Scottish hospitality at risk as 10,000 businesses await rates relief decision

18/12/2023
Scottish hospitality sector faces precarious future as 10,000 businesses await rates relief decision.

A looming crisis confronts the Scottish hospitality sector as approximately 10,000 businesses teeter on the brink of insolvency, awaiting crucial rates relief support.

 The Fraser of Allander Institute’s recent analysis reveals a critical juncture for these establishments, urging swift action from the Scottish Government to provide relief akin to measures implemented in England.

The businesses in question find themselves ineligible for the small business bonus scheme, leaving them vulnerable during one of the most economically challenging periods in recent history. If the Scottish Government opts against introducing a business rates relief scheme, these enterprises could face dire consequences, impacting not only their survival but also the broader economic landscape of Scotland.

Leon Thompson, Executive Director of UKHospitality Scotland, emphasises the gravity of the situation, presenting the Scottish Government with a golden opportunity to allocate £230 million in support to one of Scotland’s pivotal sectors – hospitality, leisure, and tourism. Thompson stresses that the fate of nearly 10,000 businesses hangs precariously as they await the imminent Scottish Budget announcement.

“If rates relief is introduced,” says Thompson, “they have some degree of certainty and can fulfil plans to invest in and grow their businesses, delivering economic growth and creating even more jobs.” The alternative scenario, where the Scottish Government chooses not to act, paints a grim picture, leaving businesses without any support. Some may edge closer to permanent closure, while others will grapple with survival, unable to invest and contribute to economic growth.

Thompson deems it a tragedy if the Scottish Government neglects this opportunity, particularly when it had two chances to implement a reciprocal business rates relief scheme. The urgent calls from UKHospitality Scotland echo throughout the entire hospitality sector, underscoring the need for immediate action to prevent severe repercussions on Scotland’s economic and employment fronts.

In addition to rates relief, UKHospitality Scotland is pressing for the poundage rate to be frozen in the Budget, preventing an additional £20 million cost increase for the sector. The frozen poundage rate, combined with rates relief, could alleviate some of the financial strain on businesses and enable them to navigate the challenging economic landscape more effectively.

As the Budget announcement looms, the fate of these 10,000 hospitality businesses remains uncertain, symbolising a broader economic challenge that necessitates swift and decisive action from the Scottish Government to ensure the resilience and vitality of Scotland’s hospitality sector.

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