Should cash support for restricted firms rise?

WHO would want to run a hospitality business? With better times snatched away again in Glasgow late on Friday and hints from National Clinical

Director Jason Leitch that it would be over-optimistic to assume only one further week’s delay to fuller reopening, the hospitality industry just keeps getting kicked in the teeth.

Businesses in Moray at least had some advance warning. In Glasgow once again they were stood down with barely 48 hours’ notice.

The DRG owner Mario Gizzi – who has Amarone, Anchor Line and Cafe Andaluz in his group portfolio – put a figure of around £12,000 lost on staff preparation and stock costs for just one of his outlets.

Meanwhile, the Scottish Government announced that affected businesses would receive only up to £750 for each extra week lost, so you can imagine how much that is likely to assuage the anger of business owners who have been asked to carry the burden.

The Scottish Hospitality Group had already estimated back in January that the scale of debt racked up by Scottish bars and restaurants since last March was over £1 billion.

If you operate a business in Glasgow City Centre you might be forgiven for asking whether it is only you that has to abide by the regulations. Whether it was celebration or protest the weekend saw large crowds gathering in George Square in contravention of Scottish Government rules. As a result of these gatherings, many businesses were also unable to open the outdoor tables they have been heavily relying on to build up trade since the end of April and were forced to close altogether.

To be fair to the Scottish Government it does appear the decision to hold Glasgow in level three for the time being was taken with the greatest reluctance and the late announcement came in the hope that the case rates in the south side would stabilise. But once again communication with business groups has not been especially effective.

Equally the offer of additional grant support was set at a level in line with the strategic framework that has been paying out at up to £3,000 per month. For some weeks I have heard many a government minister acknowledge this was well short of the amount businesses were losing through paying for their rent, insurances, leases and those staff costs that are not covered by the job retention scheme.

The support is welcomed but it leaves many business owners doubting that the Government genuinely understands how business operates.

The circumstances are now changing. The decision in England not to delay the lifting of restrictions in northern towns like Bolton with similar spikes in case rates offers almost a control test for the Scottish Government’s approach.

Do we need to continue with localised lockdown restrictions whenever a spike emerges? Or should surge testing be relied upon to a greater extent? We shall soon find out if the English approach emphasising surge testing and relying more on the progress of the vaccination programme will work. If it doesn’t and we do need to continue with localised restrictions should they be set at the local authority level or can more tightly drawn boundaries be tried?

Further, for businesses that are affected should the financial support be increased to nearer the amounts actually lost?

As the relaxation of the lockdown continues then the number of businesses really needing support is reducing substantially so both governments should discuss whether they have the financial headroom to recognise that with increased grants.

That would go some way to rebuilding the relationship with those businesses that currently feel deeply disillusioned.