Coronavirus (COVID-19) Strategic Framework update February 2022: business and regulatory impact assessment

Scottish firms impact test

The Strategic Framework Update impacts Scottish firms across the sectors listed below, but should not impact the operations of Scottish firms in these sectors with operations outside Scotland.

Workplaces

Supporting staff to work from home will have an impact on firms. The necessary IT infrastructure for hybrid working will add to costs, as will ongoing support. However, as each business will have different requirements and implement hybrid working in their own way, we cannot quantify exactly what the costs will be. There is also potential for some savings if businesses reduce their estates/ office space.

Other adaptations may also have costs for businesses. This may include changes to mechanical ventilation, enhanced cleaning procedures, or provision of face coverings/ hand sanitiser.

While we do not have details on the specific costs of hybrid working or other adaptations, we are aware that many businesses have already made the changes.

It is too early to fully assess the impact of hybrid working across the economy as the move to hybrid working only started on 31 January 2022, although we have been encouraging or requiring working from home (where possible) for a longer period of time. Nonetheless, through our engagement to date, we understand that businesses have invested in the necessary infrastructure and support to implement hybrid working models, and additional adaptations, since the pandemic began. We understand that the cost of implementing an effective and productive way of hybrid working may be significant, and for some businesses, unfeasible. Through engagement with the business sector we will gather feedback and evidence on the costs and benefits of implementing hybrid working

We will explore the current and emerging evidence base including research and comparators with UK and the devolved administrations to learn lessons to inform our considerations including impact on productivity. To note some early findings from CIPD^[22] found that 63% of participants in our employer survey said that they planned to introduce or expand the use of hybrid working to some degree, combining time in the workplace with time at home, depending on the needs of the job, the individual and the team, and the team working practices.

The Scottish Government will work with businesses and organisations, through the working group on hybrid working, to learn from examples of hybrid working and fully assess the wider impact of hybrid working over the coming months

In addition to direct costs of hybrid working, a reduction of people working in city centre offices will also have an impact on other sectors (e.g. retail) which is covered in the relevant sections.

The case for flexible and hybrid working

Flexible working policies that balance the needs of businesses and service providers and their staff have been found to raise loyalty, motivation and business productivity as people experience an improved work-life balance. We need to continue encouraging employers to open more vacancies to flexible work at the point of hire, and to support parents and carers into better flexible work.

On 25 January 2022, the First Minister’s statement set out recommendations that, from 31 January, employers should consider implementing hybrid working where possible. This represents a change in approach from working from home where possible as the default position earlier in the pandemic. The First Minister made clear that this should not signal a wholesale return to places of work, recognising that homeworking still remains one of the most effective protections against COVID-19 and for maintaining business resilience. The Scottish Government published updated guidance effective from 31 January 2021 to support business considerations around hybrid working.

Work carried out last year considered principles which should be implemented in a phased return to offices. These principles are still relevant when considering moves to hybrid working including over the longer-term. They are:

• the health and safety of employees, customers and service users remains a priority for businesses
• businesses should work with employees and workforce representatives (where applicable and appropriate this may be the trade unions) to consider flexible and hybrid working arrangements in their own contexts
• a phased and co-ordinated approach should be considered to support the introduction or reintroduction of hybrid and flexible working to support employee wellbeing and economic recovery
• a wide variety of models of working should continue to be promoted where appropriate with businesses considering the unique situation for their staff e.g. hybrid models of office based and home working

The Scottish Government plans to establish a working group with business and third sector organisations, employee representatives and sectoral leads in line with the Principles agreement to understand and explore the impacts of hybrid working on business, the wider economy and on individuals.

Events industry

The events sector in Scotland has been particularly hit hard by the pandemic. The Scottish Government remains committed to supporting the recovery of the sector, including building public confidence to return to the full range of business, sporting, and cultural events. £21.8m of funding has been specifically allocated to Events, to support businesses that were impacted by the COVID-19 restrictions put in place in December 2021.

