Appendix 2: Government support for community
pubs briefing paper
1. The Prime Minister asked John Healey in January
to lead work across government designed to help and support Britain's
community pubs.
2. Community pubs include the traditional local pub
and local membership clubs, which offer more than just a place
to drink. In many communities across Britain the pub is the centre
for social and recreational activity and a focus for local charitable
activity. For many people the local pub is one of the things that
helps define the place where they live. Pubs that people value
for their importance to the community can be found all over Britain;
in rural villages, suburban streets and in our town centres.
3. Yet, despite the place that the pub holds in British
life, many are closing their doors. In February 2010, the British
Beer and Pub Association (BBPA) published figures showing the
number of pubs that had closed in the second half of last year:
- Pub closures are now running
at 39 a week, down on the 52 pubs a week closing in the first
half of 2009;
- Total of 2,365 pubs closed in 2009, and
- 24,000 jobs were lost in 2009, because of pubs
closing.
4. It is not just pubs and clubs in rural areas that
are under pressure but also those in urban and suburban communities.
5. There are a number of reasons why pubs and clubs
are closing, such as the impact of the recession and legal changes,
like the smoke free laws. Changing social habits also mean that
fewer people are visiting pubs and clubs. The Government cannot
try to reverse wider social and lifestyle changes and we are not
able to support businesses that are fundamentally unprofitable.
6. To continue attracting customers, pubs and clubs
need to offer more than just a pint. Pubs that diversify and extend
the range of services they provide to the community are more likely
to prosper than those that do not. We have heard from the licensed
trade that rising costs are a key factor in closures and tenants
and lessees argue that some profitable pubs are being closed down
because pub companies want to profit from alternative uses for
the pub's site. The Government can support pubs and clubs to make
their businesses stronger and more diverse and seek to strengthen
and support the pub industry.
7. To develop a comprehensive package of support
for community pubs John Healey MP has worked closely with ministerial
colleagues in the Treasury, the Departments for Culture Media
and Sport (DCMS), Business, Innovation and Skills (BIS), Environment
and Rural Affairs and the Ministry of Justice. The Government
has taken account of findings of the BIS and CMS select committees
and the work of the All-Party Beer and Pub Group as well as holding
discussions with pub companies, landlords, tenants and other groups
directly involved in the pub industry.
8. Our plans fall into three main categories:
- Business support;
- Industry standards and consumer choice, and
- Community and local council action.
Package of support
1. Business support
Business support gateway services
9. 'Pub is the Hub' is a national advisory body which
will act as the established first point of contact for landlords
and tenants requiring access to expert business advice on a range
of issues that they face.
10. 'Pub is the Hub' is a voluntary not-for-profit
business support service, set up in 2001. Pub is the Hub has
visibility and credibility with the industry and a track record
of supporting over 300 pub-based rural services. With new government
funding to establish seven full-time advisors, Pub is the Hub
can extend their support nationwide, providing business advice
directly themselves or directing pubs to Business Link or another
agencies to get the best support for their needs.
11. To strengthen these links our intention is to
put in place a formal arrangement between Pub is the Hub and the
established Business Link service to underpin advice and
support. The initial work on this arrangement should be completed
as soon as possible and should result in a formal link between
the two organisations. Our new funding for Pub is the Hub will
be around £1 million over the next three years.
Community ownership support for 50 pubs over 3
years (through the Plunkett Foundation)
12. We will contribute to a three-year pilot programme
to help up to 50 pubs move into community ownership through the
Plunkett Foundation. This programme will provide support to local
communities to be directly involved in creating and maintaining
their community pub, so it can deliver the services and benefits
they want. The Government will provide grant support to communities
matched by loans from third-sector organisations and a contribution
from the communities themselves. Funding for this programme will
be £3.3 million over three years.
Support from Regional Development Agencies (RDAs)
for community pubs
13. We are working with RDAs to ensure that Local
Action Groups and local communities are aware of the benefits
of community pubs and have all the information they need to access
the available funding under the Rural Development Programme for
England (RDPE).
14. Defra and the RDAs will be publicising this widely
through existing rural networks, including the RDPE National Rural
Network managed by the Commission for Rural Communities.
Independent study of the pubs sector
15. We will commission an independent study of the
pubs sector to establish ownership and management patterns, reporting
to Government by the end of 2010.
