London’s music venues are recovering – but business rate review could stop them in their tracks

A woman dances in a nightclub. Image: Getty.

Much has been written about the revaluation of business rates and their impact up and down the country. Due to an outcry from a number of sectors and business lobbying groups, not least the CBI, the chancellor is considering measures to relieve those facing the highest increases. (In his recent Budget, indeed, he gave pubs a rebate of up to £1,000, though he did nothing for other sectors.)

Most of the businesses worst affected are in zones 1 and 2 in London, where property has, in some cases, doubled in value since the last valuation was conducted in 2008. And it is the independent retail and commercial sector that will feel these rises the most. A large high street chain can shoulder a rate increase of between 25 and 30 per cent; an independent cafe or restaurant often can't. Such an increase, after all, could mean an extra bill of up to £15,000 for a mid-sized premises. That would be enough to close an independent pizza shop, but allow Pizza Express to survive. 

Of these independent businesses that are most threatened, at the top of the list are our grassroots music venues and nightclubs. Over the past ten years, 50 per cent of London's nightclubs have closed, along with 35 per cent of its music venues.

In fact, there have recently been some signs of recovery in the ecosystem. Last month, the Greater London Authority published a report that found there had been no net loss of venues in 2016, a first since 2007. A few new venues have even opened, including The Soundlounge in Tooting, Sankeys East in Romford and, at the end of March, Soul Store West in Kilburn.

Now this rates rise threatens to derail this progress. And there remains something rotten in the way we value these places: when assessing and calculating their rates, we don’t consider their cultural or economic value. These premises are the incubators of the sector, each investing £500,000 directly into new and emerging talent each year. And yet, unlike community centres and libraries, for example, little relief is offered that recognises the benefits these places and spaces bring to their communities. 

Indeed, instead of recognising this value, we are doing the opposite. Take The Lexington, in Islington. In the past, it's hosted many artists who you wouldn't have heard of at the time, but almost certainly would have now. Yet the value of the land the venue sits on has increased significantly, increasing the value of the property and thus its business rate. (It's a similar system to council tax.)


There's another penalty: rates recategorisation often means an increase in annual alcohol licence fees that can also run into thousands of pounds. Paying for that means selling more alcohol, which puts pressure on the businesses to stop providing the unprofitable live music aspect. And so The Lexington, instead of being a music venue and community asset, becomes a solely alcohol-led premises, similar to a chain pub or bar.

All this is compounded by the way that venues in London are being penalised for their success in regenerating its town centres. Cafe Oto opened at a time when Dalston town centre was not as desirable as it is now. Its contribution to the local community – along with those of many other businesses and entrepreneurs – has led to Dalston changing and becoming more desirable. Yet Cafe Oto and the like have not been recognised as agents of change and arbiters of community cohesion; instead, the work they've done merely means the land they sit on has become more expensive, and so their rates are going up.

There is no standard classification of music venues and nightclubs in the system by which we assess rateable value: they not categorised as a particular type of business, so their floor space is assessed not on its need to welcome an audience, but on its size and its capacity to sell enough alcohol to fill that space. Yes, venues and nightclubs often live or die on their ability to sell alcohol, but without the music – the culture – people wouldn’t be drinking that alcohol in the first place. Yet this is not recognised: their cultural value is ignored, and venues are made to pick up the tab in more ways the one.

It would be best if such places were assessed for what they are, rather than being lumped into a general categorisation that more often than not impacts them negatively. They should all pay business rates – this is the only way core services can be delivered – but increases in those rates should take account of their community benefit, and recognise their cultural value. 

If we don’t take a good hard look at how our classification and rating systems measures music venues and nightclubs – or cultural infrastructure in general – we  will lose these places. The recent spate of good news will disappear, and we’ll be back to hearing about venue closures in London and beyond.  

And the same argument applies to other sectors, too: if we don't recognise the value of independent cafes, there is a danger that rate rises will one day mean that Costa Coffee is the only place that'll sell you a flat white. 

The author would like to thank Niall Forde, the Music Venue Trust and Nordicity for support in writing this article. 

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Here’s how developers are getting out of building affordable homes

Yeah, you will never live here. Image: Getty.

Our housing crisis has been thrust into the spotlight in the worst way possible with the Grenfell Tower disaster. Hundreds have lost loved ones and many are without a home. While Shelter has been calling for those affected to be placed in good quality accommodation nearby, and hopes officials make good on their promise to do so, we know many local authorities simply don't have enough affordable homes.

The main reason for this desperate crisis? A generations-long failure of our housebuilding system to build enough homes that people on ordinary incomes can afford.

Over many years, house prices have continued to soar, while wages have stagnated. The average house price is now 7.6 times the average salary – it was about half that 20 years ago. 

Meanwhile, renters right across the country are having to shell out massive amounts of money every month to cover their rent, all for unstable, short-term contracts. And at the sharp end, homelessness is on the rise, with a shocking 255,000 people finding themselves without a home at the last count.

Today we rely on private housebuilders to build most of our homes. But as profit-driven organisations they are, perhaps understandably, not very good at building affordable homes.

A favoured, and perfectly legitimate way of building fewer affordable homes is through something called a “viability assessment”. When a housing developer gets planning permission they are normally required by the council to make a number of the homes they build officially "affordable". This number varies across the country but is usually between 30 to 50 per cent and developers will be aware of the requirement before they begin drawing up plans.

But the less affordable housing a developer builds, the more profit they could make – so the developer deploys the viability assessment. This allows them to go back to the council and say that the amount of affordable housing they originally agreed is no longer possible.


They’ll often blame changes in their costs or lower than anticipated house prices (as we’ve seen recently with the Battersea Power Station development), meaning they won’t make sufficient profits to build the number of affordable homes originally planned. Their case is strengthened by the fact the law was changed in 2012 to state that the developer must make “competitive returns” (in practice, 20 per cent profit) on the development.

The massive problem here is that we can’t scrutinise these really important decisions because – guess what? – the viability assessment is private. So affordable homes are being denied to people who really need them right across the country in this way, but local communities, journalists, campaigners and charities like Shelter are not being allowed to question it. And of course, it’s those people desperate for an affordable place to live who lose out.

It can be argued that developers are simply following the instinct of most private companies in being competitive and taking the opportunity to make more money. The real issue is that they are allowed to do it so easily in the first place, and keep it a secret.

The viability assessment should only be used when circumstances have made the council’s requirements literally impossible. And in such a case, it should be published so the public can scrutinise it. After all, in such an eventuality – what does anyone have to hide, right?

This issue is among many being discussed in the recent housing special from Channel 4’s Dispatches which looks at the challenges we face in ending the housing crisis.

We need to get tougher and plug this leak of affordable homes, but this is just one symptom of a housing system that is letting the whole nation down.

There are ways to solve this, based around getting land at a cheaper price. Until the government takes bold action to commit to a whole new way of building homes like this, it will be ordinary families who continue to carry the burden of our broken system.

Steve Akehurst is head of public affairs and campaigns at Shelter. Channel 4 Dispatches was broadcast on 10 July, at 8pm. This article previously appeared on our sister site, the Staggers.