Thousands of job losses ‘imminent’ as companies ‘days away’ from collapse
HOSPITALITY and tourism trade groups have expressed “bitter disappointment” after Scottish economy secretary Fiona Hyslop said the Scottish Government’s grant scheme will not be extended to businesses with a rateable value over £51,000.
Groups including The Scottish Tourism Alliance (STA), UK Hospitality and the Scottish Licensed Trade Association (SLTA) have been lobbying the Scottish Government for greater financial support for businesses since the beginning of the COVID-19 shutdown.
Scottish hospitality businesses with a rateable value of up to £18,000 are eligible for a one-off grant of £10,000 through the Scottish Government’s Business Support Fund, with businesses that have a rateable value between £18,001 and £51,000 eligible for a grant of £25,000. Any subsequent properties owned by a company, and which fall into either of those rateable value brackets, are eligible for 75% of either the £10,000 or £25,000 grant.
However, businesses with a rateable value above £51,000 are not eligible for either grant. The Scottish Government established two further funds -the Creative, Tourism & Hospitality Enterprises Hardship Fund and the Pivotal Enterprise Resilience Fund – but these are administered by enterprise agencies and distributed on a case-by-case basis.
When asked by Conservative MSP Murdo Fraser at a meeting of the parliament yesterday (May 26) whether further grant support would be available to businesses above the £51,000 threshold Hyslop said: “I agree with the member that that would be desirable if we could do it, but we are not currently in a position to do it.”
STA chief executive, Marc Crothall, said the support provided to the industry so far, though welcome, “is not enough”.
“Despite the recent increases to the Hardship and Pivotal funds announced by Scottish Government the total sum of support available still falls well short of what is needed to protect business from collapse,” said Crothall.
“We are hearing of many tourism business above the RV51 threshold who have had their applications to these funds declined. As such it remains the case that at this juncture there are hundreds of tourism businesses, pubs, hotels, visitor attractions, and event venues who are all incurring significant monthly costs with no income coming in still not having received any grant support and many about to go the wall.
“These medium to large businesses are the lifeblood of Scotland’s tourism industry, major employers and the recovery of our industry and wider economy is dependent on them.
“Their monthly hibernation costs range from £10k per month to £350k-plus and with no income or support, they are now collapsing.
“The loss of thousands of jobs is imminent as these businesses simply have no revenue; we are now days away from this.
“If as we are being told by Scottish Government ministers there is no more money to support these business then we urge them, as the industry are doing, to press their UK counterparts in the Treasury harder still.”
The SLTA called Hyslop’s statement “absolutely appalling and a betrayal to a sector that it has still been left adrift with no grant support from government whilst others, disproportionate to their needs, have received support”.
“The Scottish Government must immediately come out and support those hospitality and tourism businesses that are over the £51,000 RV threshold, and show them that you have their interests at heart, because at the moment, they have been shown no worth at all, left helpless, left isolated whilst they now stare into the abyss,” said the association.
And UK Hospitality’s executive director for Scotland, Willie Macleod, said Hyslop’s comments were “disappointing”.
“There is still no grant support for those businesses occupying premises with a rateable value above £51k,” he said.
“These businesses have been hit just as hard as any other. They are not being shielded from the effects of COVID-19 simply because their premises are more highly rated.
“These businesses have had no revenue since lockdown began on March 23, are incurring significant costs while closed, an average of £60,000 per month, and are at severe risk of going out of business altogether with the potential loss of thousands of jobs.
“We hope that these businesses will be able to help spearhead the economic recovery of Scotland once the crisis has passed. They will not be able to if they have gone out of business before they have a chance to reopen. Grant support must be extended to these businesses, otherwise we are going to see even more failures and more people unemployed.”
At the meeting of the Scottish Parliament Hyslop said that the Scottish Government had made the case to Westminster that money not utilised for the UK Government’s Business Interruption Loan Scheme could be earmarked for further grants but “that has not been taken up as yet”.
“On the one hand, people want us to be the same as the UK, but on the other, they want us to do something different,” said Hyslop.
“We are trying to chart a course that is both fair and equitable. The issues around businesses with rateable values over £51,000 in the tourism sector are one reason why we set up the hardship fund and the pivotal resilience fund, and companies can apply to those two funds.
“As we speak, those funds are starting to deliver. However, that will not stop us impressing on the UK Government the need to provide more funding for businesses with rateable values over £51,000.
“Can we do it on a sector-by-sector basis? That is always problematic, but there may be a case for it, particularly in relation to tourism and hospitality.
“I will try to maximise my opportunities for resources in making those decisions, but ultimately it will be (finance secretary) Kate Forbes and (tourism secretary) Fergus Ewing who will take that forward.”