An extended and flexible furlough scheme is critical to the survival of the UK’s hospitality sector, according to trade body UKHospitality.
It has written to the Chancellor calling for continued support through the Coronavirus Job Retention Scheme to ensure that businesses survive, and jobs are saved. It is estimated that around 2.4 million people are currently on furlough in the broader hospitality sector.
This includes the continuation of the 80% furlough pay until the end of September, with a tapered scheme until the end of the year, a removal of the three-week maximum period to increase flexibility among re-opening businesses, and sector-specific part-furlough schemes with pay shared between the government and the employer.
The letter also highlights low levels of confidence among hospitality businesses, with trading expectations as low as 88% on last year if businesses re-open in July, reinforcing the critical need for continued government support. Even by December, trade will be markedly lower than last year, putting people’s livelihoods at risk without further support.
UKHospitality chief executive, Kate Nicholls (pictured), said: “The introduction of the furlough scheme has been a crucial lifeline for many businesses and employees. It has helped hospitality overcome the initial crisis, saved businesses, and kept jobs open.
“As the government, and businesses, begin to think about re-opening, it is vital that furlough support continues. Abruptly turning it off would be a disaster and undo the good work that the government has already done.
“When lockdown lifts, a substantial number of hospitality businesses will be unable to re-open again and many of those that can will still be operating far under normal capacity. Confidence among businesses for the rest of the year, with even best-case scenario predictions, points to a huge drop in trading. Without continued support through the furlough scheme, businesses will fail and people will lose their jobs.
“We have reiterated our call for an extension of the scheme and an increase in flexibility to provide the maximum support and opportunity for businesses and their employees. If we do not get it, we are looking at an even greater threat to a sector that has already been hammered.”