Written evidence submitted by Music Venue Trust

1. What are the most significant challenges facing owners and operators of built heritage assets, and how are they affecting what those sites can offer?

Since its inception in 2014, Music Venue Trust (MVT) has considered commercial sector ownership of the buildings that house Grassroots Music Venues (GMVs) to be one of the most significant threats to the sector. Data from the 2023 Annual Report concluded that 89% of GMV operators do not own the building that houses their venue, and that the average rent for a GMV was £4,567 per calendar month (a rise of 37.5% per year on 2022), whilst those who owned their building had equivalent property ownership / finance costs of £2,793 per month. Regardless of their rental or ownership status, 66.2% of GMVs invested over £3,000 in enhancing their buildings in 2023.

We believe that community ownership of these assets helps to address the ongoing issue of venue closures due to increasing rent, property speculation, and lack of ownership security. By providing a framework for community ownership, it is possible to preserve venues as cultural hubs for local communities.

GMVs are community hubs, vital incubators of and investors in talent, supporters of regeneration and the local economy, education and employment. To do this, they need long term security of tenure and a landlord/operator relationship that is aligned in aims and ambition. Community ownership not only offers that on a rental front, but also gives them the opportunity to look long-term for funding and apply for money that can go to investing in carbon neutral buildings, accessibility, facilities, and programming budgets.

MVT has undertaken extensive research which establishes that community ownership and not for profit models offer greater resiliency for operators in the GMV sector (regardless of whether they own their building or not). MVT has tracked and evidenced venues operators who chose to incorporate as not for profit (using models including Community Interest Companies, Community Benefit Societies or Charities) access Business Rate reductions, VAT exemption on cultural ticketing, and preferable energy rates through the Crown Commercial service, as well as improved access to grant funding.

When MVT formed in 2014 less than 2% of the sector was constituted as a not for profit, today over 33% of member venues are constituted as a not for profit, with Community Interest Companies being the most favoured model at 25%. We estimate that these changes, and the trading advantages and tax clarity they provide, have saved £17 million in the last 3 years on ticket sales alone, much of which has been reinvested back into cultural activities, with other benefits such as local authority approach to Business Rate Relief likely to significantly improve this figure.

1a. What interventions are needed to prevent the managed decline of heritage assets on publicly-owned land?

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1b. What can the Government do to make it easier for communities or local businesses to take ownership of historic buildings?

There is currently a missed opportunity for the Government to deliver its community ownership agenda in an impactful way in areas of high deprivation and low expectations. Increasing the profile of contemporary music and grassroots creative communities supports career development, encourages further interaction with the arts, and delivers assessable financial benefits to regions and city centres.

We would like to see the Community Ownership Fund run by MHCLG used more by national organisations like MVP to serve a community of interest, in our case a national community of music fans, rather than simply a geographical community. BY bringing together two communities of interest we can maximise local investment, which in turn would allow MVP to be more agile in responding to threats within the sector.

To give an example of our own approach: Music Venue Properties (MVP) is a Charitable Community Benefit Society created by MVT in 2021, which seeks to preserve and conserve the buildings that house GMVs. The Community Benefit Society model has allowed MVP to raise money through Community Shares, a form of friendly finance that allows members of the public to invest and become part of the Society.

Through MVT’s “Own Our Venues” campaign, we raised over £1.2m in community shares (from over 1300 investors) and,crucially, it allowed MVP to unlock other funding streams including preferential loans (through Figurative Arts & Culture Impact Fund and Local Councils), grants (from Arts Council England and Community Ownership Fund) and donations from within the music industry. To date MVP has raised over £2.75m.

The funds raised are used to purchase the buildings that house GMVs. Once acquired, MVP leases the buildings back to the venue operators via a “Cultural Lease” with favourable terms. This ensures that rents remain affordable and sustainable, and that operators have security of tenure. This ownership model also helps prevent property developers from converting venues into residential or commercial units, whilst committing operators to a hosting minimum amount of cultural events each year, in turn benefiting the local community.

By owning the building, MVP provides long-term security to GMVs and their community operators, allowing them to focus on their core mission—promoting live music—without the constant threat of financial pressure or eviction. Venue operators are able to invest in their facilities, improve programming, and build stronger connections with local communities without fear of displacement.

To date MVP have purchased five GMVs (The Snug in Atherton, The Ferret in Preston, The Bunkhouse in Swansea, The Booking Hall in Dover, and Le Pub in Newport).

To give an example of a situation that prevented MVP from buying The Polar Bear in Hull: the previous historical tenants had made alterations to the business without seeking planning permission. Subsequently the Council are working through a planning enforcement notice with the current tenant and landlord. If MVP had bought the building then as the owners we would be liable for any costs.

We do not currently have a solution for the above example but practically this prevented community ownership of a much-loved, valuable and historic asset in Hull.

2. How effective are the current funding and finance models for built heritage?

The current challenge is a lack of investment into GMVs, particularly into the 33% of the sector which is registered as not-for-profit entities. Lack of access to capital funding, particularly in relation to the acquisition of property, resulting in lack of long term security, inability to invest and increased risk of closures.

