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. 

Want more of this stuff? Follow CityMetric on Twitter or Facebook.

 
 
 
 

Councils are failing to protect tenants from bullying landlords

Rental properties in Coventry. Image: Getty.

If your rented home has a broken boiler, mould growing up the wall, or a kitchen that’s falling apart, you won’t be surprised to learn that it’s not unusual. But it’s by no means acceptable: serious defects in the home can harm your health, so the law rightly requires landlords to keep their properties free of them.

Nevertheless, one in seven private rented homes has at least one severe hazard, and is classed as unsafe. That’s more than 600,000 households spending a large portion of their income on something that could make them ill.

Councils have responsibility for enforcing standards in the private rented sector. If environmental health officers find hazards on inspections of rented homes, they can take enforcement action, such as serving an improvement notice on the landlord, who is then compelled to carry out repairs. Failure to comply can result in prosecution, or, since 2017, a civil penalty of up to £30,000.

Yet most councils are not using their powers. Generation Rent made Freedom of Information requests to 102 of the councils with the largest private renter populations. Just 78 reported the Category 1 (severe) hazards they found in 2017-18 – a total of 12,592 of them. But in the same period, these councils served only 2,545 improvement notices – so only 21 per cent of landlords with unsafe homes were forced to do anything about it.

Just eight councils had a ratio of improvement notices to Category 1 hazards of more than 75 per cent, and five appear to have issued no improvement notices in the whole 12-month period.

Some councils tell us that taking informal action – such as sending warning letters and “hazard awareness notices” – is usually enough to convince landlords to make repairs before they need to reach for an improvement notice, which involves more staff time. But this pragmatic approach means that tenants are left exposed to a retaliatory eviction.

Because landlords can evict tenants without needing a reason – under Section 21 of the 1988 Housing Act – many use this to intimidate tenants into putting up with unsafe conditions. In 2015 Parliament passed the Deregulation Act which makes a Section 21 notice invalid if the council has served an improvement notice for severe hazards.

Our data show that only a handful of councils are reliably providing tenants with this protection. If councils aren’t routinely using their powers then tenants will continue to be cowed into silence.

This week a new law comes into force which goes some way to addressing this lack of support. The Homes (Fitness for Human Habitation) Act 2018 gives people starting tenancies from Wednesday onwards the ability to take negligent landlords to court over hazardous conditions. As well as forcing landlords to carry out repairs without relying on councils – which are, after all, experiencing deep budget cuts – courts can also award compensation to the tenant.

But unlike council-issued enforcement notices, the Homes Act does not protect plaintiffs from the no-fault eviction notice their landlord might issue in response. While compensation would be incentive enough for some to take action, there is a risk that any award would be swallowed up in the costs of moving home.

You’re much more likely to have a squalid home if you are on a low income, so the threat of having to find a new home when you have negligible savings is a potent one. Rather than rely on the Deregulation Act, tenants need to have basic assurance that they won’t be evicted for no good reason. Abolishing Section 21 would mean landlords would need valid grounds for eviction, so they couldn’t simply hang the threat of a forced move over tenants living in damp, draughty conditions. This – along with restrictions on rent increases, that other weapon of intimidation in criminal landlords’ armoury – would finally give renters confidence to exercise their rights.

Last summer the government consulted on a proposal for three-year tenancies, which would be a step forward in preventing retaliatory evictions, albeit only within the fixed term. We are still awaiting ministers’ decision on the next steps, but pressure is building across the political spectrum. On Saturday, the conservative Centre for Social Justice joined the growing chorus to scrap Section 21. Without reforming tenancy law substantially, the government can expect bullying of tenants to continue and the number of unsafe homes to remain stubbornly high.

Dan Wilson Craw is director of Generation Rent.

Want more of this stuff? Follow CityMetric on Twitter or Facebook.