In his first autumn statement as chancellor, Philip Hammond announced yesterday (November 23) that growth will fall below previous predictions, while inflation will rise over the next two years. The government “will no longer aim for a budget surplus” over the course of this parliament, he added.
He also referred to the Office for Budget Responsibility's forecast that the national debt will increase to £220 billion in the next four years, as a result of Brexit.
Pharmacy accountant Umesh Modi, partner at Silver Levene LLP, told C+D that while the government has previously made a claim that £10 billion more will go into the NHS, “this is refuted by many as fudge”.
“Even if it is true, I haven’t read anywhere that it will benefit pharmacy contractors,” he added.
However, Mr Modi said that in Mr Hammond's statement – delivered just over a week before the 12% cut to pharmacy funding in England comes into force on December 1 – there might be something to help “cushion the blow” of the chancellor's budget plans.
“The confirmation of reduced corporation tax rate to 17% from April 2020 is welcomed, as is the commitment to increase personal allowances,” he said. “This will help contractors cushion the tax blow on dividends introduced from April of this year.”
No real surprises
Mr Modi said there were “no real surprises” in yesterday’s statement, but he warned “the commitment to increase expenditure on investment and to abolish the plans to balance the books over the lifetime of this parliament will almost certainly result in more taxes at a later stage”.
Richard Murray, The King’s Fund director of policy – who is currently leading an independent review of pharmacy services in England – said the government “needs to look again at health funding in future”.
“The absence of new money for health or social care means that the already intense pressures on services will continue to grow,” he said. This is likely to "peak" in 2018-19 and 2019-20, when there is "amost no planned growth" in NHS funding, he added.
Pharmacy Voice said it is “disappointed, if not surprised” that the chancellor failed to mention primary care.
“We will continue to press home the opportunities pharmacy offers in improving public health and reducing pressure on the public purse through the commissioning of services, as outlined in the Community Pharmacy Forward View,” it added.