UKHospitality: Energy and employees

Kate Nicholls, chief executive of UKHospitality, reflects on the government’s new energy bill discount scheme and the ongoing issues relating to recruitment...

It wasn’t exactly unexpected, but I’m sure a huge collective groan was emitted by contract caterers at the recent announcement that levels of support offered by the new energy bill discount scheme will be dramatically lower than what is currently given to the hospitality sector. Coming into force on 1st April and running for 12 months, the maximum discounts for most non-domestic energy users in Great Britain and Northern Ireland have been set at 1.961p per kilowatt hour (kWh) with a price threshold of 30.20p per kWh for electricity; and 0.697 per kWh with a threshold of 10.70p per kWh for gas.

A few hours after he made the announcement, I spoke to treasury minister James Cartlidge, expressing the devastating impact that the reduction will have on business viability. UKHospitality has also had two subsequent meetings with officials where we highlighted the importance of further energy support for our industry.

We’ve lobbied hard to represent the acute needs of our sector, but the government made it clear from the beginning of the original support scheme that it would be ruthless in protecting public finances upon the expiration of the scheme. Nevertheless, we were extremely disappointed to see no additional targeted support for hospitality, so we’ll continue to urge the government to consider other measures it can take to help businesses, including increasing the business rates relief cap.

UKHospitality has also written to Ofgem, setting out five actions it should take now to reduce the damage wrought on our sector and requesting a meeting to discuss the situation. I’m pleased to say that our meeting request was granted and, by the time you read this, we’ll have had it. With the chancellor set to present his budget on 15th March, our submission ahead of it will reflect the outcomes of that meeting and, regardless of that, will place energy and inflation firmly at its core, while also addressing the myriad other threats to the hospitality industry.

One of these is the challenging recruitment landscape contract catering businesses are facing, something that was reinforced by the most recent Office for National Statictics labour market data, which revealed vacancy rates still 63% higher than pre-pandemic levels. This is seriously hampering companies’ ability to trade and, with wages in the wider hospitality sector rising for some time, UKHospitality’s quarterly membership survey at the end of 2022 showed staff pay was up 12%, putting it alongside energy, food and drink as the most significantly rising business costs.

While there’s no simple solution to the sector’s recruitment crisis, we are anxious to see more ambitious initiatives from government, encouraging investment in skills and apprenticeships, and promoting education and immigration solutions where appropriate. Once hospitality has access to those it needs to fill essential roles, the likes of contract caterers will be able to trade much more freely and better able to drive and deliver economic growth, thus creating more job opportunities.

This is why UKHospitality’s first Workforce and Skills Event, which takes place on 1st March, is so important. Being held at London’s De Vere Grand Connaught Rooms, it will bring our members together to share experiences, learn from experts and receive updates on our sector’s skills landscape.

The day will focus close attention on the plans of our diversity, equality and inclusion committee.  We’ve invited the low pay commission to set out how the national living wages will evolve, and we’ll hear from experts on the immigration system, in particular about how it can be used to recruit chefs.

The full event programme will be released in the coming weeks, but in the meantime UKHospitality members can register for the event at: ukhospitality.org.uk/events/event_list.asp.

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