A welcome increase to the Employment Allowance from April will not be enough to relieve the ongoing financial pressures hitting community pharmacies, the National Pharmacy Association has said.

Responding to chancellor Rishi Sunak’s spring statement, NPA chief Mark Lyonette said the decision to increase the employment allowance from £4,000 to £5,000 was a “piece of good news”.

The allowance provides relief on National Insurance payments for smaller businesses. Mr Sunak described the announcement as a “new tax cut worth up to £1,000 for half a million small businesses”. 

However, Mr Lyonette said the spring statement does nothing to tackle the rising business costs making some pharmacies unviable: “The chancellor made a big play about addressing the cost of living crisis, but there is also a business costs crisis that is squeezing the life out of many independent community pharmacies.

“Utility bills, locum fees and business rates are all taking their toll, and NHS funding is nowhere near keeping up with the inflationary pressures in our sector.

“As the Government’s recent hub and spoke impact assessment shows, further efficiencies will be hard for pharmacies to achieve.

“So the inevitable result of decreased funding and spiralling business costs will be a diminished service and permanent closures.”

Meanwhile, Royal Pharmaceutical Society England board chair Thorrun Govind said the chancellor needed to look “beyond headline figures on capital spending” and rethink how prevention and personalised healthcare are delivered.

Ms Govind called for greater investment in pharmaceutical services, saying: “Medicines account for billions in spending each year and pharmacists are crucial in delivering the best value for patients and taxpayers, so we need to see more than piecemeal investment in the pharmacy workforce.

“Pharmacy education reforms will only be a success if they are backed by increased funding for experiential learning in pharmacy schools, alongside investment to support professional development.”

Amid reports the Government may be planning to force people aged 60-65 to pay prescription fees from April, Ms Govind also urged the Government to scrap the charge in England, saying patients “should not be taxed for being unwell”.

PSNC chief Janet Morrison said: “Community pharmacy owners, and all who work for them, are under an enormous amount of pressure at the moment.

"They will rightly feel that they are being taken for granted, and they will be disappointed that once again they warranted no mention in the Chancellor’s statement.

"Pharmacy owners have made astonishing efficiencies over the past few years, but they now need to be treated like the valuable NHS colleagues that they are and given help to meet spiralling costs and to manage inflationary pressures."