Ever since Chancellor Rachel Reeves announced that employer National Insurance Contributions (NICs) would rise in April as part of her autumn budget, the pharmacy sector has been indignant.
The Independent Pharmacies Association (IPA) said at the time that the increase, along with a rise in the National Living Wage, was a “wrecking ball to [a] sector that is already struggling for survival”.
And MPs expressed their concerns about the Chancellor’s decision in the House of Commons, calling for the government to U-turn on its decision and “go back to the drawing board and provide for our...pharmacies”.
Read more: No deal! Pharmacy will not receive additional funding to cover NICs
But despite these desperate outcries, the government refused to back down. The Treasury confirmed to C+D in November that it would not provide additional funding for contractors such as GPs and pharmacies, and said at the time that it would “set out further details on allocation of funding for next year in due course”.
What followed was months of pleading – both from within and outside the sector – for community pharmacies to be shielded from these extra costs.
These calls, however, went unanswered and the pharmacy sector received no such information on how it would cope.
Crunch time
Hope then shifted to the long-awaited pharmacy funding deal, with some thinking that the package for 2025/26 would include financial assistance for the NI hike.
But last week’s announcement has come and gone, and it still remains unclear how the sector will cover the costs of the increase in NICs.
Pharmacy minister Stephen Kinnock last week (April 2) said that the Department of Health and Social Care (DH) “considered the increases in NICs and the National Living Wage when consulting on the funding arrangements for community pharmacy” but did not divulge anything more.
Read more: Minimum wage to rise 6.7% as National Insurance hike confirmed
And in a response to a question on this topic, a DH spokesperson told C+D that “the necessary decisions we took at the budget allowed us to invest an extra £26 billion in health and social care”.
“This extra cash allowed us to announce a record-breaking funding package for community pharmacy for 25/26,” they added.
“This signals the government’s first step towards rebuilding community pharmacy for the long term as part of our Plan for Change.”
“Critically underfunded”
Community Pharmacy England (CPE) last week (April 4) also addressed whether the 2025/26 funding deal accounts for the NICs increase, saying that “the settlement represents the largest uplift that could have been secured for the sector and the largest uplift across any part of the NHS”.
But it added that “this uplift is not allocated against any specific costs (such as wage rises or national insurance rises) rather it is part of a wider recognition that the sector has been critically underfunded for many years”.
Read more: ‘Last resort’: Government faces judicial review over NICs hike
“The government has confirmed that this is just the first step towards realigning the funding and operational model of the sector to deliver a sustainable and healthy pharmacy service for pharmacy owners, the NHS, and patients,” it added.
So where does this leave us now? Well, it seems the sector is none the wiser on how they are going to cover these additional costs. And it’s possible they may not get anything more than what was set out in last week’s funding deal.
