Cost of Covid Scotland loses 1,000 night-time businesses and many more may ‘shut in weeks’
MINISTERS face potential legal action by Scotland’s night-time industry which is trying to avoid collapse as it emerged some 19,000 staff have already been cut and 1,000 licensed premises have shut due to the Covid crisis.
With licensed premises due to ease out of lockdown from tomorrow, the Night Time Industries Association (NTIA) has warned that it will have to consider a legal challenge if there is no clear way for businesses to get back to trading properly and with no further financial support. It revealed that nightclubs, city-centre bars and music venues have already had to cut 44 per cent of the 43,000 staff they directly employ in normal times and there are a further 24,000 jobs at risk.
The trade association has claimed that the majority of night-time businesses could permanently close within weeks after running out of money to pay furlough contributions and fixed costs.
And it said it would have to consider a court challenge if urgent action is not taken.
Rising debts
CONCERN has come over rising debts and lack of action to support bars, pubs, nightclubs, live music venues, festivals and businesses in their supply chain.
The NTIA said the Scottish Government’s latest strategic framework update confirmed businesses will be subject to the “commercially unviable levels system of restrictions” despite financial support being withdrawn by the end of April.
The 10pm curfew imposed as licensed premises start to open from tomorrow was described by the NTIA as “devastating” for its members as most of the revenue is made after this time.
Analysis by the CGA and AlixPartners Market Recovery Monitor has revealed nearly 1,000 licensed premises in Scotland had already shut in the year to January with the numbers dipping below the 10,000 mark.
According to new official figures, the numbers employed in hospitality, arts and entertainment, including accommodation providers slumped by 20% in the year to December 2020 – despite the furlough scheme.
Numbers employed in the sector fell by 42,000 to 226,000.
The data shows that drops in employment in hospitality and entertainment are the hardest hit of any sector in Scotland. When pubs and restaurants open tomorrow it will be alcohol outdoors only and a 10pm curfew. Indoors, the curfew is 8pm and no alcohol can be served.
The monitor analysis shows that less than one-quarter (22.9%) of licensed premises in Scotland will have any space to use when it is open outdoors for drinking. The analysts say: “Scotland has far fewer community and food pubs with gardens or patios, reflecting heavy concentration in city centres – and, perhaps, the famed unpredictability of the Scottish weather.”
The Scottish Hospitality
Group which represents 200 businesses across Scotland further urged ministers to improve the trading times permitted under more relaxed Covid-19 restrictions.
Uncertainty
STEPHEN Montgomery, hotelier and SHG spokesman, said: “Hospitality staff are working at a frantic pace to get themselves out of hibernation and ready for next week. Many premises will still be shut though and it’s an uncertain future even for those who can reopen.
“We urge the Government to keep supporting viable but vulnerable businesses and to tweak the tiers in line with advice from those who really understand the industry.”
A survey of businesses by the NTIA shows a “staggering” 98% of firms in this sector say Scottish Government support has not been enough to ensure their survival.
It found businesses have run out of money and exhausted their capacity to borrow. The average business has taken on some £150,000 or more in Covidrelated debt just to survive, keep staff employed, and pay the bills over the last year.
The NTIA warns that with Government support funding now ended, and more money going out every month than is coming in, most are now facing an imminent risk of insolvency with the loss of all jobs.
NTIA spokesman Gavin Stevenson, the managing director of the Mor-Rioghain Group which owns venues in Inverness and Aberdeen including The Gellions, said that with the new restrictions financial support is imperative to avoid bankruptcies.
“If there’s no additional support and a pathway back to full unrestricted and viable trading imminently, we’d have to consider all options, including a legal challenge,” he said.
“Venues such as nightclubs, city-centre bars and music venues were first to close and will be last to open. Some, such as nightclubs, have been forced to close by law and there is still no reopening date in the Government’s strategic framework. Others, such as high street bars, have technically been allowed to open but at such reduced capacities that trading has not been economically viable.
“Measures to tackle the pandemic have left these businesses far more exposed to financial losses than is the case in most other sectors. Business insolvencies and mass job losses are now inevitable within weeks unless the Scottish Government acts urgently. The NTIA has written to First Minister Nicola Sturgeon earlier this month highlighting the issues.”
Many premises will still be shut though and it’s an uncertain future even for those who can reopen