2016/17 & 2017/18 Funding Imposition

2016/17 & 2017/18 Funding Imposition

On 20th October 2016 the Government imposed a two-year funding package on community pharmacy, with a £113 million reduction in funding in 2016/17.

This took total funding to £2.687 billion for 2016/17. This was a reduction of 4% compared with 2015/16, but meant that contractors saw their funding for December 2016 to March 2017 fall by an average of 12% compared with November 2016 levels.

This was be followed by a reduction in 2017/18 to £2.592 billion for the financial year, which saw funding levels from April 2017 drop by around 7.5% compared with November 2016 levels.

Changes to Fees and Allowances

A Single Activity Fee (SAF) was introduced which incorporated and replaced the Professional Fee, Practice Payments, Repeat Dispensing Fee and EPS Monthly Allowances. For December 2016 to March 2017 the SAF was set to £1.13 per item.

The SAF then rose in April 2017 to a level of £1.25 per item.

The SAF rose again in November 2017 to a level of £1.29 per item.

Establishment Payments were reduced from Dec 2016 by 20% compared to 2015/16 levels. The following table outlines the payment level from Dec 2016 to Mar 2017:

Items per month Payment per month
2,500 – 2,829 £1,552
2,830 – 3,149 £1,613
3,150 + £1,673

From April 2017 Establishment Payments were further reduced, by 40% compared to 2015/16 levels. The following table outlines the payment level from April 2017:

Items per month Payment per month
2,500 – 2,829 £1,164
2,830 – 3,149 £1,210
3,150 + £1,255

For further information about the SAF see our Dispensing and supply factsheet understanding the single activity fee (updated)

Quality Payments

Beginning in 2017/18, £75 million of the CPCF funding was allocated to Quality Payments. At two specific review points during the year, pharmacies needed to declare which of the various criteria they were compliant with, in order to accumulate quality points. A total of 100 points were available during 2017/18, and payment was made to eligible contractors depending on how many points they achieved. The value per point was initially expected to be set at £64.

However, it was likely that some pharmacies may not meet the criteria for Quality Payments, which would result in a portion of the allocated £75 million not being delivered. Therefore after the two review points, there was a reconciliation process during which remaining funding from the originally allocated £75 million was divided between qualifying pharmacies based on the number of points they have achieved.

Following reconciliation the final value per point was calculated to be £71.71.

For further information about Quality Payments please see our dedicated Quality Payments page:

Quality Payments

Pharmacy Access Scheme

As part of the package, DH confirmed the introduction of a Pharmacy Access Scheme (PhAS), with the stated aim of ensuring that a baseline level of patient access to NHS community pharmacy services is protected.

Qualifying pharmacies received an additional payment, intended to protect those pharmacies from the full effect of the reduction in funding from December 2016.

For further information about PhAS please see our dedicated PhAS page:

Pharmacy Access Scheme

Impact on contractor income

PSNC produced the indicative income tables and calculator below to allow contractors to assess the impact of the changes on their business.

Indicative income tables

Indicative income calculator (including cashflow calculator)

More Information

PSNC Briefings and slide deck on the changes

PSNC Briefing 057/16: Funding imposition for 2016/17 – Information for Contractors

PSNC Briefing 058/16: Funding imposition for 2016/17 – Frequently Asked Questions

PSNC slide deck on the changes for LPC use (PowerPoint)

PSNC slide deck on the changes (PDF)

On-demand webinar: Funding changes 2016/17 and 2017/18

The Department of Health (DH) documents

DH has published the following documents related to the changes:

Community pharmacy in 2016/17 and beyond: Final package

Impact assessment

Community pharmacy in 2016/17 and beyond: The pharmacy access scheme

DH list of pharmacies eligible for PhAS

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