Funding of LPCs and Community Pharmacy England

The levy funds the administrative running costs of the LPC, including members’ expenses and meeting the costs of Community Pharmacy England, to conduct national negotiations, make representations and provide support on behalf of all pharmacy owners in England.

LPCs are responsible for agreeing their own budgets and setting the levy. Budgets must follow a business planning cycle, with scrutiny from LPC Finance & Audit subcommittees and approval by the full LPC. This may involve reviewing levy levels and justification to pharmacy owners.

LPCs are required to use a standard template provided by Community Pharmacy England and send copies to NHS England, who authorise the NHSBSA to deduct it from pharmacy owners’ gross monthly contract payment.

You should be able to find further information about your LPC’s finances, such as financial statements and annual reports on their website. Community Pharmacy England has provided extensive support information to LPCs, to help support robust financial governance and reporting, including a Finance Guide, standard templates and guidance on holding reserves.

In 2024/25 LPCs in England collected around £12.5m from pharmacy owners in England to fund representation and support. The LPC network collectively retained around £7.8m for local use (returning approx. £30m to £60m of annual income to pharmacy owners) and passes around £4.7m to Community Pharmacy England (returning over £3bn of annual income to pharmacy owners). LPCs work in close collaboration with Community Pharmacy England on many areas of joint work and to ensure pharmacy owners can access over £250m of service income that may require local referrals and work with the local NHS.

The payment is apportioned according to the pharmacy owner’s share of total available NHS income in the LPC area. Levy payments are always taken by NHSBSA at contract level in line with the FP34 Schedule of Payments and paying the totals over to the LPCs on a monthly basis.

Illustrative example:

• Your turnover for month at your Pharmacy: £70,000
• Total NHS income paid to pharmacies in the LPC area: £17,600,000
• Your share: £70,000 / £17,600,000 = 0.003977 = 0.3977%
• LPC levy taken from all pharmacies monthly: £17,500
• Your contribution payment: 0.003977 x £17,500 = £69.60

LPCs can decide between two main ways of collecting levy from pharmacies.

Statutory – percentage variable of the monthly contract value (e.g 1p per £100 =0.01%)

Statutory – fixed amount to be collected by the LPC, apportioned across each pharmacy contract according to share of total NHS income in the area.

Illustrative example describing a levy increase:

Suppose the LPC total levy rises (for examaple because the committee approves a budget uplift, to fund increasing local costs, or to Community Pharmacy England) from £17,500 to £19,000, and your own income stays at £70,000, while another pharmacy’s income grows.

• Your share will fall slightly (because total income available to pharmacies in the LPC area went up but your income didn’t).
• Even though the levy rose, your £ payment doesn’t have to increase; it could stay similar or even decrease, because your lower share is multiplied by the higher total.

For an illustration, assume total NHS income in the LPC area rises to £18,990,000 solely because another pharmacy/other pharmacies share grew (your £70,000 unchanged).

• New share: £70,000 / £18,990,000 = approx 0.3685%
• New payment: 0.003685 x 19,000 = approx £69.00

Result: The levy went up, but your payment slightly fell, because your share dropped.
Only the growing contractor (the one whose share increased) bears the increase.

Community Pharmacy England’s income is exclusively raised from pharmacy owners via a levy on all LPCs in England.

The levy is apportioned according to the % share of total NHS income available to pharmacy owners in each LPC area, e.g If pharmacy owners in LPC ‘A’ have 10% of the FP34C revenue then LPC ‘A’ pays 10% of the total Community Pharmacy England levy. This fair‑share model was consulted on and approved by the Conference of LPC Representatives (2022) and is the same basis as how LPC levy is collected locally.

There is an annual recalibration process, using the latest 12 months available pharmacy owner income data, using drug and appliance reimbursement plus fees and service income from contractors’ FP34 data. Therefore levy contributions vary based on income in each LPC area, ensuring proportionality but can cause perceived disparities among LPCs. However, updating levy calculations with recent income data helps maintain fairness across LPCs.

Put another way, the process has a redistribution effect for some LPCs, therefore, each LPC will have different % increase or decrease figures, because the proportion of national income that was collected by pharmacy premises in each area has changed (variety of factors such as changes in prescribing volume, prescribing mix, service uptake).

This fair-share method was subject to consultation with LPCs and agreed by the Conference of LPC Representatives in 2022, following the Review Steering Group proposals, which had the support of pharmacy owners.

In 2026/27 Community Pharmacy England will collect £4.9m via the LPC network and it will be apportioned across the 49 LPCs in England. Pharmacy owners will rightly want to understand how we will use our budget and feel confident that this levy directly supports work that benefits them. Our key priorities for 2026/27 are set out in full in our published vision, strategy and objectives.

Our latest Annual Report sets out how levies have been invested and the significant value generated for pharmacy owners, including £3.073 billion of baseline CPCF funding and £215 million for Pharmacy First and Primary Care Recovery services. Find out more about how we have previously invested levies and what we have achieved in two new explainers:

Community Pharmacy England’s investment priorities

Community Pharmacy England’s work

For 2027/28 the Committee will discuss budget, levy and workplans for the coming financial year at its February 2027 meeting and detailed information will be sent to LPCs in an annual planning letter shortly afterwards. In November 2026 indicative levy figures will be shared with LPCs as part of the annual levy planning lifecycle agreed with LPCs, as follows:

1. October: Recalculation of Levy Baseline
   Each October, we calculate levy figures using the latest available NHS contractor income data. This ensures the levy remains fair, accurate, and aligned with changes in contractor income across England.
2. November: Publication of Indicative Figures
   In November, we publish indicative levy figures for the year ahead to LPCs. These include early modelling based on initial CPE budget discussions, giving LPCs the information they need to begin their own budget planning with confidence. Our Audit and Risk Subcommittee scrutinise the budget in detail and workplan during this period, before committee approval.
3. January: Treasurer & LPC Planning Meeting
   Every January, we hold a planning meeting with LPC Treasurers and those involved in LPC finances. This session provides an opportunity to review the indicative levy figures in detail, discuss underlying assumptions, and raise any questions ahead of final decisions.
4. February: Final Budget & Levy Decision
   In February, the CPE Committee meets to finalise the annual budget and approve work plans. This determines whether the levy will increase, decrease, or be held. Final levy figures are then communicated to LPC, typically during the second week of February, so LPCs can confirm their own financial plans.

LPC numbers have reduced from 70 (pre‑Review Steering Group) to 50, with a further consolidation to 49 expected from April 2026 and potential movement towards 43-45 subject to further discussion and local agreement.

Levy Trends

Analysis of LPC financial data (2022/23-present) shows:

• Total levy collected across LPCs has ranged between £10.8m and £12.5m over the past three years. Average contractor levy has risen over the past three years and variability across the country remains significant requiring clear local justification.
• The share to Community Pharmacy England has increased in line with national investment commitments that were agreed by pharmacy owners through the RSG process and then our subsequent budgets.

Reserves

• LPCs collectively hold reserves at £10.3m at 31st March 2025, though levels have reduced slightly due to higher operating costs.
• Excess reserves above the former “6‑month rule” have fallen by over £1m.
• Average reserves per LPC have risen (driven by fewer, larger LPCs following restructuring).