Hospitality firms beg government to speed up aid schemes

Thursday 26th March 2020 16:45 GMT

Sky News has obtained a letter from UK Hospitality (UKH), the trade association, to the chancellor, Rishi Sunak, which says companies are "having to make decisions in the dark" and warns that many will not survive long enough to access state funding.

In it, Kate Nicholls, UKH's chief executive, said a lack of detail about how the Coronavirus Job Retention Scheme (CJRS) would work was hampering decision-making in boardrooms about whether staff could be retained by "furloughing" them during the COVID-19 pandemic.

She also complained that banks appeared "to be profiteering at the expense of distressed businesses".

She said that urgent questions needed addressing about the extent to which businesses were liable for payroll costs, and whether the £2500-a-month grant being offered by the government would cover wages or also include such costs.

Ms Nicholls highlighted uncertainty about determining the correct wage rate for her members.

"From a hospitality perspective we feel that additional earnings, through tips and service charge should be included as these can be verified through HMRC returns," she wrote.

The trade body also raised the possibility of furloughed hospitality workers to work elsewhere during the coronavirus crisis.

"In addition to unpaid work, we believe there are grounds for employees to supplement key workers in other sectors on a short-term basis, whether in social care, food and pharmaceutical retail or food production.

"Individuals should not be penalised for this and a mechanism should be introduced to reward them for such activity.

"There should also be the ability for staff to carry out ancillary tasks for their current employer where they amount to a very small proportion of the standard role, such as ensuring the integrity of the property," Ms Nicholls wrote.

Mr Sunak was also asked in the letter to help accelerate the delivery of funding to struggling hospitality companies through the Coronavirus Business Interruption Loan Scheme (CBILS).

"Experience of accessing funds from banks under CBILS has been almost universally negative," Ms Nicholls wrote.

"The most common problem is banks telling business they are ineligible for the CBILS and instead they should take on an interest-accruing loan from the bank.

"Reasons for this include businesses having balance sheets that are too strong.

"The implication is that the bank wishes the businesses to run down their available assets or take a commercial loan, rather than access government-backed loans.

"At a minimum this seems to run against the spirit of the announcements Government made last week, and at worst appears to be profiteering at the expense of distressed businesses."

:: Listen to the Daily podcast on Apple Podcasts, Google Podcasts, Spotify, Spreaker.

Controversy over the demands by participating banks for personal guarantees from their business customers has led Mr Sunak to intervene to find a solution, according to banking sources.

Now On Air
Coast FM Gold with Nick Dent
Nick Dent, eases you into the weekend at 8am on Saturday with Coast FM Gold, four hours of music and memories - radio like it used to be