UKHospitality calls on Government for enhanced business support
21 April 2020
Posted by: Chris Banks
Support for businesses hit by Covid-19 must be extended, enhanced and delivered swiftly if businesses are to recover from the Covid-19 crisis and jobs saved.
Speaking on behalf of the UK’s hospitality sector, Kate Nicholls, Chief Executive of UKHospitality, gave evidence to the House of Commons Treasury Committee today outlining the problems being faced by hospitality businesses hit hard by the Covid-19 crisis.
Giving evidence, Nicholls highlighted a number of areas where Government support was not having the intended effect of supporting businesses, with many businesses struggling to access support and others excluded from schemes. Nicholls also highlighted the need for business support to continue past end of the lockdown if the hospitality sector is to fully recover.
Furlough and Job Retention Scheme
· Despite an extension to the Coronavirus Job Retention Scheme, an estimated 350,000-500,000 hospitality workers are missing out as they are seasonal workers or hit by technicalities, including new starters and those unable to produce a payslip
· Hospitality businesses have been frustrated by the loan scheme.
· A UKH survey of its members showed that 50% of businesses had applied for a loan but only 18% of those that had applied had secured one, with 58% of applicants still waiting for a response
· Some banks have indicated they will not lend to hospitality businesses
· EU state aid rules were getting in the way of investment
· 71% of hospitality business is carried out in a venue with a rateable value of above 51,000 and therefore ineligible for a grant
· This is not restricted to large pubs – community-based venues also do not qualify
· 71% of UKH members had claims rejected
· Bolt-on coverage allowing businesses to claim is too expensive for many businesses
· Serious damage to the sector expected when rents are next due without extended moratorium
· Businesses require lead time after reopening before beginning to replay rents with a repayment schedule needed
· A rent moratorium would allow businesses to focus on paying suppliers
· The sector has confidence it can return to near full strength if it supported on rents
Kate Nicholls commented: “Government support for businesses has been swift and it has helped many businesses get over the initial shock of the crisis. It is clear, however, that too many businesses are struggling to access support and that the schemes in place must be extended and enhanced.
“Hospitality was the first sector to be hit hard by the crisis and it will be one of the last to make a recovery. Even when lockdown measures are lifted, our sector faces a huge challenge in getting customers back through their doors and finding solutions to social distancing measures that are likely to be in place.
“Business support needs to be boosted immediately to make sure that every business that needs it can access it. Scrapping thresholds for grants and support with rents will keep businesses alive and keep jobs open.
“This support then needs to be carried over after the worst of the crisis has passed. If it is abruptly switched off, then all the good work that has been done during these difficult weeks will be undone. Hospitality is going to be battling with the effects of this for months, if not years and support from the Government cannot be stopped until businesses are back up to full strength.”