Much of the sector has been required to enforce COVID-19 status certification checks, and they are also implementing other measures such as facemask enforcement, additional cleaning and strong encouragement to customers to test before attending.

The industry association "2020 UK Events Report" reported direct spend of £70 billion in the events sector in the UK in 2019. VisitScotland has estimated 9% of the UK total can be attributed to Scotland, representing £6 billion of direct spend to the Scottish economy and also accounting for approximately half of the country's total visitor spend.

Based on the Annual Business Survey 2018, the events industry had an estimated turnover of £1,927 m in 2018 (0.8% of Scotland's non-financial business economy turnover in 2018) and an estimated Gross Value Added (GVA) of £978 m in 2018 (1.0% of Scotland's non-financial business economy GVA in 2018). The local authority areas contributing most to total GVA within the events sector in 2018 were Glasgow City (17%), City of Edinburgh (15%) and Fife (9%).

Only around 17% of events businesses have a turnover of £500,000 or more. Approximately 1,265 had a turnover of less than £100,000. Of the 655 businesses operating with a turnover of £500,000 or more, 120 (14%) were present in Edinburgh and 85 (12%) in Glasgow. The figure is 7% for Fife, 7% for Highland and 5% in South Lanarkshire (Inter-Departmental Business Register (IDBR) 2020).

The Business Register and Employment Survey 2019 indicates that, overall, more than 50% of employees in the sector work part-time (54,000 employees, of which 25,000 are full-time).

The 2020 and 2019 IDBR Business Register and Employment Surveys estimated that there were 3,785 events industry businesses in Scotland, including event catering businesses, performing arts, activities of sports clubs and activities of exhibition and fair organisers^[23]. These businesses operate across 4,625 sites. We currently have no specific data on supply chains for these businesses. It is likely that most of these are based in cities and larger towns although it is not possible to obtain detailed data at this time.

Approximately 6,300 (11.1%) of workers in the events industry were self-employed. This is a slightly lower proportion than for the workforce as a whole (12.4%). The proportion of women working in the events industry is similar to the proportion in the overall workforce – 46.6% and 48.8% respectively. However, for events catering activities, women make up 55.4% of the workforce and for Other Reservation Service and Related Activities they make up 72.9% of the workforce.

Feedback from events sector

We have had several discussions with events stakeholders on what they would like to see in the revised Framework, what is currently causing them uncertainty in their business planning, and what mitigations they are already implementing in their business.

The main points reflected in detailed feedback and discussions were:

• Clear messaging regarding opening up of the economy and confidence that events/culture and similar venues are safe
• Clarity on funding available if further restrictions are introduced
• Clear set of triggers for further restrictions to be imposed
• A four nations approach
• Clear guidance on ventilation and air quality, and proper funding support for adaptions
• Consistency in regulations and guidelines across similar settings, particularly when they are within the same venue (e.g. 1m distancing applying to hospitality/bars etc and 2m relating to circulation and event attendance cannot work)

Culture

The Scottish Government acknowledges that culture has been one of the worst hit sectors by the COVID-1919 pandemic. The Scottish Government announced funding of £65m for the culture and events sectors to support them as a result of these new restrictions, including £31.5m for cultural businesses, organisations, venues and independent cinema support and grassroots venues and £19.8m for the events sector. Museums and galleries, and other heritage attraction, which have also been required to ensure physical distancing is in place, and therefore impacting on visitor numbers, have been allocated £1.7m (although the winter months are traditionally a time of year due to a lack of tourists when some museums and other similar attractions offer either reduced opening hours or are closed).^[24] A further £16m of support for culture and events was announced in February.

1) Cinema

There are 71 fixed sites screening first-run film in Scotland run by 38 organisations (31 multiplex sites and 4 independent chain sites run by 8 operators, 36 independent venues run by 30 operators). Additionally, there are 2 touring cinema operators who screen first-run films. One is Screen Machine which physically tours, the other is INDY Cinema Group which has a number of sites. They are difficult to categorise given their unique set-ups. There are also a number of smaller venues that are screening occasionally, off-date and/or older films, which aren't included here.

