The latest National Minimum Wage (NMW) increases will have a severe knock-on effect for community pharmacies, sector leaders have warned.

Earlier this week, the government announced that the National Living Wage (NLW) would rise to £11.44 per hour from next April, from the current rate of £10.42. In addition, the age threshold applied to the NLW will be lowered from 23 to 21.

The separate minimum wage for workers aged 18 to 20 will also increase, from £7.49 an hour to £8.60.

According to Janet Morrison, chief executive of Community Pharmacy England (CPE), the rate hikes will add to cost pressures already threatening the existence of small pharmacy businesses.

‘The majority of pharmacies employ staff on or around the NMW, which has increased nearly 40% since the start of the current contractual framework,’ she said. ‘

This is at a time when pharmacies have had a 30% real terms reduction in funding since 2015.’

She added: ‘No viable business can absorb these cost increases without significant support.’

Her view was echoed by Gareth Jones, director of corporate affairs at the National Pharmacy Association (NPA), who warned that small and medium-sized pharmacy businesses were already struggling to make ends meet and would find the wage rises difficult to absorb.

‘Many are going to have to make very difficult decisions about staffing levels and other ways to cut costs,’ he said.

‘For some pharmacy owners it might be the final step to being non-viable as a business.’

According to Dr Leyla Hannbeck, chief executive of the Association of Independent Multiple Pharmacies (AIMp), the rise in business costs could be a ‘final nail in many community pharmacy coffins’ if core funding for the sector is not addressed.

‘Whilst it is good that those on lower income get better pay in a move by the government to encourage more people to work, the reality for community pharmacy is that our sector simply cannot absorb the cost with a current funding envelope that has a shortfall of over £1.2bn,’ she said.

Concerns over core funding for pharmacies are shared by the NPA and CPE. Mr Jones said an increase was an ‘absolute necessity’, while Ms Morrison insisted that cost pressures must be addressed through a ‘sustainable, long-term funding arrangement’.

Ms Morrison also noted that chancellor Jeremy Hunt’s autumn statement on Wednesday omitted any mention of the £645m recovery plan funding for the sector, adding: ‘But we have been clear that this is not the panacea to reverse all of the pressures on pharmacy businesses.

‘The pharmacy sector requires ongoing support. Our sector should have been acknowledged and offered further support; just as other vital health services were.’