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Swift delivery of financial support critical, pub bodies urge Government

09-Apr-2020 - Last updated on 09-Apr-2020 at 13:45 GMT

Critical issue: four organisations have urged the Government to make changes to its financial support for pubs

Related tags Coronavirus

Organisations representing pubs have written to the Chancellor asking for immediate changes to the financial support offered to businesses, including making grants available to pubs with high rateable values and pushing councils to deliver such grants quickly.

The British Beer & Pub Association (BBPA), British Institute of Innkeeping (BII), Campaign for Real Ale (CAMRA) and UKHospitality (UKH) have written to the Chancellor of the Exchequer Rishi Sunak, urging action.

Payments of the Government’s hospitality business grants are not being delivered quickly enough by local councils, with many pubs facing immediate cash flow issues, the bodies said.

The letter said: “Local authorities have a direct link to business through the business rates system so they are a logical delivery partner and should be able to provide efficient payment to all businesses.”

Onerous processes

It continued: “While we have seen some local authorities provide grants very quickly, the vast majority have onerous processes in place and others are simply showing a lack of understanding of the urgency of these payments to businesses.”

Readers of The Morning Advertiser have been sharing their experiences of applying for these grants on social media, with some reporting payment in days and others left in the lurch with sparse communication from their councils.

The four organisations called on the Government to clarify to local authorities the need for urgent payment.

They said conversations about state aid should be conducted after payments are made and retrospective adjustments made accordingly.

They also called on the Treasury to abolish the £51,000 maximum rateable value threshold on the grants. Operators told The Morning Advertiser this week exclusion from the grants had left them frustrated and worried about the prospect of taking on loans, with almost 10,000 pubs affected.

Survival threat

BBPA chief executive Emma McClarkin said: “Ten thousand pubs are still without any grant support because they are above the rateable value threshold. Unless that is abolished immediately, many of those pubs will cease to exist in a matter of weeks putting some 150,000 jobs at risk.

“Not only are these pubs viable businesses, they are the social hub that bind us together. The Government has got to get its support right and delivered so when this crisis is over pubs can reopen and serve their communities once more.”

Here is the letter in full:

Dear Chancellor,

We are writing as a coalition of organisations representing and supporting the UK’s pub and wider hospitality sector. Firstly, we wish to convey our thanks for the ongoing support that the Government has provided to the sector in this fast-evolving situation. The package of measures announced to date has provided businesses with the prospect of survival and recovery, yet it is critical that support arrives at the earliest possibly opportunity and that it covers all businesses large and small.

Our initial concern is about the process by which grants are being directed to businesses. Local authorities have a direct link to business through the business rates system so they are a logical delivery partner and should be able to provide efficient payment to all businesses. While we have seen some local authorities provide grants very quickly, the vast majority have onerous processes in place and others are simply showing a lack of understanding of the urgency of these payments to businesses. We urge Government to clarify to local authorities the need for urgent payment. Conversations around state aid can be conducted after payments are made and retrospective adjustments made accordingly.

The other issue that needs redress is the threshold for business support, at below £51,000. We believe this should be removed altogether for the hospitality sector, including pubs. These businesses have been among the hardest hit by the coronavirus outbreak, are major local and national employers and are facing critical cash flow issues that threatens their existence in the coming weeks. Abolishing the threshold and linking the grant payment to their rateable value (eg, 50% of the rateable value in grant payment up to a fixed level) would be invaluable in the ongoing battle for these businesses to survive and ensure all pubs and hospitality businesses that were viable before this crisis have a chance of remaining viable afterwards.

While the temporary increase in the state aid threshold of €800,000 (about £702,000) allows some multiple operators to access additional support, we believe these grants need to be removed from state aid provisions altogether. This would reflect the ongoing cost burden these businesses face and their battle to sustain hundreds of thousands of jobs and be consistent with the wider business rates relief package. For pubs alone, there are around 1,500 with a rateable value of below £51,000 that currently will not benefit from this support.

We would welcome further discussions with you on this issue which is essential in ensuring the survival of thousands of businesses and huge swathes of jobs right across the country, as well as the help many seek to support and provide within their local communities.