There are currently 1,530 employees working in film exhibition in Scotland, based on Office for National Statistics and BFI methodology; however this figure is slightly low as it removes multi-arts venues and misses organisations that aren't registered under the specific tax code for cinemas.

There are 36 independent venues in Scotland, run by 30 operators; these are all registered in Scotland. Other cinemas in Scotland are part of chains. Independent of restrictions, several chains made the decision to close temporarily – this was due to a combination of reduced capacities because of physical distancing and the postponement of several key releases. According to BRES 2020 and IDBR 2021 there are 30 businesses operating across 65 sites in the motion picture projection activities sector in Scotland employing approximately 2,000 people.

Motion projection activities sector

Sector	Employment (2020)	Number of Businesses (2021)	Number of Business Sites (2021)
Motion picture projection activities (SIC 5914)	2,000	30	65

Source: Business Register and Employment Survey; IDBR.

2) Theatres and music venues

Based on the data we have available, which is dependent on how businesses are registered, there are 590 registered businesses in the performing arts, support activities for performing arts and operation of arts facilities (IDBR 2021). Around 570 of these are classified as small businesses with 49 employees or less. These 590 businesses employ 4,400 people^[25]. It should be noted that there is also a high proportion of freelancers/self-employed working in the sector that may not be picked up by the Business Register and Employment Survey.

Activities of theatres and music venues sub-sectors

Sector	Employment (2020)	Number of Businesses (2021)	Number of Business Sites (2021)
Performing arts (SIC 9001)	2,500	380	390
Support activities to performing arts (SIC 9002)	400	140	145
Operation of arts facilities (SIC 9004)	1,500	70	85

Source: Business Register and Employment Survey; IDBR.

3) Indoor visitor attractions and museums

Many visitor attractions, particularly those outwith the main urban areas are either closed or have reduced opening hours over the winter months (tourism in Scotland still experiences significant seasonality, with Easter-October being the main operating period for visitor attractions).

It is not currently possible to indicate the full extent to which individual visitor attractions that would be impacted by the regulations, given that only the indoor parts of the business site would be affected. For example, the majority of zoos and country garden estates will be outside, however there may be some parts of these establishments that are indoors.

Indoor Attractions

Sector	Employment (2020)	Number of Businesses (2021)	Number of Business Sites (2021)
Museums activities	4,000	100	155
Distilleries	8,000	215	320
Operation of historical sites and buildings and similar visitor attractions	2,250	60	135
Botanical and zoological gardens and nature reserve activities	2,000	40	95
Tour operator activities	1,000	195	225
Activities of tourist guides	125	50	55

Source: Business Register and Employment Survey; IDBR.

It is estimated that there are 100 registered businesses operating in the museums and galleries sub-sector, at 155 sites. The sector ranges from large national institutions employing hundreds of staff to small volunteer-run museums.

The operation of historical sites and buildings sub-sector includes the operation of 60 businesses across 135 sites and employs in the region of 2,250 people. This sector includes major tourist attractions in the central belt such as Edinburgh Castle, Stirling Castle and the Falkirk Wheel to much smaller sites of historical and cultural significance in more rural areas.

There are 215 registered distillery businesses operating in Scotland. The majority of those produce whiskey but some have a focus on gin. Distilleries are particularly popular with tourists and there are a number of tour operators who run specialist trips to distilleries (often visiting multiple distilleries within a single day). Many of Scotland’s distilleries also have a visitor centre with gift shops and provide tours and demonstrations for visitors. Some distilleries also have bars and cafes. Given the range of activities undertaken at distilleries we do not have specific data on the number of people employed within visitor attractions at distilleries. Distilleries are heavily geographically concentrated in the Highlands and Islands and are important to the rural economy.

