CEO Writes To NI Ministers On COVID19 Support Challenges

09 April 2020

HU CEO Colin Neill has sent the following letter to all NI ministers on the challenges facing our hospitality industry amid the COVID-19 crisis, specifically regarding the current range of support available.

Dear Minister,

Whilst we take no comfort that the hospitality industry is the worst financially impacted by the Coronavirus, and most likely the hardest of all sectors to rebuild and reopen, we welcome that fact that both Westminster and the Northern Ireland Executive have recognised that the hospitality sector is one of, if not the worst, financially impacted industries and have provided industry specific financial support.

As a local industry, we are doing all we can to cope with the immediate challenges brought about by the requirement to close, and are grateful for the assistance provided by the NI Executive to date. But, if we are to pay our furloughed staff and protect their jobs for the future, we need additional and immediate help.

In relation to the NI Coronavirus grants, there are a number of issues and challenges faced by our industry. For example;

With the coronavirus grants based on the NAV of the properties, if the pre-revaluation value is used, which appears to be the case, many businesses in the hospitality sector will lose out, as the sector has seen one of the highest percentage increases in the number of properties with an increased NAV following the revaluation processes.

We believe that ‘No one should lose out’, especially as the new, post-revaluation NAVs are now being used to calculate rates payable. Therefore, the grant should be based on the most advantageous NAV regardless of period.

Multiple Premises are currently limited to one £10k grant. This is causing real issues with small hospitality businesses with a number of premises, as each premises still has ongoing fixed costs, even when closed. This is especially concerning, as pubs, restaurants and hotels were required to close, and therefore have no form of income.

Under the existing SBR scheme, businesses with up to three premises with a NAV of £15k or less qualify for the relief on each premises.

We believe this formula should be applied to £10k grants as they are the same premises / businesses who qualify for SBR.

In relation to the £25k grants, whilst the details are still to be published, likewise, limiting this grant to one premises would also cause real issues, as each premises still have ongoing fixed costs even when closed.

We believe that, at the very least, businesses with up to three premises should have the grant payed on all three properties, using a similar formula to the current SBR.

However, given that pubs, restaurants and hotels have been required to close and, due to the nature of their business, are the hardest hit financially, with no option to work from home.

We believe that all businesses in the hospitality sector, regardless of their NVA should be eligible for a coronavirus grant.

With regard to small businesses operating under the ndustrial de-rating scheme , like brewers, distillers and cideries. These businesses are almost 100% impacted by the closure of pubs, hotels and restaurants as their main outlet for their products.

We believe these businesses should be included in the £10k grant scheme.

In relation to the three months rates holiday, which is very welcome, we would again make the case that hospitality has been the worst hit financially, and will take much longer to rebuild, reopen and recover.

We therefore ask that the rates holiday be extended to twelve months for all hospitality businesses.

In relation to furloughed staff, many small businesses are struggling to find the money to pay their staff and, if money is not forthcoming soon, we believe that we will be back where we started, with many businesses being forced to lay off staff without payment.

We recognise that the speed of payment is a matter for Westminster, but we would call on your good offices to:

Ensure Westminster deliver payment at the earliest opportunity and understand the urgency of the situation.

Strongly encourage the NI banks to provide interim overdraft facilities, using the furlough monies owed by the UK government as security.

I have already written individually to the four NI banks asking them to provide interest free overdraft facilities based on this security model. However, I have received a joint response stating they could not give preferential treatment to one sector. A position that I find weak, given that both the UK and NI Governments have recognised the hospitality industry’s unique position and challenges.

I believe it is also a morally week position, as they continue to operate on a commercial basis, whilst many of the other suppliers to our industry have shouldered some of the burden, and indeed some are buying back stock that will be poured down the drain as it has no commercial value.

I look forward to hearing from you.

Yours sincerely,

Colin Neill

CEO Hospitality Ulster