HUNDREDS of pubs, restaurants, hotels may not survive the coronavirus crisis and face permanent closure and thousands of job losses, figures in the industry have warned.

The sector plays a major role in Scotland’s cultural and economic life providing entertainment and social interaction as well as employment for people in urban and rural areas. It also helps to attract tourists from across the world.

Owners of hospitality business have welcomed government financial support schemes but say there are flaws with the initiatives in practice and fear some outlets do not to qualify for any aid.

Restaurants and hotels together account for around two-thirds of the tourism’s sector revenue turnover, according to a Scottish Government 2018 report.

“It would be fair to say hundreds of businesses may never recover and be forced to close for good,” Paul Waterson, spokesman for the Scottish Licensed Trade Association, which represents 10,000 pubs, restaurants, hotels and bars across the country, told the Sunday National.

Andy McCartney, who owns pubs and restaurants in Glasgow and Edinburgh, told of a series of problems he had while applying for financial help under the Chancellor Rishi Sunak’s Coronavirus Business Interruption Loans Scheme (CBILS).

The 36-year-old employs around 70 people in businesses which include restaurants Embargo in Glasgow and Damm Twenty Seven in Edinburgh and the Ram’s Head pub in Glasgow. He was due to open a further restaurant Glaschu in Royal Exchange Square, Glasgow, on March 23 the day of the virus lockdown. All premises are now closed in accordance with social-distancing regulations.

CBILS was set up to offer loans to firms with a turnover of up to £45 million. Companies can access the money through more than 40 approved lenders and 80% of the loan is guaranteed by the Government. McCartney applied for support under CBILS as soon as it was unveiled in March, but has yet to receive any money.

He has spoken to seven other operators in sector and none has received loans. He told of spending hours on the telephone chasing up his applications only to hear that some of the applications have been lost.

CBILS was updated to “business bounce back loans” last week meaning that 100% of the loan is now guaranteed by the Government. But

McCartney is sceptical. “The Chancellor said six weeks ago he would support small businesses and nothing would be too much trouble,” said McCartney.

“But everyone I have spoken to has had a nightmare applying for the loans. I have my loan applications in with different banks, but some have received no response or I’ve been told the application has been lost in the system and been told to reapply. I can understand we are in unprecedented circumstances and you would expect a time delay because of the volume of applications being made, but nobody is getting the loans, everyone is being knock backed.”

He added: “The new bounce back scheme sounds fantastic. It sounds like an easy process, and I welcome the change but it is taken with a huge pinch of scepticism. To date I’ve encountered nothing but problems. I’ve spent three of four hours a day on hold on the phone to banks. It’s really draining. I can understand why some people have just given up.”

McCARTNEY said he has applied for the furlough scheme for his staff and is waiting to hear back from HMRC. He fears if his businesses don’t get the support he has applied for, they will closure and his workers will lose their jobs.

“The magnitude of this is incomprehensible,” he said. “The Ram’s Head is predominantly a football pub so if [even after lockdown] there’s no football that eliminates 80% of our customers. The other huge problem is that even if we were to open on reduced capacities under social distancing measures our businesses couldn’t survive having a reduction of 30% to 40% of capacity.

‘‘We are just looking for fairness so that by the time a vaccine is found we still have a business and people in employment who we can put back to work.

‘‘My biggest fear is that we don’t get enough financial assistance and that we would have to call it a day and let everyone go.”

While McCartney’s problems concerns the UK support scheme, other hospitality companies have encountered problems relating the Scottish Government initiative.

Last week a consortium of Scottish businesses raised a legal action against the Scottish Government over the small business grant (SBG) scheme which the firms claimed penalises companies in Scotland.

The scheme gives £25,000 per business, compared with England, where companies can apply for £25,000 for each property the business operated. Last week Forbes added a further £120m into the SBG pot so that businesses can apply for £25,000 for the first property and a 75% grant on all additional premises.

Waterson estimates that around 1500 businesses in the sector are not receiving any support at all as they may be struggling to get loans under the UK initiative and do not qualify for grants under a Scottish Government scheme.

Under the Scottish scheme, a £25,000 grant is available for ratepayers in the retail, hospitality and leisure sector who have properties with a rateable value between £18,001 and £51,000, but many small businesses in the sector have rateable values over this figure.

“If the rateable value of your premises are over £51,000 then you don’t qualify for the grants from the UK and Scottish Government which are £10,000 or £20,000 depending on the size of the business,” explained Waterson.

“One of our members has a very successful 25 room hotel in the Borders. Good food, his bar is busy. Rateable value is linked to turnover. So his rateable value is about £75,000 and he qualifies for no grant. If you are self-employed and you’re taxable profits are more than £50,000 you don’t get any help. So if you slip through the net on both of those schemes, you don’t qualify for any help.”

He added: “We reckon there are about 1500 businesses in the sector in this situation in Scotland.”

A Treasury spokesman said: “We’ve taken action at unprecedented speed to help businesses, jobs and our economy during this crisis – with hundreds of thousands of firms across the county benefitting from our wide package of support.

“We have provided an extra £3.5 billion to the Scottish Government to respond to the crisis, and there has been great interest and our generous schemes to support business.”

A Scottish Government spokesperson said: “Our total package for businesses during this unprecedented economic crisis now totals £2.3bn – which is more than the consequentials we received from the UK Government.

“Our £20m Creative, Tourism & Hospitality Enterprises Hardship Fund is part of our package of support for firms in those sectors not in receipt of grants based on business rates. This is part of a £100m package of additional grant support for SMEs and newly self-employed people.

“Businesses in the hospitality sector, with a rateable value of more than £51,000 are eligible to apply.

“Ministers are listening to concerns from businesses as we continue to explore how best to help and we recognise the particular impact on our creative, tourism and hospitality sectors at what would normally be their busiest period.”