Coronavirus (COVID-19) domestic vaccine certification: business and regulatory impact assessment

Consultation

We have not undertaken any public consultation on these measures. However, Scottish Government Ministers and officials have continued to engage with a wide range of sector representatives, to date at 6 roundtables and over 20 sectors and stakeholders (Annex A) from a range of specialisms, including events, music, sport, hospitality, cinema, theatre, music, museum, rural and the night-time economy, as well as business organisations, trade unions and the legal profession. They have represented the views of businesses; their diverse feedback has been considered and has informed this impact assessment.

Through this engagement a number of key themes emerged.

Appetite for expansion of Certification to include a negative LFD Result

Generally business opinion remains negative, both about the scheme in principle and how it has been introduced and communicated. However, related unions remain supportive and are keen for the scheme to be in operation in their workplaces and their members want to be safe at work and see this measure as one way for that to happen. The option to have a record of a negative LFD as an alternative method to access venues was welcomed by a number of key sectors including Hospitality, Night Time and Major Events industries. One stakeholder pointed out that the major obstacle at the moment was dealing with customers who were being refused entry. Adding the option of a record of a negative LFD to the current scheme would mean that venues could provide an alternative to simply refusing entry outright and reduce the potential for anti-social behaviour that could be experienced by staff working in affected premises, as well as potentially helping to provide access to venues to a greater number of clients, increasing revenues and reducing concerns with inequalities.

The hospitality sector and others however noted that if individuals were required to present a record of a negative LFD and a Domestic Covid Vaccination Certificate to gain entry to venues this would have a significant and disastrous impact of their sectors over a critically important period of trading.

Without a successful Festive period, some sectors stated that many businesses will struggle and ultimately may not survive into 2022. This point was also made by a theatre group who noted that 35% of their annual income was generated in December alone.

Hospitality trade bodies have consistently provided reports of members experiencing reduced footfall and takings. Hospitality stakeholders have advised of members experiencing footfall reductions of 20%-40%; falls in revenue of around 40% in affected venues^[fn], while a joint hospitality industry survey suggested that 87% of respondents that had been affected by certification saw trade levels fall by over 20%^[fn]. For example the Scottish Beer and Pub Association have indicated that businesses within the sector have been seeing up to a 40% drop in trade since the introduction of Covid passports; not just 40% down on normal times.

During stakeholder engagement roundtables a number of organisations noted their support for the introduction of a negative LFD as an alternative method of Certification. For instance, the Night Time Industries Association noted that they were supportive of the use of a negative LFD and also noted that they felt that this would address the significant issues of discrimination and equality associated with only a vaccination certification scheme; bodies like the Scottish Beer and Pub Association and the Scottish Chambers of Commerce have also expressed support for use of LFDs.

Voluntary checking of LFDs has already been used in some settings including the theatre and at the TRANSMT 2021 music festival in Glasgow in September 2021 where over 45,000 fans attending each day and used and were required to produce evidence of a negative LFDs to gain entry. Many stakeholders have seen the use of LFD tests for COP26 attendance and have suggested this as evidence to support their inclusion in the scheme.

At the most recent engagement with the Hospitality sector stakeholders continued to welcome the addition of testing but noted that there was still ongoing economic impact from the pandemic affecting footfall including through certification impacts. They noted including LFDs would help but suggested that experience from Wales could indicate that these may not fully offset these impacts. To help with this they would expect clear communication the public on expectations of them to allow for more spontaneous visits to night time venues i.e. ensuring clear comms that people should test before they go out.

Some businesses may still choose to take themselves outwith the scope of the scheme to avoid the requirement to undertake domestic vaccine certification however the introduction of the alternative of providing evidence of a negative LFD may mitigate this possibility.

Direct Costs to ensure compliance and enforcement

There are continuing concerns about having enough staff to implement the current scheme, given that the affected sectors are already facing a shortage of qualified stewards and front of house staff in general, as well as concerns for staff safety from both Covid and potentially dissatisfied customers/public order issues. Discussion with Securities Industries Authority (SIA) have noted however that there is a historically high level of licenced staff presently in UK but a significant number of these are currently working in other sectors. Licenced premises do not need to use SIA licenced members of staff to conduct checks of proof of vaccine status or record of test results or to refuse entry or service to customers who do not meet certification requirements.

However this does not remove the need for SIA staff from venues which already require them as part of their licence or insurance conditions. Also premises will want to carry out appropriate risk assessments to determine whether SIA staff are required in their circumstances.

The ATG Theatre Group noted that they currently administer a voluntary certification and testing regime at their 3 Scottish venues and accept Certification or evidence of a negative LFD for admission. At the Playhouse in Edinburgh providing this support costs around £700 per show in regards extra staff to check certification and cost of supplying LFDs to those who test at the venue prior to admission.

Costs were a concern mentioned by many: costs of new scanners, as stakeholders consider that it would not be appropriate for staff to use personal phones to scan QR codes; additional staffing costs; and other infrastructure. Upon providing stakeholders with further information about the technical infrastructure, the cost infrastructure concern reduced, but the staffing issue remained live.

Businesses are also concerned about the potential increase in the cost of their insurance, if they are unable to staff doors with qualified door staff, which for some may be a condition of their insurance cover. The hospitality industry reported that it can take up to 3 months to complete all training and checks for newly trained and accredited door staff, SIA have confirmed the number of SIA trained staff has increased.

