One of Birmingham’s Michelin-starred chefs says his new restaurant in the city will not survive the coronavirus crisis without government support.
Aktar Islam launched Argentine steakhouse Pulperia in Brindleyplace in March but was forced to close the restaurant after just a few weeks of trading because of the lockdown.
He is now warning that up to 40 jobs are under threat there unless greater government support is offered to hospitality businesses such as his.
Mr Islam said: “We launched Pulperia to the public on March 1 with great success as we were fully booked for six weeks.
“But we were devastated by the lockdown and resulting closure, after spending nearly £1 million on renovations to the property and creating employment for 40 people.
“Sadly, we were unable to furlough the majority of the team at Pulperia as they had only joined us on February 28 so did not qualify for the Job Retention Scheme.
“We paid them their March salary from the business but were not in a position to maintain salaries so we’ve had to make redundancies.”
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Mr Islam also runs Indian restaurant Opheem, in Summer Row, which became the fifth in the city to be awarded a star by the prestigious annual guide from Michelin last year.
He has now joined the growing chorus of restaurateurs and hospitality bosses pleading with the government for greater support for a sector hit extremely hard by the continued lockdown.
The Government is currently running various support schemes including grants of either £10,000 or £25,000 for companies based in business premises in England with a rateable value of under £51,000.
But with many hospitality premises sitting above this threshold, the industry has come together to launch a new national campaign called Raise The Bar.
It is calling on the Government to increase the cut off for qualification for the grants to premises with a rateable value of up to £150,000.
Pulperia has a rateable value of £133,000 and Mr Islam says it is difficult for such a young business to secure other commercial loans.
He added: “We were simply unable to trade long enough to build cash reserves and so what remains of the business is currently being supported by directors’ loans and intercompany loans from my other businesses.
“But it must be understood that this process then puts undue strain on these other businesses and it’s not something that is sustainable for much longer.
“We have discussed the possibilities of a loan with our bank manager but have been told they will not be able to support us and so we’re trying other banks. Hospitality plays a big part in our culture.
“Not only does it create more jobs for every pound generated in sales compared to any other business but it also gives the city personality and adds value to spaces that would otherwise be left unoccupied.
“We are faced with a time where it’s possible restaurants could potentially be a thing of the past and, without immediate decisive action, this really could become reality.”
Another Birmingham venue backing the Raise The Bar initiative is family-run Asian restaurant Vietnamese Street Kitchen which opened two years ago, also in Brindleyplace.
The venue, whose rateable value sits just above the threshold at £54,000, is currently closed to dine-in guests and is running an online delivery service instead which has massively hit trade.
General manager Oliver Ngo said that five of his eight staff had been furloughed and the business faced closure “within weeks” unless it was able to access more financial assistance.
“Our main trade is office lunch diners and since lockdown that has died completely,” he said.
“Without a government grant or loan, we won’t be able to survive for long. We are doing what we can to try and support our employees, their families and the local business and community.
“But I’m not sure without help how long we can go. We need some kind of grant as we don’t qualify for any loans at this moment in time.”
Similar calls for the threshold to be increased were expressed last month by hospitality businesses in the Southside district of Birmingham city centre where research found that one in five were in premises above the £51,000 benchmark.
There has so far been no indication from the Government that the rateable value threshold will be changed in the wake of this new campaign.
A spokesman for HM Treasury said new funding had been assigned this month to local authorities such as Birmingham City Council which allowed them to distribute grants to small businesses on a discretionary basis.
The Treasury has previously said: “We’ve taken action at unprecedented speed to help businesses, jobs and our economy during this crisis, with hundreds of thousands of firms across the country benefiting from our wide package of support.
“The Chancellor has been clear that we will do whatever it takes to keep businesses operating and people in work.
“This includes the Coronavirus Business Interruption Loan Scheme, business rates holidays, tax deferrals and our job retention scheme.”