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Revealed: Lockdown cost Aberdeen firms millions of pounds in lost Treasury support

Police officers patrol Union Street and Belmont Street in Aberdeen.
Police officers patrol Union Street and Belmont Street in Aberdeen.

Restaurants and cafes in Aberdeen are feared to have missed out on millions of pounds of Treasury support because of the city’s controversial lockdown.

Official figures show the Granite City’s constituencies had the lowest take-up of the UK Government’s lifeline Eat Out to Help Out scheme in mainland Scotland.

It has been revealed that £38.6 million of taxpayers’ money was spent subsidising 6.3 million meals in Scotland, including £9.6m in Edinburgh, £8.2m in Glasgow and £1.2m in Dundee.

Based on the average claimed in Scotland’s other largest cities, the Aberdeen economy would have benefited from £4.1m worth of crucial government support if local businesses had not been forced to close their doors again during the recent Covid-19 outbreak.

But the restrictions last month meant that just £400,000 was actually reclaimed from the emergency fund by businesses in the constituencies of Aberdeen North, Aberdeen South and Gordon.

Gordon includes parts of Aberdeenshire as well as the north of the city so the true figure for the locked down area will have been even lower.

The loss of millions of pounds worth of potential funding from the public purse has only added to the strain felt by hospitality businesses in the Granite City, many of which have been left fighting for survival after being unable to open for business while other places took full advantage of the scheme to attract a surge of customers.

And the figures have fuelled fresh demands for the discount meal initiative to be extended in Aberdeen.

The incentive, which offers up to £10 off per head for sit-in meals and non-alcoholic drinks, was only offered in August.

Discounts were available from Monday to Wednesday after it came into force on August 3.

But Aberdonians benefited for only two full days before First Minister Nicola Sturgeon forced all hospitality venues to shut on August 5, as part of the response to the resurgence of coronavirus in the city.

Local restaurateurs, business leaders and politicians have been urging the UK Government to extend the discount into this month in Aberdeen so that hard-hit firms can benefit in the same way as those in other areas.

Russell Borthwick, chief executive of Aberdeen and Grampian Chamber of Commerce, is among those putting pressure on the chancellor.

“It is clear from these figures that both businesses and residents in Aberdeen have missed out on hundreds of thousands of pounds worth of value and (it) throws into stark relief just why we were pushing so hard for the Treasury to extend the scheme in the north-east where our hospitality businesses have been operating under very difficult circumstances,” he said.

“Restoring consumer confidence is vital if we are to ensure the survival of local businesses and the Eat Out to Help Out scheme will have provided a lifeline to many in other towns and cities in recent weeks.

“Local schemes, such as the North East Now ‘power week’, which runs from September 7 to 13, will hopefully provide some incentive for consumers to support local but we continue to call on the Treasury and all other parties to make sure Aberdeen is not the only place in the UK unable to take part in this initiative and run it instead for three weeks in September.”

David Duguid.

Banff and Buchan MP David Duguid, a minister in the Scotland Office, revealed to Original 106 FM that he had personally lobbied the Treasury for an extension, but he added that it may be a case of “them’s the breaks” if city businesses miss out.

He said: “The whole Eat Out to Help Out scheme has been very popular around the whole United Kingdom. I’ve taken advantage of it myself a few times.

“And it is deeply unfortunate that the time Aberdeen was locked down was essentially the whole month of August, when the scheme was available.

“I have made representations to the Treasury to see if it could be considered. I’ve just done that as a local MP, it’s not my decision to make.

“But, if there are going to be local areas locked down in a period when a short-term scheme is available, I’m afraid it’s probably going to be that them’s the breaks, I’m afraid.”

Dozens of restaurant and cafe bosses, business leaders and politicians of all parties recently put pen to paper on a joint letter to Chancellor Rishi Sunak calling for the scheme to be extended in Aberdeen.

More than 30 businesses have decided to carry on with the discount system this month.

Aberdeen Central SNP MSP Kevin Stewart has been among those who have called for an extension of the initiative.

“At the beginning of the local lockdown I wrote to the chancellor, asking him to provide businesses in Aberdeen with further support, including asking him to extend the Eat Out to Help Out Scheme,” he said.