Independent review of the issues affecting local
membership clubs
16. Work on this review has shown that while pubs
and local membership clubs face many similar challenges, there
are pressures particular to working men's and other local membership
clubs. Ministers in DCMS and DLCG have therefore jointly commissioned
Lord Turner of Bilston to lead a clubs review and to report to
ministers in the two departments by the summer recess.
Skills plan for pub sector
17. Building on the research into licensed hospitality
conducted by People 1st in November 2009, we will commission a
one year on follow-up review of skills in community pubs. The
review will be independently chaired by Chris Banks, Chair of
the Learning and Skills Council.
18. The review will pick up skills issues arising
in the BIS Select Committee Report on the pub industry, and will
include:
- Provision of business management
skills, particularly looking at community pubs, and
- Access to training and funding for SMEs/community
pubs including the provision of on the job training.
2. Industry standards and consumer choice
Endorse the BBPA Code of Practice on tenancies
and leases and commit to act if industry cannot show it is complying
with the code.
19. The BIS Select Committee has recently completed
an in-depth review of the relationship between pub companies and
their tenants and published its Report. The Committee recommends
the industry should have one year to fully implement their Code
to ensure transparency and openness in setting contracts and leases.
20. We back the Committee's recommendation and the
one-year deadline for the industry to show it is complying with
its own Code. Government will monitor progress for one year and
intervene to regulate by putting the Code on a statutory basis
backed by an industry enforcer, if the industry fails to deliver.
Seek to strengthen the industry Code of Practice.
21. We will press the industry further to offer freedoms
for tenants to offer consumers more choice as part of their Code
of Practice. The Code of Practice should:
- offer tenants a tie/non-tie
option to enable them to best reflect the needs of the community,
and
- offer a guest beer option for those tenants that
opt for a beer tie.
22. Government will monitor progress for one year
and intervene to introduce a non-tie option and legislate for
a Beer Order to allow guest beers if these flexibilities are not
introduced.
Press the industry to regularise equipment which
measures beer flow (Brulines) and intervene if industry fails
to respond
23. We will respond to the industry concerns over
Brulines—these are the flow measurement devices that ensure
the tie contract is being observed and that the tenant is not
buying beer outside the contract. The industry should voluntarily
ensure that all such measuring equipment is calibrated by the
National Weights and Measurement Laboratory. Failure to do so
will result in Government intervening to ensure fairness by requiring
that equipment is calibrated.
Amusement Machine Licence Duty (AMLD) review of
skill with prize machines
24. Following recent discussions with the gambling
industry regarding machines commonly referred to as 'skill with
prize' (SWP) machines, the Treasury and HM Revenue & Customs
(HMRC), in consultation with the Gambling Commission and the Department
for Culture, Media and Sport, will undertake a review of SWP machines
and the games played on them for the purposes of amusement machine
licence duty (AMLD).
25. The Review will report to Ministers in July
2010, to allow time for discussion with the gambling industry
and other interested parties.
Relaxation of licensing requirements for live
music in small venues
26. The Government will amend the Licensing Act 2003
to make it easier for community pubs and other small venues to
put on live music without the need for a licence, subject to the
outcome of the ongoing consultation and with the consent of Parliament.
We currently propose that events with an audience of 100 people
or fewer would be exempt. The new exemption will allow community
pubs, which have not already done so, to provide live music to
small audiences without having to apply for a costly variation
of their licences.
3. Community and local authority action
The Government will publish a planning brief for
all local authorities setting out the flexibilities and protections
available to pubs under the planning system
27. The Chief Planner will publish a planning brief
promoting the flexibilities and protections currently available
to pubs under the planning system and promote this through a letter
to all local authority Chief Planning Officers. For example,
the existing Use Class Order allows pubs to diversify into food
or to incorporate a shop without the need to apply for planning
permission. The planning brief will make such provisions better
known and understood.
Control the demolition of pubs and clubs to allow
community intervention
28. We will further strengthen the planning tools
for local authorities by amending the Secretary of State's Direction
to define as development the demolition of community pubs and
working men's clubs which are not attached to dwellings. This
will give the planning authority time to consider before demolition
can take place whether to require the owner to submit a planning
application for the site and so ensure that the community are
fully consulted before a pub is lost.
Removal of restrictive covenants
29. The Ministry of Justice will consult to remove
the right for pub owners to place covenants on the land when they
sell sites to stop the site being used for a pub in future. This
also responds to a proposal raised by local authorities under
the Sustainable Communities Act.
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