By Scott Wright

THOUSANDS of businesses in the Scottish night-time economy will be condemned to bankruptcy without a clear route map to reopening and the continuation of government funding, it has been warned.

The prospect of the sector, which spans nightclubs, live music venues, freelance workers and firms in its supply chain, facing “Armageddon” has been hammered home in a letter to First Minister Nicola Sturgeon from the Night Time Industries Association (NITA) Scotland Commission.

The letter, which is signed by leading figures in the Scottish late-night industry, warns Ms Sturgeon that the industry is “drowning in a sea of debt.” It calls on the Scottish Government to address the fact that financial support will end in April before coronavirus restrictions are lifted and social distancing remains in place.

The letter states that most businesses will not be able to trade sustainably or viably while social distancing and other trading restrictions remain in place, and that government financial support measures are not sufficient to prevent many businesses falling into significant debt.

And it criticises ministers for not providing a route map signalling reopening dates for nightclubs and entertainment-led, late-night venues.

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The letter states: “The logical outcome of the above combination is simple and stark. Without either a clear path to unrestricted opening, or extended and enhanced financial support, the Scottish Government is condemning thousands of businesses in our sector, most of them SMEs carefully nurtured over years, to bankruptcy with all the human, economic, cultural and social consequences that entails.

"Our sector and the people we employ deserve better than the fate that currently awaits them. We stand ready to work with you to avoid our sector’s Armageddon.”

The letter was signed by prominent industry figures Mike Grieve, co-founder of the Sub Club in Glasgow, concert promoter Geoff Ellis of DF Concerts and Events and Donald MacLeod, owner of The Garage and Cathouse clubs in Glasgow.

Mr Grieve, who chairs the NTIA Scotland Commission, said: “Enough is enough. Our sector is drowning in a sea of debt as rent and other costs keep being incurred.

“And there is despair that not only don’t we have a road map to re-opening, but we have a cliff edge at the end of April when what little financial support there is comes to an end and the restrictions carry on. We need more financial help and we need it to continue until we can fully re-open.

“The nature of our businesses means that we can’t operate sustainably with any form of social distancing and restrictions.”

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Most of the Scottish hospitality industry is working towards a reopening date of April 26, when outlets can welcome customers indoors again, without the sale of alcohol. Alcohol will be able to be sold in outdoor areas. Restrictions will ease again further from May 17, when alcohol sales will be permitted indoors.

However, no indicative opening dates have been provided for nightclubs.

It has led to fears within the industry that it will be late summer before operators are able to trade again, and with grants due to end in April it could mean months without funding.

The Scottish Government has signalled that the last payments will be paid under the Strategic Framework Business Fund on April 19. One-off start-up funds will then be offered but there will be no support for nightclubs after that.

Mr Grieve told The Herald: “All we have got is: you are not on the map yet. That is incredibly difficult for anybody to try and manage the future of a business with.”

He added: “I think there are a great many businesses on the brink. We all have fixed overheads that we still have to meet. Any of the funding we have received to date has of course been very welcome, but there are huge inconsistencies across the spectrum of hospitality businesses. Some have received relatively substantial sums, others have received next to nothing.

“A lot of businesses are sitting there with bounce back loans or CBILS loans with no idea of how they are going to be able to repay them.

“We are predicting that, for an average business it could be three, four or even five years of normal annual profits just to repay those loans. That’s clearly not tenable.”