Complexity, Justification and Communication of the policy

There remains concerns about the time to properly enforce the scheme, acquire the right equipment, and train staff to fully implement.

There is generally a strong desire for more information about how exactly the amendment to the scheme would work on the ground, and the need for clear guidance for all businesses impacted on how to deliver the certification scheme successfully. Stakeholders are strongly requesting a clear communications and marketing programme to ensure that all businesses and the public have a clear understanding how the scheme will be implemented and enforced with the addition of a negative test (LFD and PCR).

Legal Processes and equality issues

The night-time sector has raised concerns that they may face legal challenge on equality grounds from any customers who they are required to refuse entry, Scottish Government is not aware of any challenges to date, however, the introduction of LFDs could be seen as a way to mitigate many of the equality issues given the wide availability and access to free LFD tests across Scotland.

Following the FM announcement to include LFD testing the following were released:

Scottish Chambers of Commerce (SCoC) – 23 November 2021

Dr Liz Cameron, Chief Executive of the Scottish Chambers of Commerce

"Businesses across Scotland will be incredibly relieved that the First Minister has listened to the concerns of the business community.

"Although this will have been a difficult decision on balance for the Scottish Government, it was the right one, and it keeps Scotland moving in the right direction. It is now essential that businesses and individuals continue to follow the relevant COVID-19 restrictions and guidelines to ensure our economy remains open and growing.

"Businesses and consumers will now be reassured that they can make plans over the coming weeks in the run up to Christmas and New Year, without the fear of additional economic deterrents or vaccine certification burdens being placed on them.

"Scotland's businesses continue to do everything they can to support public health measures and to limit the spread of the virus, having invested millions into making workplaces Covid secure for employees, customer, suppliers and communities."

On Lateral Flow Tests:

"We are pleased that the Scottish Government have looked again at the available evidence and have acknowledged the clear benefits that LFD's provide.

"This is what businesses were calling for and it will also significantly ease and improve access to hospitality settings for consumers.

"Scotland was one of the few countries in Europe, where a vaccine certification scheme is in place, to not accept evidence of a recent negative Lateral Flow Test (LFD) in lieu of an individual's Covid vaccination status and confirmation that this will change from next month will be very welcome news for businesses, employees and customers."

Federation of Small Business (FSB) – 23 November 2021

FSB on vaccine passport Covid decision:

Andrew McRae, the Federation of Small Businesses (FSB) Scotland policy chair, said: "It's a relief that Ministers have taken on board the evidence from the FSB and others. Extending the vaccine passport scheme would have meant many local and independent Scottish hospitality and leisure firms making big changes to how they operate during a key trading period. These businesses will now have a weight off their shoulders.

"Feedback from our members showed that small cafés, restaurants and similar operators were worried that the extension would have put pressure on staff and driven up costs. It would have undermined many of these firms' plans for the festive period, many of whom are amongst the businesses hardest hit by this crisis.

"We agree with the First Minister that citizens, government and businesses of all sizes have a role in keeping this virus under control. That's why we'd urge all smaller firms to look again at the current Covid rules and ask themselves if they're doing everything in their power to play their part."

Confederation British Industry (CBI)

Tracy Black, CBI Scotland Director, said:

"Businesses still working hard to get back on their feet will welcome the Scottish Government's decision not to expand Covid certification. Many firms would have faced practical challenges and increased costs to implement measures at a time when bumper trading is needed to clawback lost or diminished revenues.

"Today's decision strikes the right balance between managing the virus and protecting our economic recovery.

"However, we cannot afford to lose sight of the fact that COVID-19 remains a threat. That means redoubling our efforts on mass rapid testing, maximising world-leading vaccine uptake, and continuing to deliver Covid-secure workplaces to keep staff and customers safe, and the economy open."

The Scottish Tourism Alliance (STA)

Marc Crothall, Chief Executive of the Scottish Tourism Alliance said:

"The Scottish Tourism Alliance welcomes the First Minister's announcement that vaccine passports will not be extended to the hospitality sector and that alternative measures can be used within businesses already implementing the scheme.

Our organisation has, since the outbreak of the pandemic, been in full support of evidence-based measures to balance the protection of public health and the economy, the proposal to extend vaccine certification to hospitality was in our view harmful to the sector, the wider tourism economy across all areas of Scotland and would have effectively stalled what is already a long and challenging road to recovery for one of the worst hit industries.

The next few weeks are crucially important to the sector in terms of recouping lost earnings as a result of the introduction of previous restrictions; I am sure that many businesses will feel a sense of overwhelming relief that they will be able to trade as planned.

The STA and other trade bodies and business groups had been consulted in the proposals to extend the vaccination certification scheme and I am delighted that the collective views and evidence we have presented have been given the thorough and due consideration we expected.

The feeling of optimism across our tourism and hospitality sectors was significantly eroded following the First Minister's announcement last week with businesses looking towards weeks and months of immense challenge and uncertainty.

We can now hopefully look forward to a thriving season ahead, one which is pivotal to our economic recovery and I know that all businesses within our sector will be doing their utmost to ensure public safety and limit the spread of the virus to ensure a safe and buoyant festive period

The STA will encourage our members and the wider industry to promote testing to their customers in a supportive, positive manner and we look forward to our continued conversations with both governments as we navigate the road ahead back to recovery."

Scottish Hospitality Group – 23 November 2021

The Scottish vaccine passport scheme will not be extended, at least for the time being, the First Minister revealed yesterday. The news came after weeks of lobbying by all Scotland's trade bodies.