The sub-sector relating to botanical and zoological gardens and nature reserves also includes gardens, estates and country parks. Estimates suggest that there are 40 businesses operating within this sector, employing around 2,000 people. This category includes Edinburgh Zoo, the Highland Wildlife Park and Blair Drummond Safari and Adventure Park. Visit Scotland state there are over 400 gardens, woodlands and plant nurseries to visit in Scotland. Many of these will include both indoor and outdoor spaces. Visitor attractions range in scale from the 4 botanical gardens (at Benmore, Dawyck, Logan and Edinburgh) and National Trust gardens to much smaller gardens and country parks. This sub-sector draws heavily on the skills, experience and enthusiasm of volunteers.

It is estimated that there are around 1,125 people working within the tour operator and tourist guide sub-sector of visitor attractions. The majority of these people are employed within tour operator related activities. This sub-sector comprises around 245 separate business operating over a large number of sites. This sub-sector is heavily dependent on international tourism. This sector includes a diverse range of activity from walking and cycling tours to bus tours and boat trips.

4) Casino & bingo halls

The information we have for casinos comes from the Betting and Gaming Council who collect such data for the purposes of industry representation and the requirements of gambling licensing. They estimate there are 11 casinos in Scotland, employing 770 people across Glasgow, Edinburgh, Aberdeen and Dundee.

The information we have for bingo halls comes from the Bingo Association who collect such data for the purposes of industry representation and the requirements of gambling licensing. They estimate that there are 45 licensed bingo clubs in Scotland, employing 1,100 people. The clubs are operated by 8 companies in Scotland, of whom 5 operate only in Scotland.

Feedback from culture sector

We engaged directly with the culture sector on what they would like to see in a revised strategic framework, what is causing uncertainty or impacting future planning, adaptations and mitigations already in place and the material impact of these adaptations.

Stakeholders responded that they would like to see the following:

• a differentiation between guidance and legally binding measures,
• a longer term sense of how society will live with COVID-19
• clear messaging regarding opening up of the economy.
• Robust contingency models that are tried and tested to deal with potential restrictions
• Clarity on funding available if further restrictions are introduced
• Clear set of triggers for further restrictions to be imposed
• A four nations approach.

In terms of mitigations already in place most mentioned additional cleaning, face coverings, ventilation and vaccine certification.

Weddings

Scotland has a strong wedding industry. The number of marriages taking place fell during the pandemic. The publication Vital Events Reference Tables 2020^[26] published by National Records of Scotland (NRS) notes in section 7 that there were 11,831 marriages in 2020. In comparison, the equivalent publication in 2019^[27] noted that there were 26,007 marriages in 2019. More recent figures published by NRS^[28] shows that the number of marriages in Scotland have almost returned to pre-pandemic numbers. There were 10,540 marriages in quarter 3 of 2021, only 1% fewer than the quarter 3 average for 2015 - 2019.

The Scottish Government is aware, from discussions with marriage celebrants, registrars and the wedding industry that a number of the weddings taking place now were postponed as a consequence of the pandemic.

The average cost of a wedding in Scotland in 2017 was reported to be £19,791^[29]. Based on the number of marriages in 2019, and assuming the average spend remained the same, this suggests the wedding industry is worth around £500 m a year.

Funerals

The number of deaths in Scotland increased during the pandemic.

The publication Vital Events Reference Tables 2020^[30] published by National Records of Scotland (NRS) notes that there were 64,093 deaths in Scotland in 2020, compared with 58,108 in 2019^[31] and 58,503 in 2018^[32].

While there is no data available on the number of funerals that take place in Scotland each year, it can reasonably be assumed that funerals were held in Scotland for a significant proportion of those who died in Scotland.

The 2022 SunLife Cost of Dying Report^[33] provides useful insight into the impact of funeral restrictions on both the general public and on funeral sector businesses. he Report suggests that the average cost of a funeral in Scotland in 2021 was £3,873, a drop of 4.7% since 2020^[34], though such fluctuations in price are likely not entirely attributable to the pandemic.

