Charlie Gilkes: It’s good to be back, but the hospitality sector is still on death’s door – Government help is critically needed

Charlie Gilkes
·3-min read
<p>Speaking out: Inception group co-founder Charlie Gilkes</p> (Levison Wood)

Speaking out: Inception group co-founder Charlie Gilkes

(Levison Wood)

It was lovely being back out in a London pub again, sipping on a draft beer, hearing the chatter and laughter, the sounds of order tickets printing and the clink of cutlery – but let's not delude ourselves. The UK’s hospitality sector is on death’s door, and in vital need of life support from a Government that so far has failed its duty of care.

Given the choice, few in hospitality would want to add to the Government's eye-watering debt or add further to the economic catastrophe the UK is facing – we’d prefer to be allowed to trade on a safe but unrestricted basis – but help is critical. This is an industry in crisis, crippled by the Tier restrictions. In the absence of anything like normal trade, the government needs to get real about the levels of support needed to keep our sector alive.

While the vaccine news is wonderful and it seems increasingly likely that things will go back to normal by April, without further support, next spring will be too late for thousands of restaurants, pubs and bars, and the UK’s third largest sector will have been destroyed.

There are some provisions in place and furlough certainly helps cover wage costs, but there’s still a sizable contribution companies need to make for those not working and it’s simply impossible to furlough all staff, even during periods of closure. My business, the Inception Group, needs to continue to pay people to keep our eleven venues maintained. Staff from accounts are needed to facilitate payroll and deal with suppliers, and we have to have our operations and financial teams working to plan and prepare for how we reopen, manage cash flow and communicate with the bank. Hospitality companies can’t just shut down in their entirety even when forced to close.

Workforce aside, there are many other fixed costs we pay out, including website hosting fees, annual software and rental subscriptions, utility bills and, of course, the big one: rent. Whilst some landlords have been pragmatic and supportive, others have not and the lease forfeiture moratorium is the only thing that has kept the wolves from the door for many. Many businesses, including ours, have tried hard to adapt but earnings from deliveries and “at home” kits don’t come close to replacing the lost income in venues, especially during these crucial Christmas weeks.

All venues in Tiers 2 and 3 areas need much more sizable grants to stay afloat; a £2,000 or £3,000 a month grant doesn’t come anywhere close to covering fixed costs and Boris' last minute £1,000 offer to wet led pubs is frankly an insult. It won’t pay the electricity bill, let alone anything else. We should do as France has, and make grants a percentage of normal trading revenue. A VAT and business rates cut also needs to be extended until the end of 2021, whilst the sector tries to recover.

Last week, the Chancellor pledged many billions to help get people back into employment. Surely he should instead tackle the root of the issue to stop them becoming unemployed in the first place, by adequately supporting beleaguered sectors, especially now we can see a return to relative normality on the horizon?

In the absence of anything like normal trade, the government needs to get real about the levels of support needed to keep our sector alive.

Without further meaningful support, hundreds of thousands more will sadly become unemployed and many more previously successful hospitality businesses will go to the wall. There may be light at the end of the tunnel but UK hospitality is going to need a lot more support to emerge from the dark.

Charlie Gilkes is the co-founder of Inception Group, which includes Bunga Bunga, Mr Fogg's and Cahoots.

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