In further good news, the First Minister also said that venues such as night clubs and late-night venues, who currently require a vaccine passport, from December 6th, can ask customers to show a negative lateral flow test instead. Although the NTIA is still campaigning to have the need for Vaccine passports in late night venues to be removed completely.

After the announcement Stephen Montgomery of the Scottish Hospitality Group said, "The announcement is very welcome news and gives the trade some stability coming into the Christmas period and allows customers to come out and enjoy themselves. It is a sensible decision based on the evidence

"We have said all along that working in partnership with us makes for a better result.

"I would like to thank the First Minister, Ivan McKee, Jason Leitch, and officials, for listening to our issues and for meeting us. We now look forward to working with them to further iron out the issues that the current vaccination scheme still has."

The Night Time Industries Association Scotland's said, "Whilst NTIA Scotland remain opposed to the continued application of vaccine passports in late night settings, we are encouraged by Scottish Government's decision today that the scheme will not be rolled out further at this time. This is a sensible and pragmatic decision which takes into account the extraordinary harm businesses have suffered as a result of restrictions over the last 2 years, the lack of evidence that this scheme has any meaningful impact on vaccine uptake, concerns around human rights, and also recognises that the current trajectory of infections and hospitalisations is falling.

"Vaccine passports have however been devastating to businesses already affected, with turnover down around 40%, so we now call on Scottish Government to urgently review whether continued application of the scheme is either necessary or proportionate and provide urgent financial grant support to those businesses that remain in scope of the scheme.

"It is a positive step in the right direction that Lateral Flow Tests will now be included as an alternative to double vaccination, which will safeguard late night venues in particular, and is something the trade body has advocated for from the inception of this scheme.

"This brings Scotland in line with other European nations, and partially alleviates at least some of the equalities and social exclusion harms that were previously the case. However, the experience in Wales indicates that affected businesses, even with LFT inclusion, have still suffered a 26% decrease in trade.

Our sector are working positively and constructively with government to increase public awareness and maximise Covid safety during the vital Christmas trading season."

Background

On the 1 October the Scottish Government introduced the Covid Vaccine Certification Scheme. The requirement for persons responsible for late night premises or a relevant event to ensure a reasonable system is in operation for checking Certification came into force on the 18 October 2021.

The Scheme was introduced in line with our strategic intent to 'suppress the virus to a level consistent with alleviating its harms while we recover and rebuild for a better future' and the policy objectives were to:

• reduce the risk of transmission of Coronavirus
• reduce the risk of serious illness and death thereby alleviating current and future pressure on the National Health Service
• allow higher risk settings to continue to operate as an alternative to closure or more restrictive measures
• increase vaccine uptake

On the 4 November, in response to a question asked by the Covid-19 Recovery Committee, the Deputy First Minister stated that 'Vaccination Certification could be extended to other sectors'.

In a statement to Parliament on 9 November the Deputy First Minister stated that Ministers had been 'considering […] whether we may need to extend the Covid Certification scheme to bring more settings into scope, such as indoor hospitality and leisure settings.'

On 16 November, in a statement to Parliament, the First Minister stated that:

"we will be assessing in the coming days whether, on the basis of current and projected vaccination uptake rates, [whether] we are now in a position to amend the scheme so that in addition to showing evidence of vaccination to access a venue, there will also be the option of providing evidence of a recent negative test result. […]

We are also considering whether an expansion of the scheme to cover more settings would be justified and prudent given the current state of the pandemic."

On the 19 November the Scottish Government published a follow up Evidence Paper which sets out the evidence published on Certification since the original Evidence Paper (published here) surrounding Certification, including information on vaccination and testing. This can be on the Scottish Government website here.

On the 23 November the First Minister gave an update to Parliament on the state of the pandemic and provided information on the expansion of the Certification scheme:

'Firstly, for at least a further three week period, we will retain vaccine certification for the venues and events currently covered by the scheme - that is late night licensed premises with a designated area for dancing; unseated indoor events of 500 people or more; unseated outdoor events of 4,000 people or more; and any event with 10,000 people or more.

Given the current state of the pandemic, it is our judgement that it would not be appropriate at this stage to remove this protection against transmission.

Secondly, however, we have decided that from 6 December it will be possible to access venues or events covered by the scheme by showing either proof of vaccination, as now, or a record of recent negative lateral flow or PCR test result taken within the last 24 hours.'

Options Considered

Option 1: Retain mandatory vaccine Certification in higher risk settings (current policy)

As outlined above this option would feature:

• Certification for access to specified settings required for entry
• Mandated in regulations
• Public use of paper vaccine certification or digital NHS Scotland Covid App NHS
• Event/venue use of Verifier App – NHS Scotland Covid Check app to verify QR code
• Implementation supported through Scottish Government Guidance
• The policy will be subject to three-weekly reviews.

Sectors and Groups Affected

These Regulations will affect:

• Late night venues with music alcohol and dancing;
• Indoor cultural performance venues associated with live events, particularly larger venues that stage unseated performances;
• Outdoor venues associated with large cultural or sporting gatherings, such as larger sports stadia and race courses;
• Conference centres, in instances where staging large scale seated or unseated live events, trade fairs open to the public, markets or exhibitions;
• Businesses involved in the organization and staging of live events, such as performers, event promoters, staging and production businesses, associated supply chain businesses;
• Business events that entail a 'peripheral' reception or function outside of the core hours of the event, which would not be excepted should they meet the criteria for certification. Business event professionals note that the majority of high value business events in Scotland encompass receptions that would be in scope (500+);
• Ancillary businesses dependent on live events (e.g. food and drink sales, merchandising);
• Prospective attendees at live events;
• Local Authorities, as they would be required to undertake monitoring and enforcement activities arising from regulations.

