UKHospitality is in conversation with Mayor Sadiq Khan about the impact of recent transport policy decisions on London’s hospitality workers, CEO Kate Nicholls tells MCA.

The expansion of the Ultra Low Emission Zone and the impending abolition of the day travel card has been criticised by trade bodies for disproportionately affecting hospitality workers confronted with double payments.

While “keeping pressure” on the Mayor, Nicholls adds that UKHospitality also continues to lobby the government on other issues, such as the renegotiation of energy contracts and clarity on business rates.

“There are considerable headwinds, from debt to energy and food inflation, which is coming down – but slowly,” she says. “We need clarity on business rates for breathing space.

“We don’t know if inflation and interest rates have reached their peak…psychology plays into consumers. But consumer demand remains vibrant.”

Nicholls was speaking after an address at the Casual Dining trade show in London last week, where she discussed the issues currently facing the hospitality sector.

“The looming challenge for the sector now comes in the form of business rates,” she said. “As it stands, the tax rate on business rates is due to increase by inflation – currently in excess of 6% - and the retail, hospitality and leisure relief will come to an end, from next April.

“We estimate that these two measures combined could add close to £1bn to the overall business rates bill of the hospitality sector. That is simply unsustainable for many who have relied on the relief to see them through a challenging year.”

UKHospitality is engaging with the government to lobby to extend business rates relief and freeze the multiplier, “at an absolute minimum,” Nicholls added.

It is also urging the government to reconsider reducing VAT for hospitality, reforming the planning system, and easing recruitment challenges.

Nicholls also provided an update on the Hospitality Workforce Strategy, launched by UKH in summer 2022, to tackle the post-pandemic peak of 175,000 vacancies across the sector. The strategy set out five key areas: recruitment, skills and training, working lives, the reputation of hospitality, and infrastructure.

Vacancies have fallen by 33% - or 57,000 – since the launch of the workforce report.

“As I say, there is plenty more work to do to just get nearer pre-pandemic levels, but there is a real positive trend in vacancies reducing and the sector employing more and more people.”

The trade body has placed emphasis on offering opportunities to those economically inactive, ranging from increased flexibility and a new employment programme pilot scheme providing tailored learning to jobseekers in partnership with the Department for Work and Pensions.

The programme enables participants to earn an industry-recognised Hospitality Skills Passport, which can act as a central place for those within the industry to house their qualifications.

The scheme is currently running in Liverpool and will be expanded to London, Manchester, and Birmingham this month, with the potential for national expansion in due course.

UKH further expects the next 12 months to bring results from longer-term projects funded by the Department of Education, such as local areas including hospitality as part of their local skills improvements plans.

Another part of the strategy is tackling misconceptions to improve the sector’s image through the Hospitality Wellbeing and Development Promise, which sets out a set of commitments for the treatment of staff. More than 100 business, including PizzaExpress and Big Table Group, have signed up.

Nicholls also revealed one in three people now consider work in hospitality, up from one in five three years ago, with the help of the Hospitality Rising recruitment campaign.

Progress made also includes reforms to childcare and offering flexible shifts to bring parents back to work.

“We’re maintaining that there is a robust case for chefs, and other roles, to be including on the Shortage Occupation List and we’re continuing to call for simplification of the visa route, as well as an expansion of the Youth Mobility Scheme to EU countries,” Nicholls said.

“All of us attending the show today know the potential that hospitality offers – adding £93 billion to the economy, generating £54 billion of tax to fund vital services and employing 3.5 million people.

“Having businesses that can operate at full capacity with an engaged and skilled workforce will only help us grow those figures even further.”