Future of pubs under threat as one in three 'has no cash reserves'

The future of Britain’s pubs hangs in the balance with many facing crippling debt and empty coffers after the pandemic wiped out their cash reserves.

A survey of just over 250 members of the British Institute of Innkeeping (BII) showed the scale of the crisis facing the sector.

One in three respondents have no cash reserves in their business, while half of those with cash remaining said they only have up to two months before they run out.

Some 75% of publicans said their revenues were more than 20% down in 2021 due to the impact of lockdowns and coronavirus restrictions. Half of those saw revenues drop by over 40%, meaning the majority were loss making for the whole year.

Many pubs are still struggling with debts racked up during the pandemic, with 55% of respondents facing debts of over £40,000 per pub.

Half of the licensees said they will only continue to trade with further government support, while one in 10 believe their business is unviable and will soon cease trading. Of those, one in three have been in the trade for over 20 years.

Almost all (93%) of the pubs surveyed said they were facing levels of inflation about the national UK rate of 5.4%, with two in three seeing inflationary business costs of more than 10%.

In order to survive the crisis pubs are calling for a extension in the reduction of VAT, a suspension of business rates payments, and an increase in the draught duty discount to at least 10%.

One in four respondents said they needed at least a six months' suspension in their business rates payments to recover, while half needed a full year.

The BII, which has 10,000 members, has written to the chancellor to call for interim support for pubs to prevent closures that could cause “irreparable harm to jobs, lives and communities across the UK.”

Steve Alton, chief executive of the BII, said: “The BII are calling on the government, as the chancellor reviews the budget ahead of the new financial year, to safeguard these small, essential businesses, supporting local suppliers and brewers, at the heart of their communities,’ he said.

“This support will both safeguard pubs in every community across the UK and enable their role as an essential component of rebuilding communities and high streets, levelling up across the UK.”

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