Scottish Ministers will also continue to assess whether any less intrusive alternative measures could be introduced to achieve the same combination of policy objectives in respect of the higher risk sectors concerned. The current default position would be that the certification provisions, along with the rest of the Principal Regulations would be due to expire on 28 February 2022.

Option 2: Retain mandatory vaccine Certification in higher risk settings (current policy) and amend Certification to include a record of a negative test (LFD or PCR result) as an alternative to proof of vaccination

Option 2 would feature:

• Certification for access to specified settings required for entry either certificate of vaccine or record of a negative test (LFD or PCR within specified time frame of 24 hours)
• Mandated in regulations
• Public use of paper vaccine certification or digital NHS Scotland Covid App or demonstration of a negative LFD or PCR result as reported to the public reporting system
• Event/venue use of Verifier App – NHS Scotland Covid Check app to verify QR code for vaccine certification
• Implementation and compliance supported through Scottish Government Guidance

Sectors and Groups Affected

These Regulations will affect:

• Late night venues with music alcohol and dancing;
• Certain indoor cultural performance venues associated with live events, particularly larger venues that stage unseated performances;
• Certain outdoor venues associated with large cultural or sporting gatherings, such as larger sports stadia and race courses;
• Conference centres, in instances where staging large scale seated or unseated live events, trade fairs open to the public, markets or exhibitions;
• Businesses involved in the organization and staging of live events, such as performers, event promoters, staging and production businesses, associated supply chain businesses;
• Business events that entail a 'peripheral' reception or function outside of the core hours of the event, which would not be excepted should they meet the criteria for certification. Business event professionals note that the majority of high value business events in Scotland encompass receptions that would be in scope (500+);
• Ancillary businesses dependent on live events (e.g. food and drink sales, merchandising);
• Prospective attendees at live events;
• Local Authorities, as they would be required to undertake monitoring and enforcement activities arising from regulations;
• Royal Mail postal services in connection to the distribution of postal test kits.

Assessment of Options

This BRIA has set out the relative costs and benefits of options with the intended effect of suppressing the virus whilst acknowledging and minimising the economic harms faced by businesses.

Option 1: Retain mandatory vaccine Certification in higher risk settings (current policy)

Costs

Under this option, those without vaccine status would continue to be unable to gain entry to late night venues with music, alcohol and dancing, or specified indoor and outdoor live events. Costs from this option will potentially arise from: additional direct costs incurred by affected businesses to ensure compliance with the Regulations; reductions in footfall and attendance at venues and events covered by the Regulations; and cancellation of events and refunds to customers; associated cash-flow impacts.

Implementation Costs

The previous BRIA and the Scottish Government's Evidence Papers^[fn] described a range of potential cost impacts on businesses associated with implementation and delivery of certification. Examples of these costs included:

• Additional resource for recruiting or training staff to check certification.
• Dedicated hardware to scan or read certification (mobiles/tablets) and/or install technology to check QR codes at automatic entry barriers.
• Cancellation of tickets and refunds
• Additional policing costs arising if there are scenes of disorder at sports stadia due to long queues caused by certification checks.
• For business events, additional complexity of exempting one element of the programme (e.g. standing receptions), with associated cost and reputational risk of denying delegates who are attending this and all other elements in a work capacity. Business event professionals have shared that the majority of high value business events in Scotland encompass receptions that would be in scope (500+).
• Costs to Local Authorities of monitoring and enforcing certification

While some of these items of cost, particularly related to technology, could be described as one-off implementation costs that businesses would face and may have already incurred, those associated with recruitment, training and payment of staff, and LA enforcement costs, would potentially be ongoing direct costs associated with implementation and compliance.

The NHS Scotland Covid App will continue to be provided for free, the accompanying Guidance on how to implement within businesses now being live on the Scottish Government website.

The extent of ongoing costs borne by businesses affected by certification will likely vary across businesses, depending on the scope to integrate them into existing staff functions, use existing IT infrastructure, or physical infrastructure. These costs may be higher for businesses that have not delivered a similar function historically, such as venues that do not charge for entry and have previously not had a need for door staff but may now require some to check vaccination status at the point of entry.

Staff costs represent a large component of the overall running costs of businesses in some of these sectors. For example, in the Accommodation and Food Services sector overall, labour costs are estimated to account for 42% of total costs at a sectoral level, compared to 25% across all sectors, while in Arts, Culture and Entertainment sector labour costs are estimated account for around 18% of total costs.^[fn]

Impacts on staff costs would likely vary across businesses depending on several factors, particularly whether the Regulations' requirements are accommodated within existing staff responsibilities or require additional staff. If additional staff is required, costs would be influenced by factors such as numbers of staff required, and number of hours required each week. Hourly and weekly gross wage costs for occupational groups that would be affected by the regulations are set out in Table 2 below. It should be noted that these statistics do not include non-wage labour costs, such as Employers' NIC and pension contributions:

Table 1. Gross Mean Hourly and Weekly Pay, Selected Occupations, 2019. Source: ONS, Annual Survey of Hours and Earnings 2019, Tables 15.1a, 15.5a