2a. What should long-term public funding for the sector look like?

As mentioned above, we would like to see the Community Ownership Fund used more by organisations like MVP to serve a community of interest, rather than a geographical community, which in turn would allow MVP to be more agile in responding to threats within the sector.

We previously campaigned on extending Social Investment Tax Relief (SITR) to unlock dormant capital for the benefit of GMVs, specifically for the purpose of resolving the ownership issues surrounding this sector.

SITR was introduced to encourage individuals to support charities, social causes and enterprises allowing these organisations to access new sources of funding. The intention of the policy was to enable essential finance raised through SITR to be used by organisations to provide a wider social benefit. The policy has failed, however, to unlock substantial social investment because:

● It has lacked purpose, specificity and a clear focus.

● The tax benefit is limited to individual income tax liability and so must be used by individuals rather than corporations.

● Charities and social enterprises are often ineligible to receive investments under existing tax-advantage schemes due to their legal structure.

With SITR no longer in existence, we would like to see a tax relief to encourage investment from the sector that does not include these limitations.

In the United States Opportunity Zones have been used as an investment tool that allows companies to invest in ‘distressed areas in the United States’. Created in 2017, Opportunity Zones have provided companies based in the US with tax benefits when they have invested in low-income areas with a focus on job creation and social benefit.

This is a model that UK policymakers can draw inspiration from. Live Nation is a major commercial music industry organisation based in the US that has used the Opportunity Zones policy to invest £200 million, unlocking a 130% tax credit. The desire to carry out similar investments exists within the UK music industry.

The creation of such a tax relief in the UK is essential so that the dominance that our industry has built up globally is not ceded as an inadvertent consequence of policy decisions that were well-intentioned but have since proven ineffective. This will contribute to levelling up communities and regions across the UK, benefiting communities of all sizes, and ensuring more people have access to cultural opportunities.

3. What role does built heritage play in the regeneration of local areas and in contributing to economic growth and community identity?

Many grassroots music venues (GMVs) are housed in historic buildings within their local communities that might include pubs, working men' s clubs, arts centres, and social clubs. These GMVs are uniquely placed to provide long term and sustainable cultural delivery to a wide variety of areas from sprawling cities to rural communities, and their position at the heart of the music ecosystem allows investment to reach beyond the funded organisations. Their places as cultural regional hubs support a wide region beyond their doors and develop skills often not catered to in traditional educational environments.

Many venues provide additional activities and benefits for their local communities. These include apprenticeships, jobs for local young people, children’s classes and concerts, fairs, festivals, comedy, and day activities. Local communities will lose a whole host of cultural and community activity if venues are to close as a result of cut funding and higher business rates.

If the buildings that house GMVs are not protected, the venues cannot provide the valuable community and cultural services that they do, which will also result in a loss of local jobs and training opportunities, as well as the preservation of historic buildings.

3a. How can heritage buildings be supported to increase energy efficiency and contribute to the Government’s net zero targets?

Preserving heritage buildings and assets through the community, as MVP has done above, enables GMVs to focus on long-term funding and projects, rather than short-term financial costs and security.

This provides long-term security to GMVs and their community operators, allowing them to focus on their core mission—promoting live music—without the constant threat of financial pressure or eviction. Venue operators are able to invest in their facilities, improve programming, and build stronger connections with local communities without fear of displacement. This investment often includes measures taken to increase energy efficiency but cannot be done without the long-term security that the venue will be able to keep operating in the building they are housed in.

4. What are the financial, regulatory and practical barriers to preserving built heritage?

We believe that by appointing Music Venue Trust to act on behalf of grassroots music venues as a statutory consultee on planning applications would be a cost-effective way for the Government to ensure that the historic buildings housing GMVs are protected by the specialists who understand them best.

Recognising the potential threat posed to cultural assets by development, and seeking to manage that impact, the Theatres Trust was established by an Act of Parliament in 1976. The Theatres Trust was then established as a Statutory Consultee in planning. Subsequent Planning Acts have embedded that role, enabling Theatres Trust to act as an advisor to local authorities and developers to ensure theatres are recognised and protected within planning. GMVs are an equivalent cultural asset to a theatre, delivering the same cultural and economic benefits to the community and surrounding area, and should enjoy similar protection within the planning process.

Sports England are also statutory consultees where developments are likely “to prejudice the use, or lead to the loss of use, of land being used as a play field; or is on land which has been used as a playing field at any time in the 5 years before the making of the relevant application and which remains undeveloped; or allocated for use as a playing field in a development plan or in proposals for such a plan or its alteration or replacement”.

We do not believe grassroots music venues being included as statutory consultees would require similarly prohibitive restrictions. They do, however, play a similar function as grassroots sports clubs to their local communities; they are community hubs, essential to the night-time economy, vital incubators of and investors in talent, supporting regeneration, education and employment all whilst showcasing a range of artforms.

4a. What policy changes are needed to make restoring historic buildings easier and less expensive?

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5. What policies would ensure the UK workforce has the right skills to maintain our heritage assets?

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Contact:

Sophie Brownlee - External Affairs Manager