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Community pharmacy representatives are calling for funding support towards employer national insurance contributions ahead of the planned 1.2% increase from 1 April 2025.
Martin Green, chair of Community Pharmacy Scotland, was among 48 signatories of a joint letter, published on 3 January 2025, that was sent to chancellor Rachel Reeves, which raised concerns over the impact of the impending increase and called for funding to fully cover the additional costs being faced by public sector and voluntary organisations.
The letter was sent by John Swinney, first minister for Scotland, and Shona Morrison, president of the Convention of Scottish Local Authorities. It was co-signed by Optometry Scotland, the Scottish Dental Practice Committee of the British Dental Association, and several other public bodies and charities.
In the letter, Swinney said: “We will continue to press the UK government to raise our deep concern about the implications of the increase to employer national insurance contributions for organisations across Scotland and the risk to the vital services they provide if these additional costs are not fully funded.”
Under the 2024 autumn budget, set by the UK government, employer ‘class 1’ national insurance contribution rates will rise from 13.8% to 15.0%, while the national living wage will increase to £12.21 per hour.
Mark Griffiths, chair of Community Pharmacy Wales (CPW), co-signed a similar letter in December 2024, jointly written with the British Dental Association Wales and Optometry Wales, urging Jeremy Miles, cabinet secretary for health and social care, to “address this wholly unacceptable financial burden”.
In the same month, Miles confirmed that Welsh community pharmacies will receive a 6% funding increase aimed to address “immediate pressures” and contribute towards long-term reform plans.
Despite the uplift, a spokesperson for CPW signalled “serious concerns” about the implications of the national insurance and national minimum wage increases.
“Action needs to be taken now to avoid contractors being forced to make business decisions in advance of 1 April 2025, which will undoubtedly compromise their ability to continue to offer the range of clinical services and support that is currently available,” they said.
In November 2024, a group of pharmacy representative bodies in England wrote to health secretary Wes Streeting, warning that the 2024 autumn budget had the potential to cost community pharmacies £200m per year in unplanned expenses.
Results of a poll on winter pressures by CPE, published in December 2024, revealed that 70% of pharmacy owners were concerned about the impact financial pressures may have on patient safety.
In the same month, Janet Morrison, chief executive of CPE, wrote to ministers warning that the sector needed an immediate injection of funding to prevent collapse.
A spokesperson for CPE said: “Since the autumn budget, CPE has been working to ensure that the impact of the budget changes on community pharmacies is fully understood by government, including the impact of changes to national insurance contributions, and to press them to take action to mitigate this impact. This has included much work to reach out to ministers, MPs and others who can help influence policymakers.”
They added: “[CPE] will continue to raise the seriousness of the impact of the budget changes on community pharmacies with government, as well as highlighting it through our wider parliamentary and media work.”
A spokesperson for the Treasury said: “The budget delivered more money than ever before for devolved public services and the devolved governments receives over 20% more funding per person than equivalent UK government spending. It is for the devolved governments to allocate this across their own public sectors and meet the priorities of their people.
“The devolved governments will also receive additional Barnett [Formula] funding on top of their record settlements as part of support provided in relation to changes to employer national insurance.”
The Barnett Formula is used by the government to distribute a share of additional funding to the devolved nations.
