As the original period for the Eat Out to Help Out scheme draws to a close at the end of this month, Ayrshire Joint Economic Committee has made a plea to both the UK and the Scottish Government to consider extending the scheme until the end of November 2020 in a bid to support the local hospitality sector.
The hospitality sector is one of the worst affected by COVID-19, with premises having to close down completely in the first few months of lockdown. Across the UK, it is estimated that 80% of hospitality businesses ceased trading in April and 1.4 million workers were furloughed, the highest proportion of any sector.
The Ayrshire hospitality sector is of huge importance to the local economy, employing almost 32,000 people locally in food distribution, hotels and restaurants. The future growth of the food and drink sector features prominently in the Ayrshire Growth Deal proposals, as having the potential to benefit the wider business base and create significant employment opportunities. The Eat Out to Help Out scheme provides Ayrshire residents with a chance to support their local tea-room, café, coffee shop or restaurant helping towns and villages to recover. The scheme also indirectly supports recovery across the Ayrshire food supply chain from farmers and growers to manufacturers.
In letters to the Rt Hon Rishi Sunak MP, Chancellor of the Exchequer and Fergus Ewing MSP, Cabinet Secretary for Rural Economy and Tourism, Councillor Douglas Reid, Leader of East Ayrshire Council and Chair of the Ayrshire Joint Committee, urges politicians to consider the request to help boost prospects for businesses which have suffered during COVID-19.
Councillor Reid explains: “Since 15 July, restrictions have gradually loosened and many hospitality venues have cautiously reopened, with restrictions in place to ensure social distancing, enhanced cleaning regimes and measures to ensure effective tracking of customers. These measures, while effective, impacted on profitability, particularly for smaller and independent businesses.
“The current Eat Out to Help Out scheme is scheduled to finish on Monday 31 August. This has benefitted many hotels, restaurants and bars in this area, attracting customers into their premises at traditionally quiet times to take advantage of the discount on offer.
“Whilst the scheme has been welcomed, many businesses have expressed their fears as to their prospects beyond 31 August, with some once more having to consider the longer-term viability of their establishments.
“Within Ayrshire, our efforts to tackle the economic impacts resulting from COVID-19 are coordinated via the Regional Economic Partnership, which brings together a range of partners and stakeholders. The Partnership works closely with our business base, and has canvassed the views of many businesses operating in the local hospitality sector.
“Therefore, as part of Ayrshire’s economic recovery, it is crucial to our future economic prospects that support for the hospitality sector continues beyond the end of August. Traditionally, the period before Christmas is one of the quietest of the year for the industry, and we believe a three month extension to the scheme, until the end of November, would have a lasting positive impact on the hospitality sector in Ayrshire and across the UK.
“Our hospitality and tourism businesses have also benefitted from the reduction in VAT from July 2020 to January 2021. This has proved to be of great value to many of our businesses, as they press ahead with recovery plans and we have asked the UK Government to consider extending this scheme for at least another six months.
“We have made a separate request to the Scottish Government regarding business rates relief. The announcement made by Kate Forbes, Cabinet Secretary for Finance earlier in lockdown, regarding business rates relief for 2020/21 has been welcomed, but with the likelihood of economic recovery taking years rather than months, we have asked the Scottish Government to consider extending this measure.
“The package of measures that has been put in place to date is allowing our hospitality businesses to take their first, tentative steps to recovery. We believe that the consolidation and extension of this support will allow the sector to continue on what will be a long and at times, difficult journey.”