Pharmacies: Government Funding

Lee Dillon Excerpts

Wednesday 9th September 2026 Westminster Hall

[Mr Lee Dillon (Newbury) (LD)]

It is a pleasure to serve under your chairship, Mr Betts. I thank the hon. Member for Leicester East (Shivani Raja) for securing this important debate. I declare an interest as a vice-chair of the APPG on pharmacy, my colleague on which, the hon. Member for North Somerset (Sadik Al-Hassan), I am happy to follow.

For many residents in rural constituencies such as mine, local pharmacies are the first, and often only, point of contact with the NHS. Longer distances to travel, limited public transport and patchy digital connectivity mean that the trusted and timely in-person service that they provide for our communities is vital. However, access is thin on the ground.

Analysis by the National Pharmacy Association has described west Berkshire as England’s “pharmacy desert”, with the lowest number of pharmacies per head of any council area. To put that in context, the UK average is about one pharmacy to every 4,600 patients; in my constituency, it is one to every 7,200. Twelve pharmacies still open their doors to residents across Newbury and west Berkshire, and they do essential, extraordinary work. They dispense more than 111,000 prescriptions every month and deliver enough consultations through Pharmacy First to save more than 8,000 GP appointments, all while acting as a specialist and friendly front door to our NHS.

Like many here, I welcome the Government’s recent investment in the sector. We have heard the cash figures, but the 10.3% uplift for 2026-27 is the largest increase anywhere in primary care this year, and the move to expand prescribing rights is a vital step in the right direction. However, a positive uplift does not in isolation deliver the sustainable settlements that pharmacies desperately need. Pharmacies cannot plan their workforce or their services throughout the year when settlements are negotiated and have to be fought for year by year. Nationally, we have lost over 1,300 pharmacies since 2016, and this year’s uplift will not plug the underlying funding gap, which now stands at over £2 billion. It is no wonder that Community Pharmacy England accepted this year’s deal on the condition of further reform, stating clearly:

“Accepting this deal does not mean we think it is enough”.

With budgets stretched, that instability is compounded by broken medicine supply chains and a framework that leaves many pharmacies in the impossible position of dispensing medicines at a loss. On visits to Lambourn pharmacy and MedWell chemist in Newbury, staff told me that current funding would quickly be absorbed by rocketing drug prices, with some pharmacies paying 14 to 15 times more for prescription medicine than at the start of the year. In rural areas, where proximity to provision is already paramount, older residents in particular cannot afford to lose access to their prescription because their pharmacy down the road has been priced out of existence. Despite those challenges, pharmacies are doing incredible work, and I know how much residents across Newbury and West Berkshire value their expertise and care.

In September 2024, the Government commissioned the Lord Darzi report, which rightly acknowledged the huge potential of pharmacies within the NHS. Two years on, with a workforce eager to do all it can, that potential remains unfulfilled—not for a lack of experience and care, but because of a lack of investment from the centre. The 10-year health plan’s ambition to shift care from hospitals into communities is absolutely the right one, and pharmacies are the linchpin of that push. As their responsibilities continue to rise, so must the Government’s backing. Pharmacies have spent the last 10 years being squeezed to near breaking point; the next 10 and beyond must be different.

I therefore ask the Minister to launch a strategic review of medicine supply, including reforms needed to build domestic manufacturing capability, and to commit to an above-inflation multi-year funding settlement that allows pharmacies to continue to serve my constituents and millions of patients across the country for decades to come.

--- Later in debate ---

[Mr Gagan Mohindra (South West Hertfordshire) (Con)]

It is a pleasure to serve under your chairmanship, Mr Betts. I congratulate my hon. Friend the Member for Leicester East (Shivani Raja) on securing such an important debate.

Supporting our pharmacies is one of my long-standing commitments; I have spoken about the issue many times in the Chamber. Pharmacies are at the heart of primary care, and I am grateful for the contribution they make to our community—dispensing medicines, delivering vaccinations, offering advice for minor conditions and providing clinical services that would otherwise need to be delivered elsewhere. Pharmacies are accessible and embedded in our high streets. For millions, they are the front door to the NHS.