The Report notes that in 2020 and 2021, funeral services changed due to the pandemic. It reports that 85% of those surveyed who organised a funeral between February 2020 and July 2021 said it was affected by COVID-19 and social distancing measures. 53% said the funeral they organised was affected a lot by the pandemic. When sector members and organisations were asked by officials about the challenges of pandemic on funerals, restrictions on attendance and requirements for physical distancing and the wearing of face coverings were noted as being particularly difficult for both employees and attendees, given the people-centric nature of the work.

Other particular areas of note are the reported increase in the number of direct cremations which took place during the pandemic and advances in technology. Direct cremations are cremations which take place without a funeral service and are therefore the most affordable funeral option. The report notes that, due to COVID-19 restrictions in 2021, this type of funeral became a more popular option. Of those surveyed who organised a funeral between February 2020 and July 2021, 24% described the funeral as a direct cremation which is 6% more than the national average during the last four years.^[35]

Where funeral services were held, new technology trends emerged. For example, 90% of funeral directors surveyed say they saw new trends such as the use of web links, apps and video to record and stream funeral services emerge in 2021.^[36] Some members of the funeral sector also noted that new training for staff focusing on resiliency and wellbeing had been introduced and that they would look to keep such training in place beyond the pandemic.

Feedback was consistently sought from funeral sector stakeholders throughout the pandemic, to attain information on how the pandemic impacted funeral director businesses and burial or cremation authorities. Feedback suggested that funeral director firms and other authorities in this market were holding at least similar numbers, if not more, funerals than in previous years, based on feedback about how busy stakeholders were. This was not surprising, given the increase in deaths in Scotland.

Further, it appeared that restrictions which impacted funerals (e.g. attendance numbers, face covering requirements, etc.) did not impact on the number of funerals being arranged and conducted by funeral directors (although it is acknowledged that these restrictions did impact the manner in which funerals were conducted as well as experienced by bereaved families).

Retail

The retail sector is of enormous social and economic importance to Scotland. It is Scotland’s largest private employer, employing over 240,000 people, and contributed £5.8 billion in GVA to the Scottish economy in 2018. There are almost 14,000 retail businesses, across every part of Scotland. They are often the cornerstone of our communities, particularly in rural areas.

Women are 60.5% of the retail workforce and young people 26% (compared to 12.3% of workforce as a whole). Additionally, 63.1% of employees within retail work part time compared to 34.0% of the total employee population.

We engaged directly with the retail and close contact on what they would like to see in a revised strategic framework, what adaptations and mitigations already in place they would continue with and the material impact of these adaptations.

Stakeholders responded that they would like to see a consistent plan based on trusting employers and supporting them by providing them with sufficient notice to make adaptations, avoiding chopping and changing and aligning across the four nations.

Existing guidance sets out mandatory requirements, including carrying out regular risk assessments, as well as the range of good practice protection measures retailers should consider to keep staff and customers as safe as possible. The requirement for enhanced mitigation measures has operational implications and additional cost for businesses, including supplying face coverings and hand sanitiser and elevated cleaning. Retailers have already incurred the financial cost of commissioning, buying and installing new signage for physical distancing, floor markings etc. as a result of the December announcements. Additionally, retailers have already invested and continue to invest in the technology and equipment to enable increased numbers of their staff to work at home.

Early feedback on what adaptations retailers will retain, if the current requirements to take measures as are reasonably practicable to minimise the incidence and spread of coronavirus on the premises are lifted, include:

• supplying face coverings to staff,
• retaining hand sanitiser for customers and staff
• keeping signage at the entrance about being considerate to fellow customers and staff
• elevated levels of cleaning of frequent touchpoints in stores
• continuing with a hybrid approach to home working for support/office staff

Scotland’s retail industry has been impacted by measures since the start of the pandemic, particularly the ongoing work from home policy, as a result Scottish Retail Consortium (SRC) estimates shops in Scotland have missed out on £5.8 billion of retail sales during the past two years of the COVID-19 pandemic. Businesses in large towns or city centres and which have experienced the greatest drop in footfall could be particularly impacted if there is a return to work from home measures.

