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The Government’s pledge to raise the national living wage by 4.1 per cent from April will “add significantly” to the financial pressures pharmacy owners face, the National Pharmacy Association has said.  

Chancellor Rachel Reeves’ autumn budget announcement revealed that the national living wage (NLW) earned by over-21s will go up from £12.21 an hour to £12.71, while the rate for 18 to 20-year-olds will go up from £10 to £10.85, an 8.5 per cent increase. 

The NPA warned that a further hike to pharmacy contractors’ running costs (the NLW rose by 6.7 per cent on April 1 this year) could force business owners to lay off staff and urged the Government to invest in the sector to avoid this outcome. 

NPA chief executive Henry Gregg said: “Pharmacy staff across the country are absolutely deserving of a pay rise, but the increases announced today will add significantly to the financial pressures pharmacies are under as businesses and as a core component of the health service across the UK. 

“Adding four per cent-plus to the minimum wage makes the financial mountain they are facing even bigger.

“The chancellor has said that getting NHS waiting lists down is one of the Budget’s key objectives. We therefore urge the Government to invest in community pharmacies, so they can relieve pressure on our overstretched hospitals and GPs.

“The Government has promised that reorganising NHS England and other administrative reforms will unlock a billion pounds a year by the end of this parliament.  The NPA wants any savings to go straight to the front line of care in our communities, which includes our beleaguered community pharmacies, so patients quickly feel the benefits.

“Despite a funding increase in the Spring pharmacies in England are still facing the legacy of historic underfunding that has closed more than 1,000 pharmacies”.

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“Today’s Budget will once again impose higher staffing costs on community pharmacy businesses through the increase to the National Minimum Wage," said Community Pharmacy England chief Janet Morrison.

Ms Morrison added: "This is very concerning, and may prove unmanageable for some pharmacy owners as they continue to grapple with extreme financial and operational pressures. 

"Pharmacies are still feeling the impact of historical 30 per cent real terms funding cuts, and despite a significant funding uplift in April, their annual NHS funding this year falls more than £2 billon short of full economic costs.

"In that context, it is no surprise that more than 80 per cent of pharmacy owners are concerned about their businesses going into this winter.

"We continue to hear about pharmacy owners struggling to pay themselves and their wholesaler bills, and to keep their doors open. Higher staffing costs will further compound their financial troubles.

"We will ensure that ministers know the impact that this Budget will have on community pharmacies, and remind them of the huge benefits that investment in community pharmacies would bring."

Baroness Philippa Stroud, chair of the Low Pay Commission, commented: “The recommendations published today are a product of diligent study of the evidence, careful reflection and significant negotiation. Our advice balances the Government’s ambitions with the need to protect the economy and labour market, with rates that are fair and realistic

“In our discussions this year with workers and employers alike, it has been clear that no one is having an easy time. Despite sustained real increases in the minimum wage, low-paid workers are still challenged by the cost of living crisis. At the same time, employers, particularly small businesses, are under real pressure, exacerbated by this April’s National Insurance changes.

“While GDP growth over the past year has been mixed and the labour market has softened, our judgement is that the recent NLW increases have not had a significant negative impact on jobs."

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