Scotland risks losing “many of our most cherished and cultural venues” for good if support is not provided for the late-night economy in the Scottish Budget today.

The stark warning comes from the Night Time Industries Association (NTIA) Scotland, which declared that the night-time economy is in “freefall” and in danger of collapse if relief from business rates is included in the tax and spending plans of the Scottish Government for the next financial year.

Venue chiefs have added their voice to the clamour across the business community for Scottish ministers to emulate the support provided to the hospitality, retail, and leisure sectors in England, where firms in those industries will benefit from rates relief of 40% (up to a maximum of £110,000 per business) in the next financial year. This follows more generous support provided by UK Government for the preceding two financial years, which has given hospitality, leisure, and retail firms in England rates relief of 75%, up to £110,000 per business.

Firms in Scotland have not benefited from this relief over that period, although at the Scottish Budget last year, ministers maintained the small business bonus scheme - which meant 100,000 properties would continue to be free from rates - and introduced 100% relief from business rates for hospitality firms in the Scottish islands.

The intervention from NTIA Scotland comes at the close of a hugely difficult year for the sector, which the organisation said has been one of “non-stop” business closures as “spiralling costs, record-high taxation, and shrinking disposable incomes push businesses past breaking point”.

Read more:

It cited figures published recently by the British Institute of Innkeeping (BII), which revealed that 25% of venues are already operating at a loss and 80% are making no profit at all. The BII also highlighted the increase in costs stemming from the recent UK Budget which, through a 1.2 percentage point rise in employer national insurance contributions to 15% and a 6.7% increase in national living wage from April, will amount to a “devastating 10%+ of turnover”.

NTIA Scotland has called for the Scottish Government to provide a minimum of 40% relief from business rates, mirroring the support which will be provided in England, and an extension of the 100% island relief for 200 of “Scotland’s most vulnerable cultural venues”.

“These venues are not just businesses – they are the heart of our town and city centres, driving footfall, culture and community spirit,” said Michael Kill, chief executive of the NTIA. “They were the worst affected by the pandemic, employ the largest numbers of staff, musicians and artists, and have the highest costs.”

He added: “The human cost of inaction is equally severe. With 90% of venues employing between 10 and 50 people, but the vast majority of these being too large for the small business bonus scheme, thousands of jobs are on the line.

“The sector’s decline also limits opportunities for Scotland’s musicians, artists, and performers, whose stages are disappearing. The creative lifeblood of our communities is being drained away.”

Fellow industry body the Scottish Hospitality Group (SHG) has meanwhile called on ministers to “do the right thing” and support the industry in today’s Budget. It has been making a pitch for the rates poundage – the figure multiplied by a property’s rateable value to calculate its rates bills – to 35p. The basic poundage is currently 49.8p for properties valued at up to £51,000. There is an intermediate property rate of 54.5p for properties valued from £51,001 and £100,000, and a higher property rate of 55.9p for those valued over £100,000.

SHG director Stephen Montgomery said: “Restaurants, hotels and pubs are the lifeblood of our communities, but the current business rates system unfairly penalises Scotland’s hospitality sector and is not fit for purpose.

“That is why we need to see the Scottish Government do the right thing and deliver urgent rates relief in the Budget today by reducing the poundage to 35p without a cap, which will help all licensed hospitality.

“As our open letter signed by more than 400 business leaders showed such a change is overwhelmingly backed by the hospitality sector and has the support of some of Scotland’s largest employers, as well as the wider Scottish public.

“By backing the licensed hospitality sector in the Budget today, the Scottish Government can send a clear signal that it is listening; that it is committed to working with us in reforming the punitive and unfair non-domestic rates policy ahead of the 2026 revaluations, and by helping the industry to deliver more jobs and investment, turbo-charging economic growth and further supporting Scotland’s communities and high streets.”

The Scottish Government will receive a further £1.5bn of funding in the current financial year, and an additional £3.4bn for 2025/ 2026, as a result of Barnett consequentials announced by Westminster.

The SNP minority administration was continuing to hold talks with the Scottish LibDems yesterday as it seeks sufficient support in parliament for its tax and spending plans for next year, against a backdrop of straitened public finances.