Kate Nicholls has warned operators the prospect of the furlough scheme being extended looks bleak.

Speaking to MCA as part of its virtual event The Conversation, the UK Hospitality CEO was discussing key pressing issues facing hospitality, such as possible extensions to the VAT cut and the cuts to business rates, extending the furlough scheme and solving the rent situation.

“All of those remain levers that government could look at extending, and obviously we’re talking to them about extending them, and they are live discussions, but there is no update to be able to provide today, sadly,” she said.

“The most pressing is that rent issue. You’ve got six months of accrued liabilities in any business that is going to hamper any future level of growth. Obviously you’ve got the September quarter rent day coming up fast to hit operators.

“They understand that they are reaching a crunch point, that’s why there’s active discussion around that end of the moratorium, but more importantly, can you resolve the fundamental issues underlying why you need a moratorium in the first place? That has to remain top priority, if we can get a solution on this rather than just continually kicking the can down the road.

“But clearly we need to have that protection for lessees so that we don’t force people out of business so that has to be a key step forward. Yes, the government understands what the winding down at the clock will mean all of these schemes. I think it’s just trying to work out where best to focus its attention to protect the greatest number of jobs.”

As for which area the government was likely to prioritise, she said the “least likely one is extended furlough. I think rent and business rates are really interlinked, you’ve got business rates pushed back in terms of the revaluation over the course of September as to what happens in April next year, about those bills coming back in because we’ve got a delay in the revaluation.

“It’s critically linked with rents, because if you don’t get rents readjusted, then you’re going to build in high property prices for the business rates system going forward. The next revaluation will take place in April 2021.

“So I think that’s the most likely for government to be looking at to intervene. That doesn’t necessarily mean it will be fiscal intervention, it could be non-fiscal measures, but I do think those are the two areas that are most likely [to be addressed first] out of those four.

“Furlough last of all, because I think the government is really clear that those whole economy schemes will come to an end, they can’t go on without a clear end point.”