I have had the pleasure of speaking to pharmacists from across my South West Hertfordshire constituency, visiting Abbey pharmacy in Abbots Langley, Boots in Kings Langley and Esom pharmacy in South Oxhey, and even undertaking work experience at Riverside pharmacy in Rickmansworth. As I have said in Parliament before, my discussions have made it clear that our pharmacies are under unsustainable pressure as a result of the Labour Government’s continued attack on retail businesses.

I welcome the commitment in the Government’s 10-year health plan to move more healthcare responsibilities from hospitals into our communities, but that is not feasible unless pharmacies receive the necessary financial support. It is important to note that community pharmacies have not been exempted from any of the Government’s harmful economic policies against retail businesses. Since the Government’s announcements at the autumn 2024 Budget, their employer national insurance contributions and national living wage have increased, and their rate of business rates relief has reduced. Pharmacies now face significantly higher operating costs.

[Mr Dillon]

Lambourn pharmacy, which I mentioned earlier, worked out that about 90% of its profit came from serving the NHS and only 10% came from shampoo and other things, so it wonders whether the Government could pro rata those NI and other costs, meaning that they are paid only on the 10%. Would the hon. Gentleman welcome that type of approach?

[Mr Mohindra]

I am very conscious that I have a former Chancellor and Prime Minister, my right hon. Friend the Member for Richmond and Northallerton (Rishi Sunak), sitting to my left; he might argue for keeping it simple. I would argue that a pharmacy’s primary business is healthcare related, and that either we support our healthcare system or we do not. Doing it piecemeal is not in the best interests of what some of my residents regard as the frontline of the NHS system.

In the past 12 months alone, more than 600 neighbourhood pharmacies have closed. That looks set to worsen, because business rates relief for retail businesses has been removed for this financial year—a significant shift from the 75% business rates relief afforded to retail businesses in 2024 under the previous Conservative Government. Although GP practices can have their business rates reimbursed by the NHS, and NHS dental practices can also qualify for reimbursement, community pharmacies receive no equivalent compensation, despite providing NHS services every day, as has been mentioned. How is this fair or reasonable at a time when the Government are shifting more responsibility to the sector?

I have also been in contact with Community Pharmacy Hertfordshire. Although the 2026-27 community pharmacy contract provides additional investment in community pharmacies, it still falls short of what is needed to put the framework on a sustainable financial footing. Research conducted by the Independent Pharmacies Association, which has done a brilliant campaign on this matter, shows that an average pharmacy dispensing 10,000 items a month still faces a shortfall of £56,000 against what would be needed to keep pace with inflation—a very stretched financial situation.

When I met with the previous Minister for Care, the right hon. Member for Aberafan Maesteg (Stephen Kinnock), earlier this year, I was disappointed that he could not outline clear steps as to how that situation could be alleviated. Without a sustainable, longer-term funding settlement, more pharmacies risk closing at the same time as the NHS is asking the sector to do more.

It is also disappointing that the Government have delayed Pharmacy First payments. Under the previous Conservative Government, the Pharmacy First initiative was introduced to allow community pharmacies to support patients with common conditions, reducing the pressure faced by our GPs. Now, many pharmacies I speak to have said they are struggling to deliver this service as a result of the Government’s withholding of funding. The impact of pharmacies in delivering primary care should not be underestimated. Shifting more flu vaccinations into pharmacies could free up around 4.5 million GP appointments each year.

In conclusion, pharmacies are accessible and already have the infrastructure and clinical expertise to provide more care closer to home. However, patients will benefit from an expanded role for community pharmacies if their pharmacy stays open. Currently, with unsustainable operating costs and limited Government funding, that has become increasingly difficult. Without the financial support to deliver these services, many pharmacies risk closing. If the Government want to shift care from hospitals into communities, the funding must follow.