Close-Contact Services

BRES and APS data from 2018, 2019 and 2020 suggests there are just over 18,000 close contact businesses in Scotland. Women made up 80.7% of the personal services workforce in 2019 and 36.6% people working in the other service activities sector work part time compared to 26.4% of the population. (Source: Annual Population Survey Jan-Dec 2019)

Stakeholders responded that they would like to see a measured approach, aligned across the four nations that lets businesses plan, including for seasonal issues, and is easy for the public to follow. The close contact service providers feel the Scottish Government approach to masks is reducing customers wellbeing when they receive services therefore discouraging attendance and educing revenue They do think the adaptations that have less impact on ‘client experience’, such as enhanced cleaning practices, better record keeping and increased mask wearing for practitioners, will be retained.

Sports

We recognise that restrictions which were necessary as a result of the pandemic placed a significant burden on the sport and physical activity sector and on the financial viability of businesses. We have provided substantial financial assistance to the sector during this period as part of the more than £4.4bn in support from the Scottish Government to businesses overall.

Through sportscotland, we will continue to work closely with the sector in future to refine guidance based on the current position, providing clarity on what is expected of the sport sector under each alert level so they can plan effectively. We will work in partnership with the sector to provide more information on actions which may help sporting organisations to adapt to the presence of COVID-19

Food Standards Scotland

Rules relating to the take away and food to go sector have remained relatively unchanged since the lifting of most restrictions under the COVID-19 Protection Levels Framework during the course of 2021. Food Standard Scotland’s guidance on COVID-19 for food businesses was first published in April 2020, but now refers businesses to the general guidance as issued by Scottish Government: Coronavirus (COVID-19): safer businesses and workplaces - gov.scot (www.gov.scot).

As with other food businesses, takeaway and food to go premises, such as drive thrus, are required by the guidance to take reasonable measures to minimise the incidence and spread of coronavirus. This includes wearing a face covering, and other mitigations that may be needed such as:

• changing the layout of premises including the location of furniture and workstations to maximise physical distancing
• controlling the use of entrances, passageways, stairs and lifts
• controlling the use of shared facilities such as toilets and kitchens
• installing barriers or screens
• providing personal protective equipment
• providing information on minimisation of transmission risk to those working in or visiting the workplace

As the February 2022 update to the Strategic Framework places no new mitigations or relaxations on this sector, given current levels of risk, no new impacts are expected.

The impact on the hospitality sector more generally has been considered separately.

FSS has however undertaken monitoring of the out of home (OOH ) sector of consumer habits and impacts over the course of the pandemic. In September 2021 FSS published a report making comparisons with data for 2019 to allow us to explore how our OOH eating behaviours have changed. To note, this data encompasses all OOH food businesses and not just takeaway and food to go.

This report, which can be found here. found that:

• the value of the total out of home market in Scotland was £3 billion in 2020, a reduction of 36% compared to 2019.
• Takeaways grew to a market value of £1.1 billion, a 31% increase compared to 2019, with an additional 21m trips.
• Scotland saw a huge rise in ordering takeaways from restaurant apps and other third party apps (such as Just Eat) in 2020, compared to 2019.
• 1.2m new consumers (an increase of 54%) used delivery services in Scotland in 2020 compared to 2019.

