The Eat Out to Help Out (EOTHO) scheme had a “limited effect” on the UK’s restaurants and cafes claims a new report by the London School of Economics.
Chancellor Rishi Sunak launched the UK Government subsidised eating out scheme in August – with taxpayers helping towards the cost of meals in a scheme costing around £850m.
A report – Recovering from the first COVID-19 lockdown: Economic impacts of the UK’s Eat Out to Help Out – was compiled by the LSE’s Centre for Economic Performance to review its performance.
It found only a temporary impact on visitor numbers and jobs and that an increase in take-up in areas only resulted in a small rise in customers.
EOTHO took place during August – normally a busy time of the year anyway for the hospitality sector.
The authors compared how the differing rates of take-up of the scheme across areas of the country affected the numbers of visitors to restaurants, pubs and cafes during August.
They find that a 1 per cent uptake of the scheme by businesses in any particular area increased the number of visitors to restaurants, pubs and cafes in that area by 0.23 per cent in August 2020.
Overall, EOTHO increased the number of visitors by 5-6 per cent across the UK in that month, but this did not last once the scheme had finished.
Similarly, a 1 per cent uptake of the scheme increased the number of adverts for jobs in restaurants and cafes by 0.56 per cent in August 2020. Overall the number of adverts for jobs in restaurants and cafes rose by 7-14 per cent. This effect lasted until the end of September.
They said a lack of data meant the authors could not verify whether the increased demand for workers had led to more people actually being hired – and, if so, if these jobs were permanent.
Nicolás González-Pampillón, report co-author, said: “Industries that rely heavily on footfall and social interactions were directly and severely affected by lockdown.
“While we find that the EOTHO programme increased visits to food establishments, this effect was concentrated on days when the discount was available – Mondays to Wednesdays in August. It failed to encourage people to go out for other purposes or to eat out after the discount ended.”
Gonzalo Nunez-Chaim, report co-author, said: “Given the policy objectives, an increase in the demand for food services is likely to be reflected in higher levels of footfall in recreational activities and more job ads as businesses may hire more staff.
“To capture some of these effects, we looked at footfall using daily mobility data from Google and employment using daily data on job posts from the job website Indeed UK.
“Despite these not being ideal outcomes for measuring the direct impact on the economy, both indicators are timely and help us to understand some of the effects of EOTHO.”
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Katharina Ziegler, report co-author, said: “Data limitations and the interaction between different policies complicate any cost-benefit calculation of the programme. On top of that, there is evidence from other research indicating the increase in footfall due to EOTHO had an adverse effect on new Covid-19 cases.
“Thus, any economic gains from the scheme may have come at the cost of more infections.”
Businesses taking part in EOTHO offered a 50 per cent discount, up to £10 per person on Monday to Wednesdays during August 2020. By the end of September 2020, £849 million had been claimed through the scheme, providing discounts for over 160 million meals in August.
A Uk Government spokesman said: “As we have done throughout the pandemic, we have worked with creativity and at pace to support individuals and businesses.
“We designed The Eat Out to Help Out scheme to protect 2 million jobs in hospitality, an industry whose employees are at high risk of long-term unemployment in the event of redundancy.
“It protected jobs across the UK by bringing back 400,000 people from furlough while safely restoring consumer confidence.”
The Treasury added that figures confirm that take-up of Eat Out to Help Out does not correlate with an increase in incidence of Covid regionally.
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