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Unhappy (and that's an understatement)

Minor Fiscal Event? More like Major F***ing S**tshow

By Outsider

Imagine the scenes. PSNC Towers in the middle of May, Spring has sprung. A new pusher of the big pen, just settling in behind the desk. The fabled negotiating team has just completed its deliberations on the next phase of the contract settlement. The final offer is on the table.

In isolation, it’s not disastrous. In fact, it claws back some otherwise anticipated losses on margin. Service development continues as agreed. MUR and Establishment Payment monies that should have been lost 18 months ago are still protected. Yet everything has changed. 

In 2019, inflation was low, debt was cheap and whilst Brexit was a constant narrative in the news, it wasn’t a real thing. How times change. 

There was some consternation in the pharmacy sector about some of the implications of the five-year contract, but it was better than – well, whatever was worse. At least in these pages the progressive nature of the service development proposals were positively received. As was the recognition that if circumstances changed massively, either side could trigger a review of the financial envelope of £2.592 billion. 

As it happened, times do change. Russia’s invasion of Ukraine has led to a surge in European gas prices just as businesses were eyeing an end to Covid costs. Fuel costs have rapidly increased, which means all costs have increased. Do not worry though, remember that review option – clearly that will protect contractors in this extraordinary financial climate. Surely. 

In May, the people in those seats agreed this settlement between themselves. They did not make this decision public.

Turns out PSNC didn’t even bother asking for a review. It did previously ask for a review over Covid costs and apparently fell out with the Government so didn’t bother to even try this time. This is your crack negotiating team. These are the people the sector are just about to hand an extra £1.5 million a year to. Yet on this simple thing they appear to have missed the boat. Or the tide. Or the point. They have not managed to crack the Government view that a £2.592bn contract that you agree for five years remains a £2.592bn contract. Even if it costs you more. 

And there’s more. Instead of making £800m in margin, contractors are on track to make too much – or already have done. The bean counters aren’t sure, but they are sure that the figure is a nice round £100m and it’s important. 

There are 31 seats on the Pharmaceutical Services Negotiating Committee. In May, the people in those seats agreed this settlement between themselves. They did not make this decision public. At the same time, they were publicly campaigning for the sector to support the changes to sectoral representation that would increase their funding by £1.5m a year. No-one knows why the committee did not announce the settlement they agreed in May, in the middle of the RSG process. No-one. 

Fast forward three and a half months. It is the morning of the LPC Conference. The new secretary of state for health is doing the media rounds about how the new administration will rectify GP waiting times and says that community pharmacy will step up. The new contract settlement has just been signed off. Live on BBC Breakfast

The sparkling water is being broken out in PSNC Towers. Pharmacy is riding to the rescue of the NHS again, just like in the pandemic. Then the deal is published. 

Contractors who feel they have stood up for the NHS over the last two years and are now facing increasing costs across the board see there is no new money. There are promises of a review of this, a review of that. Nothing concrete. Nothing to pay the gas bill with today.  

Of course there is no more money. Well, apart from that pesky margin thing. But no real new money. After all £2.592bn is £2.592bn. And every single member of PSNC knew this three years ago. Especially the members of the negotiating team. 

Now, say hello to the Association of Independent Multiple Pharmacies (AIMp). They represent around 20 per cent of pharmacies and are represented on PSNC. They say the deal is a “devastating blow” and “the biggest disservice ever done to pharmacy, and it was done by our own negotiator”. AIMp has representation in the negotiating team. They have known about this deal since May. They agreed this deal. 

Seeing two national representative bodies fight in public is not a good thing. Seeing it live, across social media, the same day the Government deals another joker to the card table that is the economy, is not the leadership the sector wants or needs. 

The headlines on Friday 23 September 2022 were all about what the ‘Minor Fiscal Event’ meant for the UK economy. For pharmacy, the real story was about the Major F*****g S**tshow, as the sector turns against itself yet again. 

Outsider is a community pharmacist

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