	Mean Gross Hourly Pay, £			Mean Gross Weekly Pay, £
	All	Part-Time	Full-Time	All	Part-Time	Full-Time
Security Guards & Related Occupations (SOC 9231)	£11.09	£12.50	£10.91	£409.30	£216.20	£467.60
Bar Staff (SOC 9265)	£8.37	£8.38	£8.36	£151.90	£123.30	£303.40

It is noted that there is a widely reported difficulty in securing sufficient numbers of stewarding and hospitality staff at present, due to labour shortages. For instance, in the period 18-31 October 2021, 61.2% of businesses in the Accommodation and Food Services Sector reported that vacancies were more difficult to fill compared to normal expectations for the time of year, and 52.7% reported having a worker shortage^[fn]. Hospitality stakeholder organisations have consistently highlighted challenges in the availability of SIA-accredited door staff. There is also evidence of continued strong growth in vacancies in areas like hospitality^[fn]. These could create challenges for affected businesses across affected sectors in recruitment of numbers of staff required as a result of regulations.

Feedback from Event Sector member organisations to Scottish Government officials has indicated that those affected may have experienced additional costs associated with implementation. Feedback from one theatre group has indicated that additional staffing costs associated with implementing certification have been of the order of £6,600 per week at a specific larger venue^[fn]. Sports sector stakeholders have reported that additional stewarding has been necessary to implement certification as currently designed^[fn].

The magnitude of these costs in coming months will be closely linked to the level of enforcement expected from businesses, the type and footprint of venues, and flow of customers at venues and events. Current certification arrangements have varied across settings with guidance taking account of the differences between a venue where there are a smaller number of people queuing to enter the premises compared to a large event such as a sporting event with multiple entrances and larger crowd control required: for instance, late night venues have been required to operate a 100% check on entry, given the option for a visual check. For large events, spot check arrangements have been in place.

This option may have further financial impacts on events which run over a prolonged period of time such as trade fairs and exhibitions which often run over a number of days. The combination of extended event times and changeover in attendees may require additional staffing capacity to allow for certification checks, in addition to standard ticket checks.

For business events there is additional complexity of exempting one element of the programme (e.g. standing evening receptions), with associated cost and reputational risk of denying delegates who are attending this and all other elements in a work capacity. Business event professionals have shared that the majority of high value business events in Scotland encompass receptions that would be in scope (500+).

There have also been reported incidences reported of individual premises changing their offerings and business models (such as through reducing opening hours or converting their premises) to avoid falling within the requirements of certification^[fn]. These may have resulted in costs to individual businesses arising from decisions around implementation of certification.

Anti-Social Behaviour

Stakeholder representative groups have also consistently highlighted the risk of increased anti-social behaviour, should customers be refused entry on grounds of not having appropriate certification. Hospitality and Event industry stakeholder groups have provided anecdotal feedback of increased aggression towards security staff and stewards in some contexts, while almost 80% of respondents to a hospitality industry stakeholder group survey indicated they or their staff had received physical or verbal abuse as a result of enforcing Covid regulations[fn]. This could impact on recruitment and retention of staff, and importantly, on staff wellbeing.

Local Authority Enforcement Costs

As outlined in the original BRIA there are costs associated with Option 1 in relation to enforcement. The Local Authority Covid-19 Expert Officer Group estimated the costs to Local Authority Regulatory service at £225,000, based on the assumption that there are 2,000 businesses and 500 events in scope in the initial 6 months from Oct 1. Scottish Government have committed to monitoring and evaluating the impact of the scheme on local authority resources and have allocated funding of £2.9 million to local authorities to year end to support with Covid compliance activity. The premises in scope have not been expanded therefore there is no additional types of premises where LAs would have a role in enforcement.

Loss of revenue through reductions in footfall and attendance

Businesses subject to Certification may experience a reduction in customer footfall and attendance, as those without proof of vaccination would be refused entry. Customers may view Certification as a barrier, especially if groups socializing together are divided into certified and non-certified. This could lead to a reluctance to visit venues and attend events where Certification is needed, opting to visit venues and events which do not require it. Those affected may also choose to stay at home or go out earlier in the evenings to avoid certification. The anticipation of delays in entry and experience of the customers entering venues and events where Certification is required may influence choice, opting for less onerous options. Taken together, these may result in loss of direct footfall for some businesses. Loss of trade and revenue for participating venues could heighten pressures on individual businesses' viability.

The previous BRIA and the Scottish Government's Evidence Papers described the potential for impacts on footfall and revenues for businesses affected by certification. It is challenging to directly identify the impact of certification on losses of footfall and turnover experienced by individual businesses, owing to the relatively short space of time that certification has been in place, and potential impacts from other contributory factors. However, emerging reports from stakeholder organisations in the hospitality sector have consistently suggested that nightclubs and late night settings affected by certification have experienced substantial reductions in footfall and revenues since introduction of certification. Trade bodies have consistently provided reports of members experiencing reduced footfall and takings. Hospitality stakeholders have advised of members experiencing footfall reductions of 20%-40%; falls in revenue of around 40% in affected venues^[fn], while a joint hospitality industry survey suggested that 87% of respondents that had been affected by certification saw trade levels fall by over 20%^[fn].

Events sector stakeholders have also provided anecdotal evidence of business impacts. Individual events organisers have advised of larger drop-offs in actual attendance compared with ticket sales than would typically be expected^[fn].

