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Month: May 2021

Staff Shortage Hits Hospitality Sector

The shortage seems to be most acute in London and the South-East.

Lorenzo Manconi, chief executive of Romet Group, a chain of nine restaurants and pubs in London and Essex, told The Economist that Brexit is part of the problem. Many of the European workers whom he put on furlough during the pandemic are now heading home. He has replaced them with Britons, and 70% of his staff have no experience. “They will need training and it will cost us extra and we aren’t sure if they are going to stay with us long term,” he says. Job postings for pub and restaurant positions on Indeed, a recruitment website, were up by 82% in the four weeks to May 7th, and are now 4% above their pre-pandemic level.

Another problem for recruitment has been that the sector has been closed for so long that a number of the employees have moved on to other jobs in sectors such as retail or logistics. In addition, some staff who might have moved into hospitality from other badly hit industries or firms are being left on furlough so there is no need to move jobs. Some firms are also quite likely to be keeping people on furlough until they can be brought back and why would you move from being paid to watch daytime TV to work in a hot kitchen! Those trained staff that are coming back are being given pay rises to retain them and demand for staff has been boosted by the social-distancing rule that pubs must serve customers at tables.

Some larger firms are considering raising pay but enforced closures have drained the reserves of many of their smaller peers.

In the London area, many pubs have put up their prices whether this is to try and recoup lost trade or a way to ensure that they can pay their staff better to retain them remains to be seen.

Why are there so many shut pubs and restaurants?

The simple answer is really 2-fold; Staff shortages and people not going back to the office. Many pubs and restaurants in London are just not seeing enough footfall and after-work get togethers to be sustainable. If there is any chance a business doesn’t have enough staff and so service is poor why take the risk on your brand? Some people have actually said after grants etc. they are better off closed!

 

Moves to stop rent arrears crippling hospitality firms

Business minister Kwasi Kwarteng has said he did not want rent arrears to “cripple” hospitality firms and that the government was looking at ways to help firms manage their debts. He told the BBC that the government was aware that hospitality businesses were facing a build-up in rent arrears after many months of not being able to trade normally. He said: “The government is working very closely together – the Treasury and [the Department for Business, Energy and Industrial Strategy] – to see if we can come up with an arrangement whereby tenants and landlords can work together to make sure this rent issue doesn’t cripple business.”

At the same time, Nisha Katona, founder of Mowgli, told the BBC that the UK’s high streets are already “littered with the gravestones” of independent bars and restaurants that didn’t have backers with deep pockets or hadn’t been able to negotiate concessions from their landlords. Katona said many businesses would make little or no profit while capacity was still restricted. She said: “In order to survive, what needs to happen is that we need to trade at the levels that we were trading prior to covid. While social distancing is in place, we cannot do that. Many places will not be able to make any kind of profit while restrictions are in place.” She fears many businesses will go bankrupt in the autumn as landlords demand rent arrears and says the government should look at things like business rates and VAT rates as well as support with debts due to landlords. Kwarteng said he hoped the final lifting of restrictions, including ending the need to distance indoors, would go ahead in June, but that he couldn’t offer any “cast iron guarantees”.

Hospitality Industry Loses Case To Reopen Earlier

The High Court has ruled in favour of the Government regarding allowing restaurants and bars being allowed to open ahead of the planned easing of lockdown measures.

The case was brought by Greater Manchester night time economy tsar and founder of Parklife and The Warehouse Project, Sacha Lord, and Hugh Osmond, founder of Punch Taverns.


They sought to challenge the decision to delay the reopening of indoor hospitality until May 17, arguing there is no justification or scientific basis for indoor hospitality to remain closed while other businesses such as non-essential retail have been permitted to resume trading.

The judgment came just hours before a SAGE report emerged, indicating that ministers had been advised that “eating out in any food outlet or restaurant was not associated with increased odds” of catching COVID.
In the report, SAGE scientists admitted that the risk of “transmission in hospitality, retail and leisure are relatively low” with just 226 outbreaks in hospitality venues since the pandemic began.
It is unclear when the SAGE report was written or submitted to ministers, but the report was not disclosed by the defence during the legal proceedings.

In the overview, the Honourable Mr Justice Julian Knowles dismissed the call for Judicial Review to bring forward indoor reopenings as ‘academic’, noting the necessary hearing would now be unlikely to take place before May 17, the date by which indoor hospitality is already scheduled to reopen.

Despite orders to expedite the case, the final judgement was delayed due to a backlog in the court system.
Hugh Osmond said: “This case is not ‘academic’ for an industry that is losing £200m every day it remains closed, for the over three million people who work in our industry, or for the tens of thousands of businesses, suppliers, landlords and contractors forced into bankruptcy by government measures.

“Our legal action gave them a fighting chance, yet once again in 2021, the strong arm of the state has come crushing down on hope and aspiration.

“The judge said that COVID ‘justifies a precautionary or cautious approach on the part of the Government’. But when a crucial SAGE report is ignored, this goes far beyond caution, and questions need to be asked about when this advice was sought and why this important evidence was not disclosed.

“I am deeply concerned that the judge’s main reason for refusing judicial review was because our claim ‘was not brought promptly’, even though we issued our claim days after the roadmap became law on 25 March, with the court taking a month to provide its ruling.”

He added: “This judgment drives a coach and horses through our normal constitutional processes. Are we really being told that we should have issued legal proceedings on the basis of a Prime Minister’s press conference and a yet to be published set of laws?
“Our democracy should be better than this. The roadmap was based on models, not data, and today we have the data.

“Vaccination, infection and hospitalisation rates are all far much better than was forecasted and the Government now has a chance to turn this around, to capitalise on the NHS’s brilliant vaccination roll-out, to follow the data rather than arbitary dates based on outdated models, to believe in vaccines and to get rid of these appalling and severe restrictions once and for all.”
Sacha Lord said: “We are disappointed with the outcome. While this fight has always been an uphill battle, made harder by the Government’s delaying tactics and refusal to mediate, we are pleased that the case has shone a light on the hospitality sector and the unfair and unequal guidance within the recovery roadmap.

“Through our legal challenges, we have achieved significant outcomes for the sector, abolishing the substantial meal requirement with our previous court action and lobbying hard to remove the 10pm curfew. Both of these results have had a hugely positive impact on operators nationwide who have been unfairly treated throughout this crisis and undoubtedly saved many jobs throughout the industry.

“Through our legal action, we have sent a clear, strong message direct to the heart of government. We will continue to advocate for those who have been unfairly impacted throughout this crisis, and despite the outcome, we will continue to hold the Government to account and demand evidence-based decisions, rather than those drafted without detailed analysis or based on bias or whim.”


On the ongoing impact on the hospitality industry, he added: “The hospitality sector has gone above and beyond to implement measures which provide safe, secure environments – measures which were, let’s not forget, advised as safe by the Government themselves and which the court already deemed to be effective based on the evidence we provided in support of our previous judicial review.

“There are thousands of bars, pubs and restaurants across the country which are still closed and whose owners and employees are struggling financially due to these unfair restrictions.
“For the 40% minority who do have outdoor space, this weekend’s weather has only exacerbated the ongoing struggles the industry has continually faced, and I’ve heard of countless pubs that have been forced to close early or who have had zero customers due to the bad weather.

“Not only does this severely impact on business and sector recovery, but on the staff whose wages, and ability to pay rent, food and bills, are at the mercy of something as unpredictable as the weather.”
Having considered the ruling with their legal team, Osmond and Lord have decided that there is insufficient time to challenge it before May 17. Osmond is reviewing other legal options in relation to the matter.

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