Business rates, energy, food, drink and, most dramatically, the cost of employment.
All of a sudden, that first job behind the bar has become a distant memory for many people. The publicans that were proud to offer it have now concluded it’s simply too expensive.
Bringing down the cost of employment and reigniting that pathway into work for young people has been one of UKHospitality’s main priorities.
The Government has to reduce our cost burden if we’re to stem the steady flow of pub closures and get to a place where we can grow – and employ - once again.
The key levers we need the Government to pull are clear: cutting the rate of VAT, lowering business rates, and fixing employer NICs to bring down the cost of employment.
Solutions suggested
We make the case for those three asks, day in, day out.
At the same time, we’re putting forward solutions that, while not at the same level as those big fiscal asks, are practical, targeted and can genuinely bring down the cost of hiring.
In yesterday’s announcement on youth employment and apprenticeships, we saw several of our asks directly adopted by the Government.
While not a silver bullet by any means to the cost challenges we collectively face, the changes can have an impact.
The Youth Jobs Grant takes our calls for targeted financial incentives for businesses hiring people who are currently out of work through a £3,000 payment per employee taken on. It’s effectively an employer NICs holiday and addresses one of the key cost increases we have seen.
Another is a £2,000 apprenticeship incentive for every apprentice taken on under 24 - again helping to reduce the costs of hiring.
Cost burden
We’ve also fought for hospitality to be included in new foundation apprenticeship standards. With inclusion initially reserved only for Industrial Strategy sectors, we successfully argued for our inclusion - demonstrating the strength of our sector’s voice in Government.
These foundation apprenticeships act as a natural successor to our hospitality Sector-based Work Academy Programmes (SWAPs) - providing businesses with a nine-month, financially supported pathway for apprentices.
Our SWAPs alone save the sector around £6m each year in recruitment and training costs.
This announcement also confirmed that we have successfully retained sector-specific management apprenticeships on offer too. Given the Government was actively consulting employers on which standards to streamline, this was significant.
I know that the cost burden facing our sector is so large that it requires significant fiscal levers like VAT or business rates to be pulled, but where there are opportunities to lower costs, we will take them.
Pubs remain the best place to enter or return to the workforce. We know that, and we’re making sure Government does too. These new employment support schemes are evidence of that.
If this is the start of Government backing up its words with genuine cost-saving measures, let’s embrace it, keep up the pressure and make sure the next step is VAT and business rates.