Footfall in the settings that currently fall within certification requirements is potentially substantial. YouGov polling for 2-4 November^[fn] suggests 5% of those polled had been in a nightclub or late night venue in the previous week, while 10% had been to any sort of venue/event eligible for certification (a nightclub or late night venue or large event). Generally levels for each of these are higher among 18-29 year olds than other. Pre-pandemic, there was also evidence to suggest that larger portions of 16 to 24 year olds, 25 to 34 year olds, and 35 to 44 year olds had attended live music events in the previous year than the share of the population overall^[fn].

Footfall could be impacted in the following ways:

• Those without certification would be refused entry (which in turn depends on numbers vaccinated)
• Others may be reluctant to attend if non-certificated friends were unable to attend
• Entry delays could deter customers if onerous.

The extent of economic harm would arise from the numbers of unvaccinated people within the population overall, and those who are not fully vaccinated in the previous fortnight to expansion at the point at which certification requirements would come into effect. If people within this group were unable to enter settings, this would represent a loss to the potential customer base to affected businesses and sectors, and therefore a source of economic harm. The depth and duration of economic harm would depend on the speed with which people became vaccinated and eligible for certification, and the availability of alternatives to vaccine certification, such as a negative test result.

Under the current requirement for a minimum of 2 weeks between individuals receiving their second dose of vaccine and being eligible for certification, vaccine uptake data^[fn] suggests that:

• Around 88.3% of the overall population aged 18+ had received two doses of vaccine by 24 November, and would therefore be eligible to access certification by 8^th December.
• Among younger age groups, this proportion fell to 69.5% of those aged 18-29, and 77.9% of those aged 30-39, and 87.9% of those aged 40-49.

Should those currently unable to access certification be unable to access premises that require it, this could generate reductions in footfall and turnover for affected premises.

In addition, industry stakeholders have highlighted that there may be negative impacts arising from groups of customers choosing to avoid venues where certification is required in response to some of their members not having appropriate vaccination certification. There may also be impacts on footfall at individual venues should the process of checking certification add to the time taken to enter venues.

However, there may also be improved footfall and associated revenues from increased perception of venues requiring certification as being of lower risk than alternatives. YouGov polling data for Scotland in late September suggests that, while a certification scheme would make one in three (30%) of those who would potentially visit venues covered by certification more likely to visit a venue or event that requires it, just under one in five (18%) say that it would make them less likely to do so^[fn]. From the 19-21 October (Week 83), these figures reduced to 29% saying the scheme would make them more likely to visit and venue or event, 20% as less likely to attend.^[fn]

Loss of revenue through cancellation of events and customer requested refunds

Live events businesses, including concerts and trade fairs open to the public, may also experience additional impacts under this option if unvaccinated customers who had bought tickets for events before the commencement of this option are subsequently unable to attend. This may generate demand for refunds or transferability of tickets leading to additional cash-flow pressures for event organisers who may not be protected in Terms and Conditions, as it was not a stated condition of entry. To date there has been no funding from Scottish Government to support any events to cover the cost of cancellations as a result of the Certification scheme being introduced

Customer cancellation costs may partly come from overseas visitors who have difficulties proving their vaccination status. The Verifier app for business has been developed to be able to read QR codes from the other UK nations and Crown dependencies, as well as from any individual using the EU Digital Covid Certificate scheme, which Scotland is now part of Visitors from other nations, such as USA, can provide the same proof of vaccination status that is accepted for entry into the UK. There is significant variation across the globe on what vaccine certifications/proof of vaccination look like and how they work – and not all will be acceptable if they are not to a certain standard. For domestic certification purposes, only MHRA-authorised vaccine are acceptable and this does not include the WHO list vaccines (including the Chinese vaccines Sinopharm and Sinovac and the Indian vaccine Covaxin). However, there is still a risk of lost business at larger events that have a significant international audience beyond the EU. For example, Edinburgh's Hogmanay in 2019 had visitors from 58 different countries.

If live events businesses are unable to ensure that their show is financially secure in advance - through guaranteed ticket sales - they may cancel events. Equally, if ticket sales are at risk, there could be a subsequent impact on the ability of event organisers to secure exhibitors, performers and sponsors – a major source of revenue – and similarly may cancel events due to a lack of viability. Cancellation of events may also arise if the direct costs of ensuring compliance, such as additional stewarding, threaten the viability of the event. Cancellation of events would impact on a number of sectors, including the tourism industry.

Events sector stakeholders have also provided anecdotal evidence of business impacts^[fn]. Individual events organisers have advised of larger drop-offs in actual attendance compared with ticket sales than would typically be expected. Individual events have also provided anecdotal evidence of small numbers of individuals being refused entry to specific events as a result of certification, and of refunds being requested, but with these potentially having varied by event type. There have also been examples where certification has been mentioned as a factor in organisation of specific events: certification is in operation in Edinburgh's Hogmanay, which will be operating at reduced capacity; while certification requirements, specifically the additional queueing time, were cited as one of the reasons for Glasgow cancelling the George Square Lights 'switch on' and Christmas market^[fn] .

Benefits

This option could result in some public health benefit and would reduce the risk of infection and transmission of the virus and subsequent hospitalisations and pressure on the NHS. SAGE said that one approach to reducing the risk of non-isolated cases entering high risk settings is a COVID certification scheme - based on negative testing, vaccination, or record of a prior infection. SAGE considered with a medium confidence that a certification scheme could have medium effectiveness.^[fn] The public health impact has grown as the percentage of certification checks has been increased, recognising that operators may have needed to take a graduated approach to building up the percentage of checks. As the frequency of checks rose, with both customers and businesses getting used to the scheme, the robustness of the scheme from a public health perspective increases.

