Category: News

Lincoln Laundry is a member of the Textile Services Association (TSA), which has been increasingly concerned by the reports of its members at the lack of support they are entitled to.  With 24,000 people being employed by the industry, decisive action is required to save those jobs. The TSA has been lobbying the Government for more help alongside organisations such as UKHospitality. 

Like many of the businesses that have come forward to provide evidence for the TSA’s argument, Lincoln Laundry is a victim of circumstance. “In early March 2020 we had just finished moving into new premises,” says Ahmed. “We needed the extra space to help continue growing the business, although there were expenses with preparing the building and buying new equipment, we were well positioned to have a good year.”

But when lockdown was introduced at the end of March, all their customers closed and business dried up. The move to new premises had put them just over the threshold for higher rates. While Lincoln Laundry has been able to access the furlough scheme to help pay staff, they have been left out of the other measures put in place to help the hospitality industry, like rate relief and grants. “The government hasn’t been looking at the big picture,” says Ahmed. “They’re responding to the loudest voices in the room, but they’re not providing any help to the sectors that support the businesses that are getting financial aid.”

The local authority has done what it can, but “their hands are being tied by the government, with no room to consider cases like us.” With no rates relief, the business has had to go on a payment plan. “Our fixed costs don’t change whether we’re open or closed.  With 95% of our customers closed, we burned through our reserves just keeping things ticking over in the first lockdown,” says Ahmed. “No business can hold a full year’s income in reserve! Things looked up during the Eat Out to Help Out scheme in August, but slowed up immediately after.” With the second lockdown started in November, and the post-Christmas lockdown once again shutting its customers, Lincoln Laundry has seen its income shrink to almost nothing.

“The lockdown has also meant a lot of our debtors aren’t able to repay what they already owe, and we’ve seen a few customers go bust already. It all adds to the pressure – we’ve had to put in considerable amounts of our personal savings.  It’s been enormously stressful but we’re doing everything we can to ensure we’ll be able to continue supporting our customers when they begin reopening, as well as saving the jobs of our staff,” says Ahmed. “They’re like family to us, some of them have worked here for years and the depth of experience they have is a huge part of our success. They would be impossible to replace.”

Commercial laundries have always played an important (if hidden) role in the hospitality and foodservice industries.  With the increased focus on hygiene and cleanliness, as a result of the measures required to control the spread of Covid-19, laundries will be vital for a smooth recovery when lockdown restrictions are able to be relaxed. “We know we’ve got a viable business once things start opening up,” says Ahmed. “But the longer we’re left to look after ourselves, the harder it’s going to be to survive.

“In Scotland and Wales a much higher percentage of laundries are getting help, but in England supply chain businesses like us are being abandoned. Central government sets the rules, and the local authorities’ hands are tied. We did qualify for a small grant in November, but that barely made a dent in our costs, and barely even covered our rates for the month,” says Ahmed. “Even when we do reopen, our customers work on a 60 day cycle to pay their contractors, so it will take nearly two months before we get paid again.  Not having a sensible policy in place to support businesses like Lincoln Laundry is going to put the wider hospitality industry in a less stable place at a critical time.”

The TSA has been working with other trade associations to urge the government to provide the same level of help to commercial laundries supplying the hospitality industry that other businesses in the sector have been receiving. This includes amending guidance given to local authorities on discretionary grants, allowing more commercial laundries to qualify for rates relief, deferment of VAT until payback is viable, extending the terms of government loans until laundries can afford to repay them, and making more loans available during the bounce back.

“At the end of the day, we’re just asking for fairer treatment. Many businesses in other industries have been getting huge grants while they haven’t even had to close, but companies like us, in the supply chain, have seen 95% of business stop for a year, and we’re getting short shrift,” says Ahmed. “The government knows how important the hospitality and service industries will be to the future recovery of the country, but as it is they’re creating more problems by not supporting the supply chain that supports the industry.  If the supply chain goes under, the hospitality industry won’t be able to function.” 

If you wish to discuss the above or if you would like any further information, please do not hesitate to contact us on 020 3151 5600 or at tsa@tsa-uk.org.

The TSA has been urging the government to provide the same level of help to commercial laundries supplying the hospitality industry that other businesses in the sector have been receiving. That includes rates relief; amending the guidance to local authorities on discretionary grants, so that commercial laundries can be included; deferment of VAT until payback is viable; extending the terms of government loans until laundries can afford to repay them; and making more loans available during the bounce back.

The experience of Dash Linen is typical of the stories the TSA has been hearing from its members since the first lockdown began last March.  “The majority of our customers have been closed since the first lockdown,” says Edward. “We’ve lost a few altogether, as they change their operation, and some have gone bankrupt owing us money. It’s a difficult situation for everyone but it’s not being made better by the government’s scattershot approach to which businesses receive help and which don’t.”

The lack of support has already caused staff redundancies. “Before the pandemic we were employing 63 people. We had to make 14 people redundant in June 2020 after our request for grants was turned down, and since then another five have left of their own accord,” says Edward. “We’ve had a very low staff turnover, normally. Some of our staff have worked with us for over 20 years – it’s a very difficult situation. And needless to say, making everyone redundant would put us in an even worse situation.”

During the period where restrictions were eased, Edward noticed a significant drop in business compared to before the pandemic. “We used to be working six days a week. But at that time, despite the hospitality sector opening up, it was down to two.”

Edward thinks the relative invisibility of the hospitality laundry industry might be behind the government’s lack of response. “Very few people know how many businesses rely on commercial laundries,” he explains. “If you look at every piece of linen in a restaurant, or every piece of cloth in a hotel, it will be regularly cleaned by a laundry. But this is a hidden side to these industries.  The importance of ensuring that supply companies like us, who are vital to keep other companies running, are receiving the right help isn’t getting through to the right people.

“We’ve built this company up through hard work, and while we’ve never been eager to claim money from the government it’s in situations like this, where almost all of our customers have had to stop operating, that we really need the support – and we’ve just been ignored,” says Edward. “It feels particularly unfair considering the reports of how much money has been going to giant chains that haven’t been particularly affected by Covid-19.”

Without support, it is difficult for companies like Dash Linen to plan for the future. “At the beginning of December 2020 we were thinking that we might at least have an idea of how long it would take to get back to normality, but then we were put into Tier Four and lockdown and it seems like the government is still playing everything by ear, hoping things will somehow just work themselves out.”

Keeping the company going during these trying times has been difficult, and has caused a lot of stress for Edward and his family. “Dad started this business, built it up from nothing,” says Edward. “Seeing something that you’ve invested so much of your life into put at threat through no fault of your own, of following the government’s rules and then being left out to dry, has been really tough for him, and me too.”

Edward hopes that the government looks again at its rules and reconsiders the limits in place for which companies are eligible for assistance. “At a minimum, we need rate relief for at least a year,” he says. “But the council keeps deferring making a decision about it. Similarly, eligibility for support from local authorities is set by how much rates you pay. We moved above the cut-off point by just £1000 at the end of 2019 after investing in a larger building, but it’s marginal and it doesn’t change the fact that hardly any of our customers have been operating for almost a year.

“The hospitality supply chain is being overlooked by the government, and it’s putting a lot of companies at risk. This will only cause yet more problems further down the line: without us, much of the hospitality industry can’t operate.  I just hope that the government realises its responsibility to SMEs in this sector before it’s too late.”

For more about Dash Linen visit dashlinen.co.uk

If you wish to discuss the above or if you would like any further information, please do not hesitate to contact us on 020 3151 5600 or at tsa@tsa-uk.org.