RSM UK partner Saxon Mosely has called on government to walk-back the recent change to the employer’s National Insurance Contributions threshold, as the consultancy’s latest insolvency numbers show more and more hospitality operators going bust.

A spike in the number of insolvencies in the hospitality industry has one industry observer convinced that a large chunk of operators are currently “in survival mode.” 

New numbers from audit and consultancy firm RSM UK show that the number of insolvencies rose by 6 per cent between April and May, up to 277, or the highest amount since November last year. 

The figure also represents a 4 per cent hike on the number of closures on a year-on-year basis for the month of May.

RSM partner and head of leisure and hospitality said the numbers were indicative of “cost pressures and challenges faced by the hospitality sector…really starting to bite.” 

“Higher staff costs and rising inflation, combined with subdued consumer spendings, means some operators are simply running out of runway,” he wrote. “Many have reached their limit in passing on costs to customers and are currently in survival mode.” 

Mosely went on to echo the sentiments of Hospitality UK chief executive Kate Nicholls in calling for a long-awaited “overhaul” of the present business rates system, as well as a revision to the threshold at which employer’s NICs become applicable, moves which he said would go some way to “level the playing field.” 

“The government would do well to take notice before it’s too late,” he said. “While nervousness among consumers remains a concern, some form of government assistance would help to take some of the pressure off.”