The cost of public holidays - Business Works
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The cost of public holidays

by Lucie Greenwood, Sales Manager, ava Over half of the UK would say 'yes' to a review of the current Bank (national) Holiday schedule, says Lucie Greenwood, Sales Manager at ava. Our research shows that over half (51%) of UK residents are unhappy with the number of public holidays in Britain and how they slot into the calendar.

How are businesses affected by public holidays?

The origins of the Bank Holiday are simple: to give the working classes (and Bank workers) additional time off to rest from their rigorous jobs. Founded by Sir John Lubbock, Liberal MP and banker in 1871, it was also seen as a way of repaying the national debt.

However, some Banks (most notably RBS and Natwest) recently removed Bank Holiday Mondays from their opening times. Seen as a way of keeping up with the demands of the modern consumer, the scheduling of Bank Holidays can also be perceived as a shrewd way of enticing more potential customers through shop doors, especially those who would usually be restricted by work demands.

There are strict rules that all businesses must adhere to with regard to public holidays. Although business owners are not legally obliged to provide paid leave on Bank Holidays, they do need to provide a minimum allocation of leave each year. Thanks to Union campaigning, Bank Holidays are no longer included within an employee's statutory holiday leave.

cost of public holidays While public holidays clearly benefit retailers, for the wider economy it is a totally different story. According to statistics from the Centre for Economics and Business Research in 2012, each Bank Holiday costs the country £2.3 billion in lost productivity. Removing public holidays, meanwhile, could save £19 billion.

In terms of small businesses, the impact of Bank Holidays depends on the type of company they are. Many independent enterprises - such as pubs, restaurants, hotels and retailers - account for 15% of Bank Holiday profits. Whilst the hospitality industry benefits from the increase in trade, our more industrial businesses tend to be hit the hardest. Founder of the CEBR, Douglas McWilliams, said in 2012, "About 45% of the economy suffers; the offices, the factories, the building sites where people tend not to go to work on Bank Holiday."

Any potential changes could also impact upon the school holiday system. Another recent survey by ava discovered that 53% of the population would approve of a re-jigged school holiday schedule - with many firmly against the existing staggered setup that differs from town-to-town across England and Wales.

Key findings

  • The older generation (55-64) were the age group most behind a change in the current system, with 59% wanting a reshuffle
  • 52% of 35 to 44 year olds were happy with the present schedule - surprising as this is a key demographic for parents with dependent children
  • 53% of women were in favour of a change
  • 45% of businesses are affected by public holidays

How does England compare?

While your average worker would naturally love to have more bank holidays throughout the year, it's clear from our research thus far that business owners wouldn't necessarily agree.

public holidays - source: Mercer However, the situation could be much worse for British enterprises. As the chart (from Mercer) shows, other countries have far more public holidays.

With only eight extra days per year, England and Wales fall staggeringly behind other nations. Spain - the number one choice for holidaying Brits - has almost double the annual holidays that we have, with 14 each year. But that's nothing compared to India and Colombia, whose residents enjoy a huge 18 additional days of annual leave.

Although many other countries receive more Bank Holidays than the UK, if theirs fall on a weekend - they miss out. To avoid this unfortunately happening to us, Bank Holidays are moved by 'Royal Proclamation'. Royal Proclamation refers to any official declaration that is used to make structural changes to how the country is run. The need for Royal Proclamation to step in, in regards to bank holidays, first happened in 1968 - when Prime Minister Harold Wilson called for a non-statutory Bank Holiday. This was due to the infamous 'sterling crisis and was seen as a way of preventing further loss to the British Pound.

Is it time to re-schedule?

It's not only the amount of public holidays the UK has that leaves workers disgruntled. The current schedule is, arguably, very unbalanced. May has two dates (following two days in Easter, which usually falls in March or April), August has one - and then there's a huge wait until the next break at Christmas time.

There have been calls in the past to move the first May Bank Holiday, with a proposed 'UK Day' in October to celebrate Britain's military history instead.

The first half of the year tends to be top-heavy with Bank Holidays and many small business owners would find it easier to schedule work if public holidays were spread out a little more evenly across the year. It doesn't seem to make much sense to have so many public holidays crammed into the space of two months. We have two days at Easter, which sometimes falls in April, and then another two days off the very next month.

Losing two days of trade (as is the case in May) can put added strain on many businesses. By moving one of the dates to later in the year, it not only eases the pressure on these firms, but gives the British workforce an extra break in the second half of the year. We're seeing an increasing number of businesses scrapping some Bank Holidays altogether, instead giving their staff the extra days off in lieu. While this might not work for every company, it does give businesses more options and is a far less restrictive system.

There's a sizable gap between the August Bank Holiday and the next public break on Christmas Day. This is why a large chunk of the population are calling for a designated day off in October / November time. You would think it would be mutually beneficial for employees and employers alike. Many workers use their leave allocation at the beginning of the year and in the summer months, leaving them with a long unbroken stint throughout the autumn. For a lot of businesses, April and May wouldn't feel so disrupted and it will be easier for them to maintain a steady rate of production throughout the year, if one public holiday was to be shifted to October or November.

For more information, please visit the: ava website

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