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I beg to move,
That this House has considered Government funding for local pharmacies.
It is an honour to serve under your chairmanship, Mr Betts. I am pleased to have secured this debate, and I thank colleagues from both sides of the House for joining me to discuss this vital pillar of our primary care network.
Community pharmacies are the frontline of healthcare in our constituencies. In Leicester East, they are not just commercial premises but places that serve the very heart of our community. It is estimated that 1.6 million people access pharmacy services in neighbourhoods every day, ranging from elderly residents accessing swift advice to busy families picking up emergency prescriptions and vulnerable constituents using the opportunity to receive healthcare close to home without needing a GP appointment.
Despite that, in Leicester East and across the country this crucial sector is reaching a tipping point. Independent economic analysis of community pharmacy finances for the NHS revealed that community pharmacy is facing a funding gap of around £2.5 billion. As a consequence, England lost roughly 1,000 pharmacies between 2016 and 2026, which is an 8% decline. In Leicester East, we have seen our local provision drop from 32 pharmacies down to 29, which is a net loss of 9% of our local community network.
Behind the numbers is a harsh reality for a vast number of people. We have to consider not only the impact of small business closures on our local high streets, but the everyday consequences for residents who rely on pharmacies for their care. A loss of three pharmacies may sound like a minor shift, but the real implication is deeply concerning. Fewer pharmacies means longer journeys for frail patients, longer queues at the counters that remain open and increased pressure on nearby GP surgeries that are forced to pick up the slack.
We have seen a 19.5% increase in online pharmacies since 2021, and although it is positive that medication and assessments can be accessed in that way, it must be a priority for the Government to protect in-person high street chemists. The closures are obviously not due to a lack of demand. People across my constituency recognise the importance of local pharmacies and use their services constantly. The reason for the closures lies in the structural financial strains that make running an independent pharmacy untenable.
My team and I have had several conversations with the owners and staff of pharmacies across Leicester East, and I recognise and thank them for all their hard work on the frontline of our healthcare provision. They have raised several alarming issues; I hope that, by outlining them today, we can collectively commit to positive and constructive changes to support these independent businesses.
The current reimbursement model for medicines is the first aspect of the system that fails independent providers. As it stands, pharmacies are expected to buy medicines up front. They can then wait anywhere from two to three months for the NHS to reimburse those costs. To make matters more severe, the NHS reimbursement calculation works on the assumption that pharmacies receive massive bulk-buy discounts from suppliers. Large national chains may possess the purchasing power to make that assumption work, but such bulk discounts simply do not exist for a small, independent community pharmacy in Leicester East. Small pharmacies routinely pay more to acquire necessary drugs than the NHS repays them.
Although concessionary pricing mechanisms exist to adjust for market spikes, the delay in the adjustments means that independent contractors are constantly left bridging the shortfall. That disparity forces wholesalers to look overseas for cheaper stock, creating supply chain bottlenecks and leaving local pharmacists to face the frustration of patients when vital medicines are backordered for weeks.
The Independent Pharmacies Association recently conducted research that shows that an average pharmacy dispensing 10,000 items a month still faces a shortfall of circa £56,000 compared with what is needed to keep in pace with inflation. Pharmacies cannot be expected to continue to foot this bill. The Government must do more to ensure that pharmacies are properly reimbursed, to prevent further pressure and demand on other areas of our NHS.
On top of the margin pressures, pharmacy owners in my constituency are caught in a constant struggle between rising operating costs and completely fixed incomes. Over recent years, overheads have increased right across the board. The recent decisions to raise employer national insurance contributions and the minimum wage and to escalate business rate liabilities have significantly increased the financial burden on pharmacies up and down the country. Furthermore, unlike other small high street businesses, community pharmacies receive no business rates reliefs on their premises—a major oversight for essential healthcare providers operating right at the heart of our local economies.
When running costs go up for a normal high street business, such as a local shop, café or dry cleaners, it can adjust its prices to cover higher wage bills and energy costs. Independent communities pharmacies cannot do that. Their primary income is fixed directly by the Government tariff. When employment taxes increase or utility bills rise, independent business owners cannot pass those costs on. They must absorb the loss directly until their reserves run dry.
I welcome that our new Prime Minister has introduced business rates relief for the leisure and hospitality sector, but does the Minister agree that we must also introduce further assistance for the pharmacy sector? GP and dental premises benefit from the NHS reimbursement of business rates, while community pharmacies, which also provide vital frontline services, do not. Introducing a form of relief to end the disparity for local pharmacies would make a substantial difference.
In addition to the fixed margins, the current funding framework expects community pharmacies to deliver essential services at a financial loss. For example, home delivery services for housebound or vulnerable residents became vital during the pandemic, and remain a crucial lifeline for many elderly constituents across Leicester East, but local pharmacies receive no core NHS funding to run delivery vehicles or pay driver wages. They fund the operations entirely by themselves, committing their own profit to ensure that vulnerable patients receive their medication on time.
In addition, pharmacy owners have described how, although the Government support preventive clinical services, the rules and restrictions imposed are unnecessarily constraining. It is positive that vaccinations and immunisation are being moved into pharmacies, but the Independent Pharmacies Association suggests that shifting more flu vaccinations into pharmacies could free up around 4.5 million GP appointments each year. As we approach winter and flu season, the Government should seriously consider the benefits of reallocating services, and ensure that proper funding is in place to back up the increased expectations.
Blood pressure screening is another service that is being redirected to pharmacies. It is a simple, cost-effective way to catch cardiovascular issues early and prevent avoidable hospital admissions, yet under the current NHS caps reimbursement is limited to just one check per patient every five years.