Reducing transmission would benefit business as it would reduce the likelihood of implementing more onerous restrictions or closing sectors completely.

There may also be additional benefits to affected venues and businesses should this option result in a competitive advantage for settings in scope, as they would be perceived as 'less risky' environments. This may provide reassurance to previously reluctant or risk-averse customers and encourage greater attendance, with positive revenue impacts. This is supported by evidence on public attitudes: research carried out by YouGov for the Scottish Government highlighted attitudes towards the benefits and concerns of a Certification scheme. Around three quarters (74%) would be happy to share their vaccination status or test results via a certification scheme to allow entry to a venue and 62% say that this would make them feel more comfortable if they were to go to a venue or an event (up from 58% in early June).^[fn] More recent polling data for Scotland shows that over half of all adults (59%) say that they support the introduction of Certification (fieldwork 2-4 November). Around a quarter (24%) oppose the scheme.^[fn]

Option 2: Retain mandatory vaccine Certification in higher risk settings (current policy) and amend Certification to include a record of a negative test (LFD or PCR result) as an alternative to proof of vaccination

Costs

Implementation and Operating Costs

It is not anticipated that there would be additional costs on businesses within scope directly associated with implementing this option, over and above those associated with implementing certification more generally. This option represents an alternative check to the NHS Scotland Covid Status app/PDF or paper certificate, rather than an additional check.

There is clear guidance around how and when to take a LFD test, however, some businesses within scope have indicated that where customers do not have either proof of vaccination or record of a negative test result the business may decide to provide a test kit so that the customer can leave and take the test safely. Any costs of this would fall to that business and if businesses choose to do so, there would potentially be an ongoing cost arising from businesses purchasing additional stock on an ongoing basis.

However, this practice is strongly discouraged by the Scottish Government in updated Guidance which clearly states that businesses should not distribute test kits to prospective customers. The distribution of test kits needs to be carefully managed to meet regulatory requirements to be able to recall test kits from users in the event of a performance or safety issue with the tests. Additionally, lateral flow tests are designed to be used at room temperature, on a flat, clean, dry surface with the ability of the user to wash their hands thoroughly before use to avoid contaminating the test. Individuals should be encouraged to test before they leave home to reduce the transmission risk.

Wider Impacts

Under this option, as the percentage of the population who are vaccinated increases and plateaus, implementing certification to include testing could potentially be perceived by some customers as creating more risky environments as vaccination is not incentivized. This could lead to loss in revenue through a small reduction in footfall, attendance and an increase in cancellations.

The Royal Mail postal services could be impacted upon. The UK Government have a contract in place with Royal Mail for the distribution of postal test kits (PCR and LFD) with agreed volumes to cover any demand that arises (up to agreed thresholds) and those contracts cover all parts of Scotland including rural areas and islands. The addition of testing for domestic certification purposes will have a very minimal impact on the volumes handled through that contract in addition to the 2-3 million tests that we are already distributing each month by post in Scotland (a) because the scope of settings covered remains relatively small; and (b) the numbers of people likely to need a test because they are not vaccinated is not likely to be significant and is reducing as more people become fully vaccinated.

In addition, pharmacies have a similar dedicated contract in place for the distribution of LFD tests, with agreed volumes to cover any demand that arises (up to agreed thresholds) and those contracts cover all parts of Scotland including rural areas and islands. The addition of testing for domestic certification purposes will have a very minimal impact on the volumes handled through that contract in addition to the 1 million+ tests that we are already distributing each month through pharmacies.

Benefits

This option could provide public health benefit as it would contribute to reducing the risk of infection and transmission of the virus and subsequent hospitalisations and pressure on the NHS over and above that provided by Option 1. and would increase customers' options to socialise, providing wider social benefit while offering increased protection through vaccination and testing. SAGE said that one approach to reducing the risk of non-isolated cases entering high risk settings is a COVID certification scheme - based on negative testing, vaccination, or record of a prior infection. SAGE considered with a medium confidence that a certification scheme could have medium effectiveness.^[fn]

By widening the scheme to include testing, many of the concerns raised by the night-time sector around equalities and potential inequalities faced by those – such as international students with non-MHRA vaccines – who were previously unable to access settings subject to Certification alongside would be mitigated against. The potential legal challenge from customers who are refused entry would also be mitigated against, given the ease of access to free LFD tests across Scotland. The Equalities Impact Assessment explores these issues in fullness.

Under this option, those without vaccine status including those who have been vaccinated with a non-MHRA vaccine, would be able to gain entry to late night venues with music, alcohol and dancing, or specified indoor and outdoor live events, expanding the potential customer base and revenue opportunity.

Under the current requirement for a minimum of 2 weeks between individuals receiving their second dose of vaccine and being eligible for certification, vaccine uptake data^[fn] suggests that:

• Around 88.3% of the overall population aged 18+ had received two doses of vaccine by 24 November, and would therefore be eligible to access certification by 8^th December.
• Among younger age groups, this proportion fell to 69.5% of those aged 18-29, and 77.9% of those aged 30-39, and 87.9% of those aged 40-49.

