St Mary Street, Cardiff

Thousands of independent Welsh businesses ‘fear for their futures’

Restaurant survey says government support for hospitality industry is inadequate

The Welsh Independent Restaurant Collective campaign on behalf of independent Welsh hospitality businesses. Credit: Welsh Independent Restaurant Collective.

MORE than 80% of independent hospitality businesses in Wales fear for their futures because of inadequate government funding during lockdown, according to a survey.

The Welsh Independent Restaurant Collective was set up in March 2020 as a response to the pandemic and it represents around 350 hospitality businesses in discussions with Welsh government.

Its survey of over 100 independent businesses found that 84% said their survival was in doubt as a result of the inadequate level of support available.

The group estimates that this means there are around 4,000 independent businesses under threat across Wales.

The survey also found that 20% of businesses said they would definitely not survive without additional funding, which amounts to around 1,000 businesses across Wales.

Additionally, 57% said the reduced level of funding would result in further job losses.

Kasim Ali, 44, is one of six independent business owners who lead the collective.

Mr Ali’s business, Waterloo Tea, was set up in 2008, and has five teahouses across Cardiff and Penarth.

“Businesses have taken on loans, have taken on personal debt, but actually now it’s reaching crisis point.

“What’s going to give first? Are we going to give away our sites and give them back to the landlords?

“Or do we just say to the staff, sorry, we can’t afford to keep you,” said Mr Ali.

Businesses in Wales that have been forced to close because of lockdown have been able to apply for a Non Domestic Rate grant.

According to the WIRC, during the 17-day firebreak last year, Non Domestic Rate grants for hospitality businesses in Wales equated to a daily payment of £176 or £294, depending on the rateable value of the business.

The group says that the current NDR funding to cover the period from January 25 to March 31 equates to just £45 or £75 per day.

The Welsh Independent Restaurant Collective’s logo. Credit: Welsh Independent Restaurant Collective

While the government pays furlough to businesses to cover 80% of staff wages, business owners still have to contribute national insurance and pension payments for staff, in addition to paying rent.

Mr Ali says that one of his shops is only eligible for a £3,000 grant to cover a two-month period.

However, he has to pay £2,500 per month in rent, while furlough contributions for a two-month period amounts to £1,500.

This means that the business has to find an additional £3,500 on top of the money given to them in the grant.

“The level of funding that they are offering just doesn’t come close,” said Mr Ali.

Mr Ali worries that if funding isn’t increased, then it could mean that his business will be forced to close permanently.

“Will we go bust? If this level of funding continues after March it’s a serious consideration. I know a lot of people can’t, but we’ll be riding this through by going into loans,” he said.

A Welsh Government spokesperson said: “We know businesses want to be open and trading – we want that to happen as soon as it is safe to do so.

“The public health situation is improving thanks to everyone’s hard work and sacrifices but we all need to stay at home for a while longer to bring levels of the virus down further.

“We have worked hard to provide support for businesses while restrictions have been in place.

“For December to March, a hospitality business employing 10 staff will be able to claim up to £25,000 of Welsh Government grant support towards its operating costs, which is equivalent to £219 a day. This is in addition to UK Government support schemes.

“Since the beginning of the pandemic, the Welsh Government has ensured more than £1.7bn has reached businesses across Wales, to help protect thousands of firms and many more jobs.

“This is an incredibly difficult time and we will continue to review the options for supporting businesses further.”