Operators say chancellor's £6,000 grant scheme ‘will not touch the sides' after Omicron decimates Christmas trade

21 December 2021 by
Operators say chancellor's £6,000 grant scheme ‘will not touch the sides' after Omicron decimates Christmas trade

The Treasury's £1b support package for hospitality businesses has been branded "way off the mark" by beleaguered operators, after Omicron restrictions decimated Christmas trading.

It was today announced that businesses in the hospitality and leisure sector will be able to apply for one-off grants of £6,000, with an additional £100m of discretionary funding to be distributed by local authorities. It is thought that 200,000 business will be eligible for support.

The government will also cover the cost of statutory sick pay (SSP) for Covid-related absences for small and medium-sized employers.

However operators have been quick to say that a £6,000, one-off payment will not begin to offset their losses.

Stuart Procter, COO of the Stafford Collection comprising the five-red-AA-star Stafford London hotel in St James, Northcote hotel in Langho, Lancashire, and Norma restaurant in Fitzrovia, said: "I think it's way off the mark. It's not a support package. Up to £6,000 is one lunch service in the American Bar or the Game Bird or one dinner service at Norma. It's nowhere near what we need.

"We need to see VAT sorted out, we need to see business rates sorted, we need to see a real support scheme including furlough or flexi-furlough.

"The first quarter of the year is always the toughest and I think we will now see a lot of restaurant businesses going into receivership."

Des Gunewardena, CEO of D&D, said: "The chancellor's announcement of £6,000 per site for businesses like ours is wholly and shockingly inadequate. Many of our larger restaurants in Central London -Quaglino's, 100 Wardour Street, Coq d'Argent etc - each lost £100,000+ in revenue from cancellations last week. And the same again this week. And heaven knows what's going to happen to our New Year's Eve. So, each of those businesses is facing a £200,000 loss and has been offered £6,000. Doesn't even cover the cost of our Xmas decorations."

Martin Williams, CEO of Gaucho and M Restaurants, added: "This support is too little, too late and will only act as a sticking plaster on major challenges for the sector. The return of SSP [payments] is welcome but must be extended to all businesses to avoid mass layoffs. What small and large business alike need right now is a 2022 strategy which sees the extension of 75% business rates relief and the introduction of a permanent 12.5% VAT rate. These two levers have been effective in supporting the hospitality sector throughout 2021 and will be paramount in the continued survival of hospitality!"

Steve Perez, chairman of Casa hotel, Peak Edge hotel and the Red Lion in Chesterfield, added the measures "will not touch the sides", while Tony Rodd, chef patron of Copper & Ink in London's Blackheath said: "Cheers Rishi Sunak that doesn't help!"

Meanwhile Gary Usher, founder of the Elite Bistos group, said today's announcement was at least a step in the right direction. He tweeted: "The chancellor's bail out package isn't adequate for a lot of businesses (most hospitality businesses in-fact) but I think it's a start. And it's a lot more than was available yesterday, which was nothing."

Kate Nicholls, UKHospitality CEO, also welcomed the news. She said: "This is a generous package building on existing hospitality support measures to provide an immediate emergency cash injection for those businesses who, through no fault of their own, have seen their most valuable trading period annihilated.

"It will help to secure jobs and business viability in the short term, particularly among small businesses in the sector, and we particularly welcome the boost to funds for the supply chain and event and business catering companies so badly affected by the reintroduction of work from home guidelines."

Emma McClarkin, CEO of the British Beer & Pub Association, added: "This short-term package of support from ⁦Rishi Sunak⁩ is welcome at this extremely challenging time for pubs and brewers. It will be a vital lifeline for many given the dramatically reduced Christmas trade we have experienced."

Announcing the support package chancellor Rishi Sunak had said: "We recognise that the spread of the Omicron variant means businesses in the hospitality and leisure sectors are facing huge uncertainty, at a crucial time.

"So we're stepping in with £1 billion of support, including a new grant scheme, the reintroduction of the statutory sick pay rebate scheme and further funding released through the Culture Recovery Fund.

"Ultimately the best thing we can do to support businesses is to get the virus under control, so I urge everyone to get boosted now."

The further funding released through the Culture Recovery Fund will amount to £30m to support organisations such as theatres, orchestras and museums.

The treasury has claimed that support to the level seen in 2020 is not needed as "many businesses have more cash in the bank than they did at the start of the pandemic", thanks to earlier measures.

It says that net cash deposits for all hospitality businesses have risen by 40% to £7b while small and medium-sized businesses in the hospitality sector have seen their cash deposits rise by 79% to £2b.

It adds that insolvencies in the sector are running 25% lower than pre-pandemic levels.

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