REPORT FROM THE U.K.—In its first round of grants, worth up to £440 million (US$717.86 million), the United Kingdom government’s Regional Growth Fund ignored a funding request for British tourism promotion in what’s being described by the British Hospitality Association as “a lost opportunity” to boost tourism and create jobs.
The discretionary £1.4-billion (US$2.28-billion) fund was set up to operate for three years, 2011 to 2014, to stimulate enterprise by providing support for projects and programmes with significant potential for creating long-term, private sector-led economic growth and employment.
Ufi Ibrahim, the BHA’s chief executive, said the decision to refuse the bid for funding for domestic tourism promotion by the official England tourism board, VisitEngland, was very disappointing.
“The RGF’s decision to refuse the £29-million (US$47.28-million) bid gets the industry nowhere—even though tourism has received specific support from the prime minister who has described it as one of the five ‘big ticket’ industries of the future and the chancellor of the exchequer who said tourism was a key industry in the government’s Plan for Growth”.
She added: “BHA’s own research shows that the hospitality industry has the potential to create 236,000 new and additional jobs by 2015, and VisitEngland’s bid, if successful, would have helped us reach that target. We are very disappointed.
“The failure of the fund to recognize the VisitEngland bid ignores the prime minister’s promise in the government’s own Tourism Strategy to take tourism ‘to a whole new level’”, Ibrahim said.
Adding to the rejection of this bid is the abolition of Regional Development Agencies, to be in place by March 2012 at the latest, removing £60 million (US$97.81 million) of annual tourism funding. This will no doubt be further compounded by local authority cuts and significant reductions in the VisitBritain and VisitEngland budgets.
Needs go ignored
When forming the Economy Partnership with the coalition government in October 2010, the BHA was optimistic the government was going to address key points laid out by the partnership including actively supporting VisitEngland and others to ensure that the importance of hospitality was not lost in government transformations.
Another of the partnership’s main objectives was that Britain should grow the contribution spent by Britons in Britain on hospitality and tourism from 36% to 50%. With VisitEngland’s rejected bid for the fund directly focusing on the promotion of domestic tourism, the BHA sees it as a significant blow perhaps indicating that other points of the proposal, including investment in new hotel products and facilities to be stimulated through a change in legislation and the rethinking of the comparatively uncompetitive 20% value-added tax addition on hotel accommodation, restaurant meals and visitor attractions, also will go ignored.
The BHA subsequently has written to both the prime minister and the tourism minister, John Penrose MP, who was at October’s launch of the BHA’s Economy Partnership, to protest the evident lack of interest in tourism by the Regional Growth Fund.
The establishment of the Local Enterprise Partnership Network—locally-owned partnerships between business and civic leaders to decide local economic priorities with the aim to help drive growth and job creation—might help to address issues on a local level. However, the BHA say further clarity is still needed from LEPs as “there appears to be a lack of tourism representation on many of the LEP Boards”, Ibrahim said.
She added the BHA was hopeful VisitEngland’s bid would be successful in the next round of RGF funding. “But all the time, we are losing time and momentum”.
Main points of the Economy Partnership proposal (and current state of address):
• Improved government relations with the hospitality industry. Work in progress—the government has issued its tourism strategy, which is a step forward.
• Long-term future for tourist boards and more cohesion between the boards across the U.K. Work in progress—VisitEngland now hampered by RGF decision.
• Local Enterprise Partnerships (now replacing Regional Development Agencies) to embrace hospitality and tourism as a key pillar of their local economies without losing existing tourism budgets. Work in progress—BHA is very keen for tourism representatives to be on LEPs.
• The inauguration of a joint government/BHA study on the impact of VAT (other EU countries have a reduced rate compared to the U.K.’s 20% on hotels and attractions). Delayed—the BHA thinks that now is not the time to press this case.
• Seeking to minimise the regulatory burden on the sector. Work in progress—conservative enterprise adviser Lord Young has set this in motion and the BHA is discussing this with government.
• Easing existing visitor visa application procedure. Work in progress—some forms now in local languages.
• Investment in new hotel products and facilities within REITs framework. No change as yet
• Training border staff. In discussion
• Creating a Hospitality Service Academy to tackle long-term unemployment. Work in progress—there is a Hospitality Skills Academy and the BHA has been heartened by government support of apprenticeships
• Scrap plans to introduce a permanent cap on migration of Tier 2 workers from outside the European Economic Area. Denied—government has gone ahead with these plans and now very few (if any) ethnic chefs will be allowed into the Economic Area.
• Continue to work to address health and well being. Success—the BHA about to publish their response to the government’s Responsibility Deal on which the industry has made much progress.
• Making sustainability one of the key priorities. Work in progress.
• A greater balance of comparison between private and public sector bids for outsourcing of food-service and general-facilities management. In discussion—no progress yet.
