Inequity exists in the financial support offered by the government to GP practices and pharmacies – in particular, when it comes to business rates. Richard Hough and Oskar Musial explain…

In recent years, large, purpose-built medical centres have become increasingly popular and are now commonplace.

These medical centres are designed to accommodate a wide range of healthcare service providers, including GP surgeries, dental practices, midwifery, phlebotomy and physiotherapy services, as well as community pharmacies.

Despite a recent trend of pushback from pharmacies against inflation-busting rent rises imposed on them by their medical centre landlords, which is seeing them exploring all available options to break their existing leases, it is acknowledged that such shared healthcare accommodation is likely to stay.

In the meantime, the shift in the location from which primary healthcare services are provided has also been accompanied by a change in the way in which those service providers operate.

For GP surgeries, it has meant a move away from small independent surgeries operating from converted dwelling houses, from which they provided home visits and treatment and referral services for the full range of patients’ healthcare issues to the divestment of the treatment of certain minor conditions (which can and should be treated more cost-effectively by other providers in the healthcare ecosystem) and the undertaking of a broader range of clinical services within purpose-built medical centres which have historically been offered by secondary care in acute hospitals.

For community pharmacies, it has meant a shift away from service provision which was largely centred on dispensing services and OTC sales, although such services still remain core, towards an increasingly clinical role.

The scope of advanced and enhanced NHS services that are now routinely undertaken by community pharmacies has increased significantly in recent years and now includes appliance use review, flu vaccination service, hypertension case-finding service, lateral flow device service, New Medicine Service, pharmacy contraception service, smoking cessation, stoma appliance customisation and Covid vaccination.

Most recently, the Department of Heath and Social Care launched Pharmacy First, a scheme designed to enable community pharmacies to supply prescription only medicines to patients without the need to visit a GP to treat seven common health conditions.

In attempting to ease the burden of healthcare provision in secondary care, the government has seemingly adopted a national healthcare strategy of “kicking the can down the road” rather than adopting a strategy of adequate and efficient investment, resulting in primary healthcare providers, including GPs and community pharmacies, having themselves now become over-burdened and patients’ access to healthcare services suffering.

However, despite this increased focus on the provision of clinical services at community pharmacies and the blurring of traditional lines of accountability between GPs and pharmacists for the delivery of certain healthcare services, a degree of inequity exists in the financial support which is offered by the central government to GP practices and pharmacies – in particular, in the area of business rates.

While GP surgeries and health centres do not benefit from direct relief for business rates, GPs are however able, pursuant to NHS (General Medical Services - Premises Costs) Directions 2013, to make an application to NHS England (Property Services) for “financial assistance” towards a reimbursement of all rent, business rates, water and clinical waste collection charges that they have paid (provided that an application for reimbursement is made within three months of the last instalment being paid).

Additionally, GPs who benefit from “small business rate relief” (broadly, where their property’s rateable value is less than £15,000 or where only one property is used as part of the practice) are able to apply for a reimbursement.

Currently, there is no equivalent legislative provision that allows pharmacy businesses which are included on the NHS pharmaceutical list the opportunity to make an application for financial assistance towards a reimbursement of their equivalent property related charges. So why does this disparity exist?

Under current legislation, which came into force in April 2013, GPs are allowed, seemingly solely by virtue of operating a GMS contract, to apply to central government for financial assistance with their business rates on the basis that they provide an essential NHS-funded healthcare service to patients and are not a commercial entity.

And yet pharmacies, which also provide essential NHS-funded healthcare service to patients and whose predominant source of revenue is from public, not private, funds, and whose services in 2024 increasingly resemble those which were provided by GPs ten years ago, are not.

Given the increasing conflation of the identities of healthcare professionals who provide primary healthcare services to patients, it is becoming increasingly difficult to justify the inequity in the business rates regimes between GPs and community pharmacies. And so, also given the sustained and well documented economic pressures under which community pharmacies continue to operate, is now the time for DHSC to consider a change in legislation that will redress this unfair and financially prejudicial imbalance?

Until such time as DHSC heeds the call for well overdue reform to address this inequitable business rate treatment as between primary care providers, financially pressed pharmacies will need to continue to explore the very limited range of options for managing their business rates liabilities within the existing legislative framework and restrictive set of reliefs.

Richard Hough is a partner and former pharmacist and Oskar Musial is a solicitor at Brabners.