IPA warns ‘wrecking ball’ budget will cost sector over £125m

An increase in employer National Insurance Contributions (NICs) and minimum wages will cost the community pharmacy sector more than £125 million, a new IPA analysis has found.

The budget is “a wrecking ball to the sector that is already struggling for survival”

The Independent Pharmacies Association (IPA) last week (November 1) revealed its analysis of the government budget’s potential impact on the community pharmacy sector.

It said that the “overall cost” of the rise in employer NICs and national minimum wage would equate to £12,002 for an average pharmacy per year – totalling more than £125 million for the sector as a whole.

Read more: Minimum wage to rise 6.7% as National Insurance hike confirmed

This is based on an “average pharmacy” employing a pharmacist, accuracy checking technician, NVQ3 dispenser, NVQ2 dispenser, part-time healthcare assistant and a driver, it added.

IPA chief executive Dr Leyla Hannbeck said that the scale of the increase in employer NICs is “deeply worrying”.

“Wrecking ball”

It comes as Chancellor Rachel Reeves last week announced that employer NICs will rise by 1.2 percentage points to 15% and the national living wage will rise by 6.7% to £12.21 an hour in April.

These two changes “are a wrecking ball to the sector that is already struggling for survival”, Hannbeck said.

Read more: National Insurance rise would be ‘kick in the teeth’ for pharmacy, NPA warns

The IPA also stressed that the increase in Employment Allowance – which supports small businesses with their employment costs – from £5,000 to £10,500 is “not sufficient for the sector”.

“We hope that the current negotiations take this into account”, it said, highlighting that the community pharmacy sector has “not received an increase in core remuneration since 2015”.

Read more: Funding talks to resume after October 30 budget, says CPE

It called for community pharmacy to be “treated fairly” and granted “an exemption from employers National Insurance”.

Community Pharmacy England (CPE) has said it will do “everything [it] can to push for funding to cover those additional costs for pharmacy owners”, after warning of a “disastrous” risk of further pharmacy closures if the government does not provide “relief” for the sector.

Read more: BMA’s top GP warns budget will ‘break’ pharmacies – but less than GPs

And the National Pharmacy Association (NPA) also said that “it would be an insult if the government was able to offer support to GPs with the National Insurance rise but not hard-working pharmacies, who have faced nearly a decade of cuts in funding and are shutting at record rates”.

Meanwhile, negotiations on the next community pharmacy contractual framework (CPCF) could resume at any point now that the new government’s budget has been announced.

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