'I can't afford to pay my staff what they deserve'

"It wasn't an easy decision. Even though I know I've done everything I can, I feel like I'm letting the staff down."

Scott Farr decided he wanted to be a chef at the age of 10 when he worked in his grandad's pub.

Now 56, having worked in the industry for most of his life, he has made the "heartbreaking" decision to close and sell his restaurant because he says he is not making enough money to increase his staff's wages in April.

He owns the School House Restaurant in South Normanton, Derbyshire, but for the last year has been working two other jobs to pay himself a wage.

Mr Farr said: "Last April, all minimum wages went up and that's when we really started to struggle.

"At the same time, energy costs carried on going up, supplier costs started going up.

"Then the final thing was just knowing that in April, all the wages have got to go up again and I just knew I couldn't do it."

The minimum wage for over-21s, known officially as the National Living Wage, will rise from £11.44 to £12.21 from April 2025.

For 18 to 20-year-olds, the minimum wage will rise from £8.60 to £10.

"My staff are brilliant and everyone in the service industry deserves to be on more than minimum wage, but we aren't making enough to put it on," he said.

Mr Farr said the culmination of wage increases, energy costs going up and supplier price hikes had created the "perfect storm" and his business was operating at a loss.

"They [suppliers] are just small independent suppliers that don't have any choice, their costs are going up, fuel, energy, it's all going up," he said.

"It's the perfect storm and the boat has been sunk, and it's sinking to the bottom of the ocean."

The chef, who has previously owned a restaurant and a pub, worked as an event caterer for 15 years before moving to Derbyshire, where he bought the School House in 2023.

"I'm working really hard and I'm losing money, my love for it has gone," he said.

Alongside running the restaurant, which he says is not making any money, Scott is working an agency job in care home kitchens.

He has also been working for West Notts College, teaching vulnerable adults basic cooking skills.

"I get it, everyone is struggling, not just us, and people can't go out for meals when they need to be paying £40 for a fillet steak, but that's what we truly should be charging to make it work."

Figures from trade body UKHospitality show there were at least 17,000 fewer businesses in the sector at the end of 2024, compared to 2019.

Kate Nicholls, chief executive of UKHospitality, said: "This number is only expected to grow with the industry facing a bill of £3.4bn in April, in large part due to the changes in employer National Insurance contributions."

A recent survey about cost increases in April - conducted among more than 8,000 members - revealed 29% of them will reduce trading hours.

The survey also says 25% have no cash reserves left, and 15% believe they will have to close at least one site.

Scott, who employs three full-time staff and a handful of part-time workers, has reduced his opening hours - from Friday to Sunday - and will close on 11 April.

He announced the closure on a video, which he posted on social media.

"I haven't seen one negative comment from anybody. If I could monetise that love and support, I wouldn't just have one restaurant, I'd have a chain of restaurants," he said.

"I've got the place up for sale, a few people have looked, but nobody wants to buy it as a restaurant, because who would? Who would get into this industry at the moment?"

When approached by the BBC, HM Treasury said it did not comment on individual cases.

Announcing the National Living Wage increase last year, Chancellor Rachel Reeves said the pay boost marked a "significant step" towards achieving Labour's promise of a "genuine living wage" for workers.

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