Hospitality jobs ‘at risk’ from axed bonus

AXING the job retention bonus will blow a £2.1bn hole in the hospitality sector’s finances which risks resulting in mass job cuts, industry chiefs have warned.

Businesses which had put staff on furlough were told in July they would receive £1,000 for every worker they kept on their payroll until the end of January as part of the Chancellor’s job retention bonus. But Rishi Sunak reversed the plans last month when he extended the furlough scheme, quietly scrapping the bonus.

Industry trade body Ukhospitality is now urging the Chancellor to announce a successor scheme as soon as possible, warning its removal has been “incredibly damaging” for the sector’s cashflow.

“This commitment from government had been baked into company financial projections and, in many cases, had formed the basis of applications for borrowing,” said Kate Nicholls, chief executive of Ukhospitality. “Its removal creates a £2.1bn black hole in the sector’s finances in February.”

According to a survey conducted by Ukhospitality of its restaurant and pub members, 45pc of businesses expect they will be forced to make job cuts as a result of the bonus being scrapped.

The sector’s plea for help came amid warnings that leisure centres which have been forced to close may never reopen unless the Chancellor brings forward an urgent rescue package in his Spending Review next week. Meanwhile yesterday, the collapse of Patisserie Valerie was back in the spotlight as it emerged that Grant Thornton has been slapped with a legal claim by the liquidators of the cake chain.

High Court filings show that FRP Advisory has launched a lawsuit against Grant Thornton, as the auditor awaits the findings of a regulatory investigation into the scandal. Patisserie Valerie crashed into administration in January last year after the discovery of a £94m black hole in its accounts.