Hospitality Business Emergency Predicted As Critical Funding Removed Later This Month

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While more than 50% of Scotland’s pubs and restaurants will remain shut this month the Scottish Government pulls critical business support fuelling a hospitality emergency

  • The Scottish Government’s Strategic Framework Business Fund will stop on 19 April removing a financial lifeline for 16,700 licensed premises, while only 20% of Scotland’s pubs will be able to open under the restrictions
  • Less than a quarter* of licensed premises in Scotland have outdoor areas making it impossible for bars to open
  • Hospitality operators in Scotland have had to take on an average of £80k debt per site just to survive ongoing lockdowns
  • Call for ‘hospitality tsar’ over claims that the government’s level of industry knowledge is ‘pitiful’

Scotland’s hospitality sector is gripped by debt claims leading trade body, the Scottish Hospitality Group (SHG). As thousands of pubs and restaurants fear “a day of reckoning,” the announcement that support will stop on 19 April from Scottish Finance Secretary, Kate Forbes, could propel a hospitality crisis to weeks rather than months.

 

A minority of Scotland’s hospitality sector will be able to open on 26 April with alcohol outdoors only, leaving the majority unable to trade and without adequate business support. While 17 May signals further in-door reopening, the Scottish Government has yet to indicate when all restrictions will be lifted.

 

“A day of reckoning is coming for debt strapped Scottish businesses and as politicians prioritise the electoral trail, they are needlessly cutting a financial lifeline,” warns Stephen Montgomery, spokesperson from the SHG. From 19 April hospitality businesses will no longer receive any support from the Scottish Government’s Strategic Framework Business Fund, following a one-off restart grant aimed at providing money up front to help with the costs of re-opening.
“The only certainty the SHG can take from this roadmap is that our strategic grant support will be ended on 19th April. It’s senseless and again highlights Ministers’ lack of knowledge of our sector – 12 months down the line this is pitiful. Grants should be maintained until a business can return to trading normally.
“We are relieved that some hotels and restaurants will be able to open this month, but Scottish ministers cannot just wash their hands of the thousands of operators left stranded and unable to trade viably. These constraints are simply not feasible for most bars and the late-night premises that will remain closed for weeks if not months, and we are calling for a workable solution.
“We urge the government to appoint a senior representative with a business background who is capable of grasping the unique challenges facing the sector such as the level of complexity and scale of our industry and the punitive restrictions forced on us.
 
“For a year we have encountered a gaping chasm of understanding among officials and ministers which has led to counter-productive policies that had no basis in fact, for example Scotland was the only country to impose a music ban. Now faced with a level system which is a not viable for many in level 3, the survival of Scotland’s pubs, hotels and restaurants needs an informed champion at the highest level of government.”

Scottish Hospitality Group member, Nic Wood from Signature Pub Group, is afraid that many smaller bar operators will not survive now that funding has ceased. “As one of Scotland’s independent operators we have 21 premises with only seven able to open on 26 April, leaving 300 of my staff reliant on furlough for longer.

 

Most of our venues are landlocked with no outdoor space. It’s just terrifying that the Scottish Government believes you can trade as a pub, viably and supporting jobs, while not being allowed to sell alcohol. But these limitations are endless for smaller city centre bars, late night premises, nightclubs, entertainment and live music venues, that now starved of financial support just won’t make it through the next couple of months.”

 

The SHG also wants the government to start a concerted campaign to restore public confidence in well-run and responsible venues, which it believes are crucial for providing safe spaces for socialising. Last month the government made its support for the rural tourism sector clear. Now it is being urged to do likewise for hospitality.

*Source:  CGA Market Recovery Monitor March 2021