executive Dr Leyla Hannbeck said the budget’s headlines “do not reflect the reality” of continually rising costs, squeezed margins and businesses “struggling to keep their doors open”.
She said increasing the minimum wage is “incredibly important for our hardworking staff” - but stressed that previous wage increases “have already placed pharmacies under enormous pressure”, with “over 50 pharmacies” closing so far this year alone.
Read more: Hundreds of pharmacies consider closure over business rates
“We welcome the government’s business rates support for eligible high street businesses, including the higher SBRR threshold and the real-terms freeze for qualifying properties,” Hannbeck added.
“However, the benefits will vary between pharmacies, with many independent multiple operators unable to access the increased relief.”
Read more: PFI rebranded: A new budget, but an old idea
A Company Chemists’ Association spokesperson said the budget brings “little relief” for the sector, stressing that future funding settlements “must continue to close the funding gap, so that patients can continue to access the vital medicines they rely on”.
And Numark chairman Harry McQuillan said that while the increase in minimum wage is “an understandable measure”, it “causes a yet further increase in operating expenses for the community pharmacy network”.
“If funding for pharmacies does not increase alongside wage costs, it will ultimately lead to pharmacies considering reducing staff hours, limiting investment in new services and delaying recruitment,” he added.
Read more: Sector slams pharmacy’s exclusion from business rates support
It comes after the IPA launched a campaign earlier this month calling for an end to the business rates disparities between pharmacies and other NHS providers.
And it follows CPE analysis following last year’s budget revealing that the living wage increase instated in April could cost the sector tens of millions in additional costs.
