IMPORTANT – Change to Community Pharmacy Contractor Levy for Hertfordshire LPC in 2019/20

IMPORTANT – Change to Community Pharmacy Contractor Levy for Hertfordshire LPC in 2019/20

May 2, 2019

Hertfordshire LPC is funded by a statutory levy which NHS England (managed through the NHS Business Services Authority) is empowered by regulation to deduct from the remuneration paid to community pharmacy contractors.

The levy is currently set at 0.14% (14p per £100 of net ingredient cost) and as contractor’s fees have decreased, so has the LPCs’ income decreased. In 2014/15 the LPC received an annual levy of £252,000. In 2018/19 we predict levy receipts for the year to be £231,000. We estimate this will further decline in 2019/20. The cost of supporting community pharmacy contractors has increased during this period, but we have been extremely diligent in managing the LPC’s (and therefore community pharmacy contractors’) resources to retain an adequate cash reserve. As a result, we have not needed to increase the levy for community pharmacy contractors for 11 years.

In light of the continued challenges facing community pharmacy, including implementation of the NHS Long Term Plan, engagement with Primary Care Networks (PCNs) and work with the Sustainability and Transformation Partnership (STP), it is clear that the voice of community pharmacy through the LPC is of critical importance now more than ever.

We need a strong and financially viable LPC in order to engage with all partners, stakeholders and commissioners to identify and deliver local opportunities for our community pharmacy contractors and to help facilitate change within community pharmacy practices.

To ensure that the LPC is providing the best support it can to Hertfordshire community pharmacy contractors, and that it can continue to be effective in the future, the Executive Team at Hertfordshire LPC has undertaken a detailed review and capacity plan over the past six months. This has included reviewing the resources of the LPC office, LPC members and LPC officers in consultation with all LPC members. The culmination of this capacity plan was considered at the March 2019 committee meeting.

The following decisions were unanimously approved after detailed debate:

  1. A financially sustainable and equitable expenses policy for members and officers.
  2. A vision of a future office structure that could sustain the energy and capacity needed to promote community pharmacy as a credible provider of services for the benefit of patient outcomes, and as an integral part of local health and social care.
  3. A zero-based budget for 2019/20 with a move to a fixed LPC levy, a method already implemented by a majority of LPCs. A budget of £252,000 for 2019/20 was approved which, while drawing heavily from reserves, will retain a minimum three-month reserve to support implementation of the anticipated office structure.
  4. A fixed levy method so the LPC only collects that which is operationally required.

What is the financial impact for community pharmacy contractors in 2019/20?

  • The levy would not be fixed for contractors and would still be based upon the number of prescription items per pharmacy as is currently undertaken.
  • The newly agreed method would increase the contribution by approximately £8 per month for the average contractor dispensing 7000 items in 2019/20 from 1 July 2019.
  • Contractors have an opportunity to comment on the fixed levy prior to implementation on 1 July 2019.

Hertfordshire LPC is keen to ensure openness and transparency of our finances and activities to all and we regularly publish an annual report that includes this information available on our website. The annual report for 2018/19 will be published in early June 2019, with our AGM being held on the evening of Thursday 4 July 2019.

We would welcome your thoughts through a committee member or Helen Musson, Executive Officer via the LPC office.




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