HOSPITALITY MEASURES ARE COLD COMFORT

Updated: Dec 23, 2021

As fears of an imminent ban on indoor hospitality in England mount, The Chancellor of the Exchequer announced support for the sector hit by a collapse in demand in its economically crucial, December party season.


Recognising that the rise of the Omicron variant means some businesses are likely to struggle over the coming weeks, the government is providing one-off grants from £2,700 to £6,000 per premises for businesses in the hospitality and leisure sectors in England.


Despite today's intervention, it is the prospect of a circuit breaker and with it the indoor closure of bars and restaurants across England between Christmas and the early New Year, that is terrifying business owners and staff, whose premises were closed last Christmas too.

On Wednesday, December 22 additional data modelling the consequences for public services and the NHS of the exponential spread of Omicron will be analyzed.


The announcement of a re-introduction of severe restrictions is being held in reserve, including a ban on indoor hospitality that would kick in next week.


With knowledge of that wider context Rishi Sunak announced :-

  • Businesses in the hospitality and leisure sectors in England will be eligible for one-off new business grants of up to £6,000 per premises,

  • Government will also cover the cost of Statutory Sick Pay for Covid-related absences for small and medium-sized employers across the UK

  • Over £100 million of discretionary funding for local authorities in England for other affected businesses


NEW BUSINESS GRANTS


Recipients must be solvent businesses, and ratepayers in the hospitality and leisure sector. For example, a pub, hotel, restaurant, bar, cinema, or amusement park.


Grants are per premises and the amount paid is varied by rateable value (RV) of each eligible premises, in three bands:


Rateable Value £0-15k £15-51k >£51k

Value of grant £2.7k £4k £6k


Final application and payment dates for the hospitality and leisure grants and the ARG will be confirmed in guidance published by BEIS and the grants be made available through your local authority, though application forms going live will inevitably be delayed by the Christmas break.

SUPPLY CHAIN AND NON - RATEABLE BUSINESSES


To support other businesses impacted by Omicron – such as those who supply the hospitality and leisure sectors – the government is also giving a more than £100 million boost to the Additional Restrictions Grant (ARG) fund for local authorities in England.

Local Authorities will have discretion to allocate this funding to businesses most in need.


The ARG top up will be prioritised for those local authorities that have distributed the most of their existing allocation. This is on top of the £250 million of previously allocated funding that remains with local authorities.


In reality with local councils having to devise their own policy for the ARG, and not open over the Christmas break it will be well into January before these monies work their way through to any New Year applicants.


Use of this funding is at the LA’s discretion, but is intended to support businesses who are impacted by COVID-19 but may not be eligible for the hospitality and leisure grant.



SSP REBATES FROM TODAY


As increasing numbers of Covid-19 cases means more workers taking time off work, the government is also reintroducing the Statutory Sick Pay Rebate Scheme (SSPRS).


The SSPRS will help small and medium-sized employers – those with fewer than 250 employees – by reimbursing them for the cost of Statutory Sick Pay for Covid-related absences, for up to 2 weeks per employee.


Firms will be eligible for the scheme from today and they will be able to make claims retrospectively from mid-January.


CULTURE RECOVERY FUND


To provide continued support to the cultural sector, £30 million further funding will be made available through the Culture Recovery Fund to support organisations such as theatres, orchestras and museums through the winter to March 2022.



These additional measures will reinforce the existing package of business support, including:

  • business rates relief meaning that the majority of businesses in the hospitality and leisure sectors will see a 75% reduction in their business rates bill across the entire financial year and a new 50% capped business rates relief next financial year;

  • a 12.5% reduced rate of VAT for hospitality and tourism to support the cash flow and viability of around 150,000 businesses and protect over 2.4 million jobs, until the end of March;

  • the £1.5 billion Covid Additional Relief Fund for businesses that have not previously had business rates support;

  • businesses will be protected from eviction if they are behind on rent on their premises, thanks to the moratorium in place until March 2022;

  • access to finance for SMEs through the Recovery Loan Scheme to June; and

  • Bounce Back Loan repayment flexibility, with borrowers having the option to take a 6 month repayment holiday, three 6 month interest only periods or extend their loan to 10 years, which almost halves the monthly payment.

  • support for the aviation and travel sectors, including over £12 billion since the beginning of the pandemic, and the Airport and Ground Operations Support Scheme (AGOSS) until the end of March 2022.

  • HMRC stand ready to support any business impacted by the coronavirus pandemic through its Time to Pay arrangement, and the Chancellor has asked them to offer businesses in the hospitality and leisure sectors in particular the option of a short delay, and payment in instalments, on a case by case basis, as part of this.



Further information:

The funding consists of:

  • £683 million for targeted grants for hospitality and leisure businesses in England

  • £102 million top-up for the Additional Restrictions Grant

  • £30 million for Culture Recovery Fund

  • £154 million of Barnett funding covering all three above

  • Funding for the Statutory Sick Pay Rebate scheme will be additional to these amounts

  • Further information will be available in the published factsheets.



As part of this support announced today, the devolved administrations will receive around £150 million of funding through the Barnett formula, comprising around £80 million for the Scottish Government, £50 million for the Welsh Government and £25 million for the Northern Ireland Executive.


This contributes towards the £860 million of further funding announced by the UK Government in the last week to support the devolved administrations, allowing them to provide additional support to businesses in Scotland, Wales and Northern Ireland as they see fit.


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