Hospitality

The hospitality sector is a very important part of Scotland’s economy and society. The sector directly employs 136,500 people in Scotland across 8,715 businesses^[37]. The hospitality sector has some particular features summarised below:

• Some local authorities (such as Argyll & Bute, Perth & Kinross and Highland) are disproportionately dependent on the hospitality sector.
• Women are more likely than men to work in the accommodation and food sector industry. Women constitute 53.7% of the accommodation and food sector workforce^[38].
• A large proportion of the workforce are young people: 33.0% of the accommodation and food services sector workforce is aged 16-24 compared to 11.1% of the workforce as a whole.
• More than half (54%) of employees working within hospitality work part time. This is particularly pronounced in relation to public houses and bars where nearly two thirds of employees work part time^[39].
• The industry sector with the highest proportion of non-UK nationals in the workforce is accommodation and food services – 19.0 per cent of its workforce are non-UK nationals.
• Hospitality is an important sector across Scotland, offering an important share of employment in both rural and urban areas. The sector accounts for 5.4% of total employment in Scotland^[40].
• The sector also supports many jobs indirectly through its diverse supply chain.

The sector is therefore an important contributor to Scotland’s economic performance, and to economic opportunities for young people and those entering the labour market.

The measures within the regulations may impact disproportionately on small businesses who may experience cash-flow problems as a result of any further tightening of restrictions.

Table 1 below shows a Scotland-level disaggregation of characteristics of areas of the Accommodation and Food Services sector that may be affected by the measures discussed in this BRIA including estimates of employment, number of businesses and business sites and number of premises.

Table 1: Breakdown of the Scottish hospitality sector by business sector

Sector	Employment (2020)	Number of Businesses (2021)	Number of Business Sites (2021)
Hotels and Similar Accommodation (SIC 551)	41,000	1,655	1,985
Licensed restaurants (SIC 56101)	36,000	2,360	2,760
Unlicensed restaurants and cafes (SIC 56102)	29,000	2,125	2,725
Licensed clubs (SIC 56301)	4,500	490	515
Public houses and bars (SIC 56302)	26,000	2,085	2,600
Total	136,500	8,715	10,585

Source: Business Register and Employment Survey; IDBR.

The hospitality sector has been significantly adversely affected by COVID-19, and the necessary measures implemented to reduce and restrict the prevalence of the virus. For instance:

• The Scottish Government’s Monthly GDP statistics for October 2021 show Accommodation and Food as 6.9% lower than in February 2020 prior to the pandemic, compared with 0.4% lower for the economy overall^[41].
• The Scottish Government’s analysis of ONS’s BICS statistics for Scotland includes information on the impact of COVID-19 on the Accommodation and Food Sector^[42]. Key points include:
  • In the period 29 November to 12 December 2021, 49% of businesses in the Accommodation & Food Services sector reported experiencing a decrease in turnover compared with what is normally expected for this time of year. The comparable proportions for the economy overall is 25%.
  • 42% of businesses in the Accommodation & Food Services sector reported that they were experiencing a shortage of workers in the period 15 to 28 November 2021, compared with 38% for the economy overall.
  • 15% of businesses in the Accommodation & Food Services sector reported having no or less than 3 months cashflow in the period 29 November to 12 December 2021, compared with 21% for the economy overall.

As well as its important economic contribution, hospitality settings provide important settings for friends and families to socialise, reducing the risk of isolation and loneliness. This will be particularly important as we enter the winter months. There are hospitality businesses across the country, providing important services to their communities.

The Scottish Government recognises that the industry has worked exceptionally hard since the start of the pandemic to adapt their businesses, to advise Government on alternative workable restrictions, and to support their communities.

However, hospitality venues fulfil many of the high-risk criteria for COVID-19 transmission, as transmission of the virus is most strongly associated with close and prolonged contact in indoor environments. The highest risks of transmission are in crowded spaces over extended periods.^[43] This has formed the basis for consideration of further measures in recent weeks, including around hospitality settings, in response to the recent increases in COVID-19 cases and transmission experienced across Scotland.

Table 2, below, sets out the number of occupied premises by local authority broken down by public houses and clubs, restaurants, hotels and cafes.

