Financial help falling short for ‘hardest hit and longest suffering’ sector

The results of a UKHospitality (UKH) survey of businesses in the sector shows significant flaws in the level of support provided to businesses during the coronavirus pandemic.

Businesses asked about their experiences accessing loans, insurance, grant payments and other workforce issues during the crisis have painted a dire picture of the realities of claiming the Government’s financial aid.

Billions of pounds in grants, salary payments, supported loans and insurance claims have all been promised by the Government, but a significant proportion of operators have been unsuccessful, the results of UKH’s survey suggest.

Almost half of those asked (48%) said they had applied for loans, but the 57% who received a response from banks were turned down, the survey said.

Quarter of rejections​

“Government-imposed state aid rules account for over a quarter (26%) of rejections, alongside banks telling businesses to exhaust their own capital first (28%),” UKH said.

Almost three quarters of businesses have claimed or plan on claiming for business interruption insurance, yet fewer than 1% that have applied to do so have been successful.

While around a quarter of eligible businesses had successfully claimed grants, which falls significantly short of the Government’s estimates.

“In terms of workforce, redundancies have been kept to a minimum (2%), with the majority of businesses furloughing staff, accounting for 84% of sector employees,” UKH said.

“This demonstrates the huge success of the Government’s job retention scheme and the need for it to be extended as the recovery begins.”

Chief executive of the organisation, Kate Nicholls, said the results of the survey “laid bare” the additional work needed to be done by the Government, banks and landlords to ensure businesses can survive the crisis.

Hospitality hardest hit​

She added: “Hospitality was the first hit, the hardest hit and will suffer for the longest, and Government support needs to reflect these facts. Hospitality businesses will be key to recovery as prolific employers, major tax contributors and hubs for social interaction.

“Governments across the UK have provided unprecedented support to assist hospitality through this crisis, and that is extremely welcome.

“Yet, we are in this for the long haul. Everyone is rightly looking to how the economy and the industry restarts in a way that avoids a return of this horrific pandemic.

“Before we get to recovery, we need to make sure the support measures already announced are getting through to businesses.

“Loans must be fast-tracked with minimal restrictions, grants must flow to all businesses that need them regardless of size, and the job retention scheme must be amended to reflect actual earnings.”