Quarter of all furloughed employees were in hospitality

By Nikkie Thatcher

- Last updated on GMT

Official figures: HMRC data showed in April 2020, 1.65m workers in the sector were on furlough (image: Getty/stuartmiles99)
Official figures: HMRC data showed in April 2020, 1.65m workers in the sector were on furlough (image: Getty/stuartmiles99)

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Some 25% of all workers on the Coronavirus Job Retention Scheme amid the coronavirus pandemic were from the hospitality sector, a study has revealed.

The report from the Office of National Statistics (ONS) called Coronavirus and its impact on UK Hospitality: January 2020 to June 2021 ​revealed data from HMRC showed in April 2020, just under 1.65m employees were on furlough, falling to just under 590,000 at the end of May 2021.

This represented a quarter (25%) of all furlough employees across all sectors.

Looking to the future of hospitality jobs, the number of employees in the sector saw in rise in June 2021, indicating the number of workers may continue to increase as a result of the number of job vacancies in the sector.

From April to June 2021, there were an estimated 102,000 vacancies in hospitality – almost five and a half times higher than the 19,000 recorded in December to February 2021 and higher than pre-pandemic levels.

Furthermore, transaction data from Vocalink for UK corporates showed the recent rise in consumer spending and turnover in April and May 2021 has not yet fed through to suppliers.

The total value of payments from food and drink firms to suppliers and contractors in May this year was just half (51%) of its pre-pandemic level in February 2021.

More investment needed

The report went on to highlight how turnover for pubs and nightclubs in May 2021 was more than a third (39%) lower than the same month in two years ago and has consistently stayed below 2019 levels since the pandemic started.

Meanwhile, consumer confidence in the sector is still low however, it has improved with the relaxation of restrictions.

The British Beer & Pub Association chief executive Emma McClarkin said the study was yet further evidence of just how devastating the pandemic has been for hospitality.

She added: “The recovery of our sector has only just begun now restrictions have been lifted, but these ONS figures show far our sector has to go to return to viability.

“The numbers are clear – more investment is needed now for our sector so it can play a leading role in building society and the economy back better. The Government must do this by reforming VAT, beer duty and business rates by which pubs and other hospitality businesses are greatly overtaxed.

“We urge those who want to see hospitality and pubs recover to support the Long Live The Local campaign and sign the petition at https://www.longlivethelocal.pub./​. Investment in our sector can help the country build back better with stronger communities, more jobs and a boost to villages, towns and cities across the country.”

UKHospitality boss Kate Nicholls echoed McClarkin’s comments and warned that while restrictions have now eased, the sector is still fragile.

Devastating consequences

She said: “These figures from the ONS highlight how the pandemic has uniquely hit the hospitality sector and its devastating consequences for businesses across all parts of the market.

“While ‘freedom day’ sees 12,000 venues finally open their doors and the sector operate viably for the first time in 16 months, hospitality is far from out of the woods.

“For the sector to enjoy a sustainable recovery, the Government will need to continue working closely with us in order to put in place, the right trading environment including measures such as the extension of the busines rates holiday until at least October, allowing firms to bounce back strongly and rebuild fragile consumer confidence.

“With the right support, hospitality can be at the forefront of the nation’s economic recovery, creating jobs and reviving our high streets and city centres.”

The publication of the impact on the hospitality sector shows the continued toll on struggling pubs and brewers, devastated by the Covid-19 pandemic, according to Society of Independent Brewers (SIBA) chief executive James Calder.

“With payments to businesses such as breweries only around half of its pre-pandemic levels and consumer spending at less than 70%, the sector needs further flexibility on VAT, beer duty and other tax debts to make it through the recovery,” he said.

“Even as restrictions are being lifted, this analysis demonstrates it will take a very long time for consumer confidence to return and for businesses to again, turn a profit.

“SIBA believes this is the time for the Government to announce sector boosting policies such as a lower rate of beer duty on draught beer and positive reform of Small Breweries’ Relief to save our local pubs and small breweries.”

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