£3.5 million shortfall on circuit-breaker support says SHG

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The Scottish Hospitality Group (SHG) has said that its operators will only receive £415,000 of government support over the three-week ‘circuit-breaker’ despite it costing business over £3.5 million to close.

 

The multi-million pound loss highlights “the lack of sector understanding and the critical need for government engagement in order to support a broken industry,” says SHG spokesperson, Stephen Montgomery. The claim comes ahead of the parliamentary debate later today, where the First Minister will give further detail on new five tier lockdown restrictions, which are due to start on 2 November.

A survey across the SHG’s membership, found the average cost to shut down bars and restaurants is £2,425 while additional fixed costs, stock loss and furlough charges total £5,783 per week. Typical grant support is only £693 per venue leaving a loss of £5,089 per week on top of the one off shut down costs. With some operators running as many as 20 premises, the total shortfall across the group – which has more than 200 venues –  is over £3.5 million for the three week period.

Stephen Montgomery comments, “Clamping down on one sector is disproportionate,  economically unsustainable and unviable for many hospitality businesses. We need a balanced approach from government and reassurance that restrictions are based on specialist knowledge, experience and credible data, which to date has been found seriously wanting.

“UK and Scottish governments need to find an equal and fair way of allowing us to trade viably but in a safe and regulated way in comparison to the current restrictions which to have had the opposite effect.

“Last week was the first real dialogue we have had with the Scottish Government following the announcement of the five-tier restrictions and we have since delivered a solution based response to the new framework, which is being debated in parliament today.

“We wait to hear if our recommendations will impact on the measures. If not, we can only assume that the continued crippling restrictions and huge shortfall in financial support is an indication that they are not listening and that industry discussions have no bearing on decisions related to supporting Scottish hospitality businesses. That is not a sustainable approach for the economy.”

The Scottish hospitality industry has 16,722 licensed premises nationwide. Based on a similar average, if all licensed premises were closed in Scotland the sector would be face a loss of £125million.

For those outside the top tier regions where licensed pubs and restaurants are allowed to remain open, the existing levels of restrictions such as the curfew, music and alcohol bans make trading unviable for a huge number of businesses and exclude them for full grant support.

Kenny Blair (pictured) of Buzzworks Holdings, said: “We have followed Scottish Government guidance repeatedly and we know that responsible operators offer a controlled safe environment and are a key part of the solution.

“Our premises are safely operating as part of a regulated industry that has been working with strict guidelines for some time. The majority of businesses have made significant investment to implementing enhanced hygiene measures and physical distancing to keep customers and staff safe.

“If hospitality is to make it through this pandemic and secure the hundreds of thousands of jobs that it supports, we cannot shoulder the burden for much longer. This is not just about the viability of businesses we represent, but also the long-and-medium term mental health risks to operators and staff if the current approach continues.”

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