“At the same time, I wrote to Kate Forbes, cabinet secretary for finance, and she provided £1m of additional Scottish Government support for Aberdeen businesses.

“Unfortunately, I have heard nothing from the chancellor, who at the very least should add on additional time and resource for the Eat Out to Help Out scheme for the trading days that were lost here.”

Kevin Stewart MSP.

Across the UK, the Westminster government said the initiative protected jobs and boosted the economy, helping ensure more than 100 million meals were eaten by diners, with 84,700 establishments making 130,000 claims worth £522 million.

Asked if the scheme could be extended in Aberdeen, a Treasury spokesman said: “Our Eat out to Help Out scheme is one part of our wider package of UK-wide support that has helped firms across the Scottish hospitality sector.

“In total, 736,000 Scottish jobs have been protected through the furlough scheme, while 65,000 Scottish businesses have benefited from more £2.3 billion of support through government-supported loan schemes

“While it would be for the Scottish government to consider any further assistance for specific Scottish regions, the UK Government keeps all support schemes under review.”

‘Human error’ blamed for Aberdeen’s disappearing data

HM Treasury in Westminster, central London.

The UK Government appeared to forget about Aberdeen as it hailed the success of its Eat Out to Help Out scheme on Friday.

Claiming credit for helping to “protect the livelihoods of the 1.8 million people working in the hospitality sector”, the Treasury and the Scotland Office highlighted statistics that revealed that more than 100 million meals had been eaten as part of the initiative, with 84,700 establishments making 130,000 claims worth £522 million.

The figures were broken down by parliamentary area and sent to news outlets as part of the publicity drive, but two constituencies were conspicuous by their absence.

Aberdeen North and Aberdeen South – normally the first names on any alphabetical list of Westminster seats in Scotland – were missing from the document.

However, it was later discovered the Treasury had separately published data for all seats, including the north-east pair.

The figures duly confirmed that the Granite City had potentially missed out on millions of pounds of support from the UK Government.

Officials blamed the unfortunate mishap with the spreadsheet on “human error”.

Businesses call for scheme’s extension as Highland owner tells city what it missed

Aberdeen businesses and the council’s co-leader have called on the UK Government to make a special case for Aberdeen and extend the Eat Out To Help Out scheme for the city, after it missed out on its benefits due to the localised lockdown.

Last night Lucy Castle, who has run the Braided Fig restaurant and bar on Summer Street in Aberdeen for the past three years alongside her husband Steve, said she was “shocked” at the discrepancy between the benefits of the scheme in Aberdeen compared to the likes of Dundee.

She said: “It’s really disappointing to have missed out so massively on such a great opportunity.

“We are definitely all for the government to extend it in Aberdeen, and I don’t understand why that should not happen.

“Obviously, it would not cost them any more than it would have done had we not been locked down in the first place.

“We’re still hopeful someone somewhere will listen, but I can’t see it happening at the moment.”

Stuart McPhee, director of Siberia and part of the committee on the new Aberdeen Hospitality Together Group, said: “These figures bring into sharp context the local impact of not being able to take part in the scheme.

“We would like to see it extended, or in some way see a localised scheme.

“It has been an incredibly challenging time for an untold amount of businesses.

“What we need to be seeing here is something that can help bring back customer confidence.”

Conservative city council co-leader Douglas Lumsden said: “I’ve been calling on the UK Government to extend the scheme in Aberdeen.

“I think it was very unfair that out of the 13 nights of it, we lost out on nine of them.”

Scott Murray, director of Cru Holdings which runs restaurants and bars in Inverness and Nairn, said the scheme had been “exceptionally successful” for their Highland businesses.

He said: “It was always going to go one of two ways – either people wouldn’t want to come out because they didn’t feel safe or they were going to be desperate to get out.

“I think it was the latter of the two and that, combined with the Eat Out To Help Out scheme was a great catalyst.

“We welcomed much higher numbers than expected. Several thousand customers used the scheme, which was just phenomenal, and it was very welcome.”

Mr Murray said he’d brought staff back from furlough on August 1 and been able to return them to full hours almost immediately.