UKHospitality has warned that local authorities suffering from a lack of funds could have a negative effect on the hospitality sector.
A report from the Institute for Fiscal Studies claimed that funding for English councils has been cut by 21% between 2019-10 and 2017-18, with leisure and transport departments seeing cuts of more than 40%.
If councils are facing a funding crisis, this may lead to them turning to measures such as tourist taxes which could harm businesses in the sector, and in turn reduce local income from tourism.
Kate Nicholls, chief executive, UKHospitality, said: “The disgruntlement of local authorities about lack of funds backs up a lot of evidence put to the Hospitality APPG’s report on Tourist Tax, published today.
“Local government is struggling with an acute funding gap and, unless it is addressed, businesses, including hospitality, may ultimately end up bearing the burden.”
Nicholls said funding levels for councils ought not to be allowed to trickle down all the way to the front line of businesses, but it is having a visible effect.
“We sympathise with the difficult situation that councils around the UK find themselves in but we need a resolution that does not place an unfair financial burden on valuable hospitality businesses,” she added.