Is the community right to bid helping or harming the pub trade?

The community right to bid was brought into effect in September 2012 and has gained support ever since, with the Campaign for Real Ale (CAMRA) announcing in February that 300 pubs had been listed as assets of community value (ACV), and hopes that the 400th will be reached this year. Launching its Community Pubs Month this week, CAMRA announced there are now 56 pubs across the country being run by local communities.

But it has not all been plain sailing. Last month Hertfordshire publican Carol Thornton complained that locals had “interfered” in her plan to sell the Three Horseshoes in Letchmore Heath, despite not generally using the pub or generating enough interest to bid for it themselves. She said no-one else wants to buy an ACV-listed pub.

Trapped​

This week Simon Reed, a publican who has owned his Shropshire pub for the past 30 years, declared he felt “trapped” after a tribunal upheld a council decision to list it.

According to CAMRA, nominating a pub as an ACV does not stop an owner from selling, it just gives the local community a say when a pub is threatened with closure.

Jonathan Mail, the group’s head of public affairs, said: “A listing provides a window of opportunity before a property is sold for the community or others to prepare bids.”

Wary​

However, a number of publicans remain wary. John Stroud, who owns the freehold of the Four Alls in Ovington, North Yorkshire, contacted the Publican’s Morning Advertiser to voice his concern at his pub being nominated (but not yet listed) as an ACV in January.

He bought the pub 12 years ago for £265,000 and has spent a similar amount extending and improving it. He said the pub, which he put on the market three years ago, has struggled and has only remained open thanks to its accommodation revenue stream and the fact that his parents, who are both aged 75, live in the premises and work for him.

“Most of our village do not use the pub,” he insists. “What happens when my parents are incapable of helping to run the business? Given the turn-over is unlikely to cover paying for replacement staff, I don’t know.

Simon Hall, director of property agent Fleurets, said: “In most cases the existence of an ACV merely delays and frustrates the sale process as, invariably, the community does not unite and cannot raise the funds to buy.

“Despite this, it can leave a legacy that negatively impacts on the value of the property for the owner. The goal of saving the pub isn’t achieved, but the owner is penalised as a result of the process. This can’t be fair.”
Brigid Simmonds, chief executive of the British Beer & Pub Association, supports the community right to bid, but warns it should not be used lightly in the case of unviable businesses.

Effective​

However, Dale Ingram, a specialist planning consultant at Planning for Pubs, cites viability as a thorny issue.

“Very few pubs are truly unviable, but for those that are, it is easy to demonstrate this to the authorities by providing accounts and marketing evidence to show no takers for them as pubs at a reasonable price,” she said. “ACVs are a welcome addition to the campaigners’ armoury, but with just a handful of successful takeovers so far, the jury is still out on how effective they will truly be in stemming pub losses, currently running at 28 a week.”

A spokesman for the Department of Communities and Local Government said the Government was doing all it could to protect pubs and that the community right to bid was part of that.

He said: “The community right to bid has already enabled almost a thousand communities to put some protection on land and buildings, including pubs, to prevent them from being sold without their having a chance to bid for them. However, not all pubs will be suitable for listing and elected local councillors are empowered to make the decision as to whether a nominated building or piece of land meets the criteria.

“A number of assets have already been purchased by communities. The right to bid, and the support we have put in place for local groups has helped to bring communities together around a common cause. Owners are not forced to sell to the community or below market value. There is also a right of appeal against a listing decision for asset owners, with cases being considered by an independent tribunal.”