Table 2: Number of Occupied Premises by Local Authority

Local Authority	Public Houses and Clubs	Restaurants	Hotels	Cafes
Aberdeen City	194	145	267	110
Aberdeenshire	201	72	144	90
Angus	151	58	36	45
Argyll and Bute	145	106	163	70
City of Edinburgh	596	599	194	410
Clackmannanshire	55	9	9	15
Dumfries and Galloway	229	25	138	100
Dundee City	197	86	32	65
East Ayrshire	177	37	18	45
East Dunbartonshire	73	37	6	40
East Lothian	118	46	28	45
East Renfrewshire	54	36	4	25
Falkirk	126	41	32	55
Fife	392	125	98	130
Glasgow City	638	524	84	425
Highland	276	174	361	175
Inverclyde	95	31	3	25
Midlothian	81	32	13	30
Moray	113	39	91	45
Na h-Eileanan Siar	19	12	26	20
North Ayrshire	175	63	32	55
North Lanarkshire	256	63	24	105
Orkney Islands	43	11	36	10
Perth and Kinross	184	89	123	85
Renfrewshire	180	103	18	65
Scottish Borders	158	50	77	65
Shetland Islands	35	14	19	15
South Ayrshire	161	55	47	55
South Lanarkshire	245	143	36	120
Stirling	117	70	81	70
West Dunbartonshire	82	35	15	40
West Lothian	132	64	28	65
Scotland	5,698	2,994	2,283	2,725

Source: IDBR 2021, NDR valuation roll (October 2021)

Accommodation

The accommodation sector is a very important part of Scotland’s economy and society, forming an important part of the broader tourism industry in both rural and urban areas. It is estimated that the sector in Scotland comprises 2,850 registered enterprises and accounts for 48,000 jobs broken down as follows^[44]:

• 1,655 Hotel and similar accommodation businesses in Scotland, supporting around 41,000 jobs.
• 145 Holiday centres and villages, around 1,250 jobs.
• 25 Youth hostels, supporting 300 jobs.
• 675 Other holiday and other short-stay accommodation (not including holiday centres and villages or youth hostels) supporting 2,250 jobs.
• 260 Camping grounds, recreational vehicle parks and trailer parks supporting 2,500 jobs.
• 85 Other accommodation supporting 800 jobs.

Within the sector across Scotland, it is estimated that there are around 2,300 business premises classed as hotels; around 1,500 premises classed as B&Bs; and over 18,000 premises classed as self-catering premises.^[45] However, self-catering accommodation is unlikely to fall within scope of these restrictions.

The supply chains will also be negatively affected by restrictions. This includes retailers and wholesalers of food and drink, service providers to accommodation premises (e.g. laundry services, cleaning services) and other related suppliers in the wider supply chain include pet boarding, outside catering. There may also be impacts on businesses and communities that benefit from expenditure by those staying in commercial accommodation (e.g. car hire, hospitality premises, visitor attractions and experience providers, and retailers).

Late night venues with music, alcohol and dancing

It is estimated, based on the Inter-Departmental Business Register 2021 and 2020 Business Register and Employment Survey (BRES), that there are 130 businesses under the heading non-charity licensed clubs. Nightclubs and sexual entertainment^[46] businesses in Scotland fall under this classification. These businesses operate across 150 sites (as some businesses may have more than one site) and are estimated to employ around 1,500 people. Over half (56%) of employees working in the sector work part time. It is not possible to separate out sexual entertainment venues from this, though it is understood less than 20 operate in Scotland as of 2015. The vast majority of nightclub and sexual entertainment businesses are small (employing less than 50 people). We currently have no specific data on supply chains for these businesses. It is likely that most of these are based in cities and larger towns although it is not possible to obtain detailed data at this time.

Late Night Venues – Hybrid Venues

There are potentially premises that might be classed as pubs or restaurants in official statistics that could fall within scope of the Regulations. Stakeholder estimates suggest that there may be around 300 - 400 premises across Scotland that operate as ‘hybrid’ venues (e.g. as pubs or restaurants during the day, and late night venues with music, alcohol and dancing at night). Stakeholders have also suggested there may potentially be up to 1,500 premises that may operate with some of the late night venues with music, alcohol and dancing characteristics (e.g. late opening, dancefloors, loud music).^[47]