The Association of Indoor Play warns that the cost of indoor play sessions will have to rise after the Chancellor did not keep the VAT freeze for the industry that has suffered the longest closures in the COVID pandemic, putting the nation’s most vulnerable children at risk.
The industry has long been campaigning its rate of VAT to be frozen at 12.5%, under the UK Hospitality umbrella, and highlighting both the importance of the sector to the UK’s economic recovery, and to the damage already done to it by pandemic-related lockdowns and subsequent restrictions.
The return of 20% VAT does not come at a good time for an industry facing spiralling fuel and energy costs and with large spaces to heat and light. A recent state of the industry survey revealed that 66% of operators have taken on more debt as a result of the pandemic and of them 89% are worried about cashflow. 69% of operators have seen an increase in insurance premiums and of those one third have had an increase of more than 20%. Furthermore 29% of operators have seen a rental increase of between 10 and 25% in addition to a 13% rise in running costs over last year.
“The biggest losers in this are the children”, said Janice Dunphy, Chair of the Association of Indoor Play and owner of Web Adventure Park in York. “The industry will be forced to increase prices to continue to provide fun and safe indoor play but it risks becoming a luxury spend and inaccessible to the lower income families and communities who rely on our services the most. Operators have only just invested over Covid and re-launched. Our customer base is the one that is highly impacted by the current run away cost of living and in turn this will impact what and where children can afford to do and go.”
The Association has underlined to Government that the Indoor Play Sector provides a beneficial impact to child/adult health and well-being that the impact of households not being able to afford to visit playcentres will have a detrimental impact on health. Over the period of one year, a weekly term time visit to a playcentre has the health impact of taking a child from 90th to 50th centile for weight. If playcentres start to close or become inaccessible the long term impact on child health may be much greater. The Association has been calling for the Government to look at a ‘Prescription Play’ scheme to ensure those families and children who need access can still get access to facilities.
Also commenting on the Chancellor’s announcement, Kate Nicholls, Chief Executive of UKHospitality, said: “This is a real setback for thousands of UK leisure/hospitality businesses still suffering the devastating effects of Covid, and facing a tidal wave of rising costs. For many businesses, the removal of the lifeline of a lower rate of VAT might prove fatal. For a heavily, disproportionately taxed sector a return to 20% dashes the hopes that many businesses could begin to recoup some of the losses of the last two years. Operators in the sector – large and small – have several hurdles to clear on the road to recovery: huge accumulated debts; unprecedented rising costs for energy and raw goods; a chronic shortage of staff; and a fundamentally unfair and crippling business rates regime we’re desperate to see reformed. Locking in VAT at 12.5% would have given hospitality businesses a major boost, and helped the sector in its ambition to lead the UK back to post-Covid prosperity.”
The Association of Indoor Play is the trade association for the 1,000 indoor play operators in the UK and has a membership base of 25% of the industry including single and multi-site businesses. AIP is a member of UK Hospitality, to whom they provide advice on government legislation for indoor play. They are also members of IAPPA (The International Association of Amusement Parks and Attractions). The AIP Committee is made up of a group of seasoned operators who volunteer their time and share their experience, expertise and passion for the industry.
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