CPE secures 10% funding rise, but pushes for reform
Announcement Summary
|
A funding settlement for community pharmacies in 2026/27 will be implemented from this month after Community Pharmacy England accepted the offer, on condition of a shared programme of reform with Government and NHS England.
The settlement will see the pharmacy funding budget increased by 10.3% this financial year (higher than the NHS overall increase), to £3.636 billion, alongside the introduction of Independent Prescribing into Pharmacy First and the Pharmacy Contraception Service later in the year.
The settlement also includes a £200 million uplift to the margin allowance and, in response to Community Pharmacy England’s representations, Government is also making a write-off of net contract (margin) over-delivery earned up to the end of March 2026 – saving pharmacy owners up to £239m more in recovery – in efforts to stabilise the increasingly volatile medicines supply chain.
Progress has also been made on regulatory changes, including:
- to allow pharmacies to close for up to 4 hours a month to support staff training;
- to allow late payment claims for Pharmacy First and NMS;
- to continue work to help to protect pharmacy staff from patient abuse and violence; and
- to continue work to stop the inappropriate management of EPS nominations by a small number of pharmacy owners.
Despite pharmacy being prioritised for a higher funding uplift than other parts of the NHS, and improvements to the final offer achieved during negotiations, Committee Members were very reluctant to accept the deal.
The funding available will cover growth in activity and inflation in the coming year, but does not make further significant progress towards delivering sustainability to an increasingly unstable sector.
Additionally, despite acceptance of the final CPCF offer, we are not persuaded that sufficient investment is being made to enable the full and effective introduction of IP within the CPCF, given the workload, enhanced clinical responsibility, clinical governance and infrastructure requirements that it will entail.
Throughout the negotiations, we raised our concerns that with the proposed funding, the addition of IP to the CPCF risked being set up to fail. It will be down to pharmacy owners to decide on an individual basis whether they want to provide the service or prioritise the use of IP skills elsewhere.
Community Pharmacy England has warned Government that the pressures on pharmacies will mean continued closures, reduced opening hours, deteriorating quality of service and risk unavoidable harm to patients. We will continue to press for the long-term sustainable solution that community pharmacies, and everyone they serve, needs, and for specific measures such as to improve medicines supply resilience, prevent pharmacies from having to dispense at a loss, and for further investment to support Independent Prescribing.
But we recognise that:
- Ministers have treated pharmacy preferentially for the second year running – the pharmacy funding uplift is the highest across primary care, and higher than that of the overall NHS.
- Ministers have committed to working jointly on reforms that will build the strategy for community pharmacy and explore alternative contract, funding and reimbursement models – which would have been impossible without constructive engagement with Government.
The Committee decided that stopping dialogue with Government was too risky for the future of the community pharmacy sector. They accepted the offer in order to secure a 10.3% funding increase to pharmacies as soon as possible, alongside beginning critical work on the future.
Given the scope and importance of the reform work, the Committee was not willing to risk undoing the progress that had been made with this Government in recognising the value of the sector and developing clinical ambitions for the future as set out in the 10 Year Health Plan.
Community Pharmacy England is now calling on the community pharmacy sector to come together on a radical programme of reform to inform future strategy and our work with Government. We will be inviting all sector bodies to put forward their ideas to plot a new direction of travel for the sector.
Summary of the 2026/27 Funding Settlement
|
Statements from our CEO and Committee Members
Janet Morrison, Chief Executive of Community Pharmacy England, said:
“This was a very difficult decision for Committee Members, who know themselves how serious the situation is for pharmacy owners – as evidenced again and again, including by the independent economic review – and understand why some have called for more radical action.
“But they also know that a 10% funding increase is significant in a tight Government spending envelope and should not be dismissed. It reflects the case we have made to Government and Ministers – over many months and years – to prioritise pharmacy funding.
“Accepting this deal does not mean we think it is enough — for this year or the future. It does not mean we will simply accept whatever Government or the NHS proposes. And it does not mean the job is done.
“It means the opposite. We have been clear with Government that the sector is in a critical position, and that we now need urgent work on a sustainable long-term solution, including reform of the contract, funding and reimbursement model. As part of this deal, Government have committed to work with us on this programme of work.