No small business can survive indefinitely when its costs are rising, its prices are frozen by the Government and it is expected to deliver services for free. This financial pressure feeds directly into an acute workforce crisis. The pharmacy pressures survey published by Community Pharmacy England revealed stark results: 60% of pharmacy teams reported active staffing shortages, and 54% of owners said they were struggling to recruit permanent staff. Crucially, more than 80% reported longer patient wait times and more than half acknowledged that shortages were reducing their ability to offer direct advice.
We are also seeing a troubling rise in temporary closures, when a pharmacy must shut its doors for hours or days at a time simply because it cannot secure a qualified pharmacist. The freedom of information data collected by Healthwatch across various integrated care boards revealed that, in a single year, there were nearly 14,000 temporary closures across England, resulting in over 46,000 lost hours of care.
Without strategic planning for staffing, the long-term future of our community pharmacies remains deeply uncertain. The Company Chemists’ Association estimates that England could face a shortfall of 16,000 community pharmacists by 2036. While it is positive that thousands of pharmacists have been recruited into the GP practices via the additional roles reimbursement scheme, we must be careful not to strip our high street pharmacies of the very talent they need to remain open.
As the long-awaited NHS long-term workforce plan continues to undergo revisions, it is vital that the Government give sufficient priority to the baseline staffing needs of community pharmacy. We know that expanded training targets and the roll-out of independent prescribing qualification upon registration present a real opportunity to expand clinical care on our high streets. Similarly, recent regulatory challenges to allow pharmacy technicians to supply specified medicines and deliver services under the Pharmacy First scheme have the potential to free up valuable pharmacist time. But none of these reforms will succeed if the underlying pharmacy network is allowed to shrink due to unfunded operational mandates.
I want to be entirely fair to the Government and to Ministers and acknowledge that we have seen some positive movement in this policy area. Progress is being made, but we must ensure that the pace of our action matches the urgency of the situation before us. The community pharmacy contractual framework—CPCF—settlement for 2026-27 secured almost £3.7 billion for the sector, which is a £340 million increase on the previous year. That builds on the two-year agreement that saw funding rise in previous settlements. Pharmacy trade bodies have expressed concern, however, that the funding uplift will not be sufficient to support the introduction of independent prescribing. We must ensure that the new expectations placed on pharmacies to share services are matched by funding commitments.
We have also seen practical relief in the write-off of historic pandemic-era medicine margin debt, and in adjustments to the single activity fee. Furthermore, the roll-out of the Pharmacy First scheme has demonstrated the real appetite for community-level care. Across England, more than 10,900 pharmacies are participating, delivering millions of consultations for common conditions like earache, shingles and minor infections. That is a demonstration of real and effective triage that takes pressure off A&E departments and GP surgeries.
However, we must listen to what sector stakeholders are telling us. Community Pharmacy England welcomed the recent funding adjustments as a step away from real-term cuts, but was explicit that this was a “first step” towards stability and not the final destination. The National Pharmacy Association made the same point: structural underfunding means that current settlements will struggle to match the “true cost” of service delivery. The Health and Social Care Committee was blunt in its analysis, describing the current CPCF funding model as “not fit for purpose” and “overly complex”.
A major flaw in the scheme is that pharmacies only get paid for many clinical services if local GPs or hospitals actively refer patients to them. In practice, that leaves independent business owners completely dependent on someone else’s admin system, meaning many pharmacies are fully staffed and ready to treat people but receive zero referrals simply because a local surgery is not using the system properly.
The current policy framework is simply not delivering for our high streets, and we need an operational model fit for the next decade. If we want pharmacies to continue delivering on the frontline, expanding Pharmacy First, delivering preventive health checks and taking pressure off our local GP surgeries, we must fix the underlying economic model that keeps their doors open.
As a Conservative, I believe in supporting small business owners, encouraging enterprise and removing unnecessary administrative barriers. High street pharmacies are independent businesses delivering frontline public care efficiently, but when Government policy sets fixed tariffs while escalating business rates liabilities and employment taxes, it creates a system that actively undermines independent providers.
I ask the Minister to address four specific, practical areas today. The first is reimbursement reform. We must review the drug reimbursement formula and concessionary pricing mechanisms, so that payment calculations reflect the actual market acquisition prices paid by the independent pharmacies, rather than relying on assumed bulk discount rates that small independent businesses simply cannot access.
The second area is contractual and operational certainty. We need to update the CPCF to ensure that core funding is predictable, transparent and fair, rather than heavily dependent on variable, patchy referral targets managed by NHS bodies over which pharmacy owners have no control.
The third area is business overhead and rates relief. I urge the Minister to work with colleagues in the Treasury to address the cumulative tax and cost burden facing small health providers. That includes reviewing business rates liabilities and the impact of the employer national insurance contribution increases on independent high street providers.
The final area is workforce and capacity support. NHS workforce planning must balance the expansion of primary care roles with the baseline staffing requirements of high street community pharmacies. As policies such as independent prescribing expand, Ministers must ensure that independent pharmacies are provided with the direct resource and funding needed to put clinical roles into practice safely.
Community pharmacies are one of the most cost-effective, high-impact assets that our healthcare system possesses. They keep people well, they prevent avoidable emergency admissions, and they give local high streets across Leicester East and the country vital commercial and civic life. The current approach needs real correction to ensure that independent business owners and patients are properly supported. I look forward to hearing the Minister’s response, and I urge the Government to give our local pharmacies the financial certainty and stability that they desperately need and deserve.