This suggests a substantial portion of younger demographics may be unable to access certification, and would not be able to do so for several weeks. Business organisations representing nightclubs and late night hospitality settings have also provided consistent feedback of reduced footfall and revenues as a result of vaccine certification. Under this option, those unable to access certification would be able to access hospitality and events settings with a record of a negative test result, which would increase the potential eligible customer base for these businesses and reduce scope for cancellations. It would also potentially reduce the scope for larger groups to be discouraged from attending hospitality settings or events if individual members of their group were not able to access certification.

Increasing the potential customer base is important for the sectors covered by certification, as they have been significantly affected by the impact of the pandemic as a result of restrictions that have required long periods of closures and limits on their operating capacity^[fn]. Some of the hospitality businesses affected by certification are generate a substantial portion of annual turnover being generated in December^[fn], meaning that introduction of proof of a negative test result within certification arrangements may be of particular importance to reducing footfall and revenue losses in the coming weeks.

This measure may also provide a degree of additional reassurance to customers that others in affected venues will be fully vaccinated, or will have demonstrated that they have recently had a negative Covid test result. There may also benefits to affected venues and businesses should this option result in a competitive advantage for settings in scope, as they would be perceived as 'less risky' environments, owing to an absence of unvaccinated people. These may provide reassurance to previously reluctant or risk-averse customers and encourage greater attendance, with positive revenue impacts.

However, it may not fully offset the negative impacts on footfall in these settings that could stem from certification being in place. For instance, it may not address footfall lost from spontaneous decision-making if individuals have not taken a Covid test within the required timeframe. There may also be lost footfall from individuals or groups who have chosen not to take up vaccination and who choose not to take tests or share results. Individuals or groups may also continue to choose to socialize in settings where testing or certification is not required.

Individual businesses may also look to offer lateral flow devices to customers at point of entry, should they be unable to offer evidence of vaccination or a negative test result. This could potentially reduce losses in footfall, and reduce risks of anti-social behavior in settings. However, this practice is strongly discouraged by the Scottish Government in updated Guidance, which clearly states that businesses should not distribute test kits to prospective customers. The distribution of test kits must be carefully managed to meet regulatory requirements to be able to recall test kits from users in the event of a performance or safety issue with the tests. Lateral flow tests are designed to be used at room temperature, on a flat, clean, dry surface with the ability of the user to wash their hands thoroughly before use to avoid contaminating the test. Individuals should be encouraged to test before they leave home to reduce the transmission risk.

Option selected: Option 2

As part of a package of mitigation measures, such as mandatory face coverings in some settings, provision of contact details in hospitality, test and protect with support for people to self-isolate and quarantine requirements for high-risk international arrivals, Certification should ensure that only fully vaccinated individuals, or those who can provide a record of a negative test within 24 hours, or people who are exempt are present in these settings or at these events, reducing the risk of infection and severe illness leading to hospitalisation amongst the attendees. SAGE have acknowledged the potential benefits of introducing a vaccine certification scheme in conjunction with a package of other NPIs to limit contact between infected and susceptible individuals, thereby minimising the risk of infections and serious disease.

Therefore, the Scottish Government consider that, based on the current state of the pandemic, the scientific evidence and balancing the direct harm of Covid (Harm 1) with the harm on wider society and the economy (Harms 2, 3 and 4), Option 2 has been deemed proportionate to protect public health.

The expansion of the scheme to include a record of a negative test and the scope of the scheme which remains narrower than most comparator countries will be kept under review. Any further Regulatory changes would require the completion of a further Business Regulatory Impact Assessment.

Supporting implementation in line with our policy aims

Sectoral guidance: to support effective implementation consistent with our policy aim, we have provided information to the sectors where Certification is mandated on the policy and regulations, and the reasonable implementation, enforcement and handling of exemptions. This guidance can be found on the Scottish Government website here.

Ministers have been clear that Certification will not be a requirement for public services or other settings that many people have no option but to attend such as retail, public transport, health services and education. We recognise that some businesses, outside the regulated settings, are asking people for evidence they have been fully vaccinated as a condition of entry or as a condition of employment. We emphasised in our guidance that businesses which are not covered by the Government's scheme would need to consider carefully their obligations under all relevant law including data protection, the Equality Act and Human rights. For more information see the Equality and Human Rights Commission Guidance for Employers here.

Public guidance: we will also update the public guidance providing information on what Certification is, the policy objectives, where it is regulated and why, and the steps to attain Certification. Our Guidance will be clear about the settings in which use of Certification is required. It will explain that the scope of the Regulations has been carefully and deliberately limited to activities where the balance of public health risk clearly outweighs other rights considerations, and is designed to respect the rights of individuals. Specific protections have been put in place to ensure the scheme operates in a lawful manner.

Ongoing stakeholder engagement: We will continue to engage with stakeholders and gather intelligence on the impact of Certification. We will create feedback loops and build this evidence into the policy.

Exceptions: There will be exceptions for premises being used for certain purposes, including communal religious worship, un-ticketed events held at an outdoor public place with no fixed entry points and certain business events that individuals are required to attend for work purposes (not including any peripheral reception or function outside the core hours of the conference).

Review

As the regulations have been laid under the Coronavirus Act 2020 there is a requirement to review the regulations every 21 days. The Covid Vaccine Certification provisions will expire on 28 February 2022, as with all other Covid measures under the Health Protection (Coronavirus) (Requirements) (Scotland) Regulations 2021. Parliamentary approval would be required to extend them further.