“That work will be difficult and will take time, but refusing this deal would have put more pharmacies — and the services they provide to patients and communities — at greater risk. The Committee was not prepared to take that risk.”
Fin McCaul, Negotiating Team Member, Chair of the Service Development Subcommittee, and a Regional representative, said:
“Offer decisions are always very challenging, and this time was no different. Every Committee Member knows what the ongoing economic funding gap means for their businesses and personal circumstances, as well as for colleagues and friends across the sector. Rejecting this offer would not have helped any of us: it would have shown our discontent, and possibly made us feel good for a moment, but it would not have eased the rising costs and demands we are facing. Worse, it could have reduced the funding available from next April, as Ministers might have de-prioritised the sector amid so many competing pressures on health budgets.”
Peter Cattee, Negotiating Team Member, Chair of the Funding and Contract Subcommittee, and a non-CCA multiple representative, said:
“My focus is now firmly on delivering the shared reform agenda. It is the most important part of this settlement, and work must begin without delay. Pharmacy owners are crying out for realistic long-term solutions to the sector’s underlying problems: the issue is not managing decline, but confronting it. We will push DHSC to review the current funding model, tackle loss-making dispensing and ensure core NHS services are economically sustainable.
“There must also be meaningful engagement on network capacity and future planning to secure long-term structural stability. A significant part of the network has become trapped in a seemingly inescapable cycle of losses and that cannot continue as it will inevitably lead to degradation of standards and service. Now is the moment for Government to grasp that investment in training, premises and technology, not pharmacy contracts, is the true measure of stability in the sector and that this is a prerequisite for its own vision to succeed.”
Stephen Thomas, Negotiating Team Member and a CCA representative, said:
“This settlement brings some recognition from Government of the sector’s needs. But with pharmacy businesses still facing rising costs and increasing demand, it is critical that the contractual easements and joint reform programme move quickly. I am also conscious that the Government has delayed on similar promises before, which is why we will keep up the pressure to ensure they are delivered. We are committed to working constructively with Government and NHS England to shape a future model that is both clinically ambitious and financially sustainable, but they should remember that trust does run out.”
Mike Hewitson, Committee Member and an NPA representative, said:
“As many in the sector will know, launching Independent Prescribing was at the top of my list for the future of community pharmacy. It is strategically important and helps pave the way for the wider clinical future we all want. But in negotiating with Government, we faced impossible choices. Ministers secured the funding they could, but it is clear the allocation for IP will not be enough for many pharmacy owners to take on the additional clinical responsibility. By accepting this deal, we hope to signal our continued commitment to IP, and we will now lobby hard for further investment so it can become a genuine success from the next financial year onwards.”
Read more about the addition of prescribing to the CPCF
Guidance and Support
Community Pharmacy England, DHSC and NHS England have written jointly to pharmacy owners setting out information on the CPCF for 2026/27.
Community Pharmacy England has also produced a summary of the changes:
Briefing 009/26: Funding Settlement for 2026/27
- This tool allows pharmacy owners to input their own activity levels and circumstances to generate a bespoke estimate of expected monthly income for 2026/27.
- This is based on ‘average’ volumes of delivery in 2025/26 and 2026/27.
- This is based on the national margin allowances within year – margin write offs are not included.
We have today updated our MP resources to include a new MP briefing note on the settlement – and what comes next.
Further information, explainers and guidance to help you will be shared as soon as possible, and we recommend signing up to our newsletters to keep up to date with developments.
We will be holding a series of online and in-person events where pharmacy owners can learn more about the implications of the new funding settlement for their businesses and share their views on future reform with Community Pharmacy England. We recommend signing up for both our webinar and a regional event:
Register for the webinar at 7.30pm on Monday 1st June
The webinar will provide more detail on the funding settlement and an opportunity to ask initial questions of the team about any aspects of it, and what it will mean for your pharmacy.
Sign up for a Regional Roadshow near you (through June and July)
The roadshows will give an overview of the funding settlement and will explore some of the issues likely to come up through the joint reforms work – allowing you to share your views on the future of the sector. There will also be lots of opportunity to ask questions of the team about the settlement, or any other topics, both in the meeting and over the informal dinner beforehand.
