UKH calls for action on rent debt

Trade body UKHospitality (UKH) has called for decisive government action on rent debt to help safeguard the hospitality sector's recovery.

Ahead of submitting its formal evidence, UKH has written to the government, urging it to adopt its proposals to help tackle the £2.5bn rent debt crisis that threatens the sector’s recovery and risks further widespread job losses.

In a letter to Communities and Local Government Secretary of State Robert Jenrick MP, UKH warns that while some landlords have adopted a collaborative and supportive stance to tenants, there is also a significant swathe of commercial landlords that have rejected this approach and are being heavy handed and aggressive.

"The time has come to get this issue sorted," says UKH's chief executive Kate Nicholls. As a starting point, our overriding principle is that businesses and landlords have to share the pain caused by enforced closures and restrictions.

"With the right outcomes, we can help to protect the hospitality sector in the short-term and accelerate its recovery – contributing to more jobs and reviving high streets and communities.

“As a sector we are as keen as landlords and other stakeholders for a return to normality but with existing Covid-19 restrictions in place, hospitality businesses are not profitable. We need to see restrictions removed on 21 June and then given breathing space to gauge customer demand.

"We are concerned that the removal of protections would be disastrous and result in a huge increase in enforcement activity – meaning business failures and jobs lost.

“With affirmative action from government, hospitality can begin to rebuild and be the foundation of a truly national recovery. We will recreate jobs, training opportunities and repair our beleaguered town and city centres in every part of the county. The alternative, to remove protections, is too catastrophic an option to entertain.”

Responding to the call for evidence

UKH has recommended the following points in response to calls for evidence, which align with the government’s options to provide a workable solution:

• Extending the protections for six months after Covid-19 restrictions are removed, targeted at sectors that have been severely affected by the pandemic
• Expanding the protections to include all enforcement activity, and particularly County Court Judgments, which undermine negotiations
• The developing of a national-level adjudication process on ‘legacy rent debt’ that should aim to share the pain of closure (with at least 50% of rent debt written off for this period, and at least 25% written off when the sector operated under restrictions)
• For landlords and tenants to come to reasonable repayment terms, led by guidance and further protections if necessary
• Deals already agreed between parties would not be affected by any adjudication.

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