It’s not been a good year to be running a pub and despite the route for the country to get out of lockdown – and hopefully not go back into it – being mapped out, there are fears many pubs could close permanently.
The same is true for community hubs, theatres and sporting organisations, hit hard by people being ordered to stay at home and their doors being closed.
But there is a ray of good news. Chancellor Rishi Sunak’s announcement of a £150million Community Ownership Fund in last week’s Budget was a largely unexpected one.
It means communities have been given a financial lifeline to protect their favourite local pub or sports ground from being sold for housing or going bust.
Silks on the Downs has been closed since March 2020 but the community are now trying to buy it for £500,000
He said: ‘Whilst local assets around the UK have been at risk of vanishing over recent decades, history has shown that community groups can run them successfully when given the chance, the hardest part has been raising the cash needed to buy them before it’s too late.’
The creation of the fund was welcomed by the Plunkett Foundation, a charity that advises and supports groups on how to run community businesses.
Chris Cowcher, head of community business at the Plunkett Foundation, says: ‘Plunkett is really positive and pleased to see that community ownership and empowerment will be essential in the recovery beyond Covid.
‘As a charity that’s worked in this space in over a century we recognised that co-operatives and community businesses really offer a new way to come together to safeguard businesses. If this community fund can add stimulus UK wide, then that is good news.
‘Obviously, we are aware that £150m over four nations over four years will water down the initial impact – but we welcome it and hope to be involved in helping to shape how that fund is distributed out. Many grass routes organisations will benefit from it.’
Here, This is Money talks to three people involved in saving their community pubs to find out how the launch of this new fund in the summer will help them in their endeavours.
We’re trying to raise £500,000
Silks on the Downs near Marlborough, Wiltshire, has been closed since March 2020 with no plans to re-open.
But the owner approached the community to see if they were keen on buying it and there are now plans afoot to do so.
Stuart Williamson chairperson of the Ogbourne Community Pub Society, which currently represents 14 people from the parish purchasing the pub, says the group needs to raise a total of £500,000.
So far the Ogbourne Community Pub Society has raised £50,000 to buy the pub but they hope to raise a further £240,000 and then apply for funding through the COF
‘That includes us the ability to buy the property, renovate it, stock it, bring it back to life – give it TLC – and do some reformatting inside the pub.
I think it should be handled by independent organisations that have a more flexible and expert approach than government that can help identify those who need it. It mustn’t be another piece of Whitehall bureaucracy
Danny Kruger MP for the Devizes Constituency
‘We will have more than just bricks and mortar.
‘We will have great food, a fantastic environment and, importantly, we want to do things to support wider community so we could have a shop, let people get together in it or run a coffee shop during the day.’
So far, the society has raised £50,000 but the hope is that the community share offering, which is now open, will raise £240,000.
The rest, they hope, will come from the government’s COF and further fundraising efforts.
Williamson says: ‘The Chancellor’s announcement was music to our ears.
‘This could mean the difference between borrowing money to achieve our target and digging in our own pocket – it could enable us to get in debt free.’
How does Community Ownership Fund work?
Community groups will be given up to £250,000 to help their struggling pubs in the area and in exceptional cases up to £1million matched funding will be available to help establish community owned sports clubs or sports grounds that are at risk of loss from the community.
It’s not only pubs that are eligible for the fund which will be opened up in the summer. Communities will also be allowed to invest and protect assets such as theatres, shops or local sports clubs.
Chancellor Rishi Sunak says: ‘Pubs and sports clubs are the heart and soul of our local towns and villages – they’re the glue that keeps us together.
‘This fund will help to ensure vital local institutions aren’t lost to those who treasure them most.’
Last year, Chancellor Rishi Sunak launched Eat Out to Help Out to aid struggling pubs and restaurants. This time around he’s hoping communities will get involved through the £150m Community Ownership Fund
How we saved Guilden Morden’s village pub
The £150million COF has come too late for some community-owned pubs such as the Three Tuns in Guilden Morden, Cambridgeshire, but that’s because they have already rescued their valued public houses.
John Harrison, chairman of Guilden Morden Community Pub Ltd owners of the pub says: ‘We would’ve loved it if we could’ve had that deal but we’re already beyond that stage.’
The community bought the pub in November 2018 after it had been closed for six years.
They spent six months refurbishing it and leased it to tenants who opened it again in 2019.
Harrison says the total cost in buying the pub was in excess of £400,000.
He says: ‘We raised £250,000 in share issue and got £100,000 in half loan and half grant and then borrowed the rest. We borrowed the rest from Co-operative & Community Finance.’
The community of Guilden Morden bought The Three Tuns back in 2018 and spent six months refurbishing it after it had been closed for six years
When asked for his advice to other communities considering a community share offer to buy a pub, Harrison says he supports the tenanted route: ‘From our point of view having an experienced tenant who was well aligned with community objectives was really helpful.
‘If we’d tried to run the pub ourselves with all that was going on it would’ve been really tough.
‘The choice of tenant is also very important. We were fortunate in that the couple who runs the pub for us are very open and co-operative and they are keen for the pub to be the heart of the community.’
John Harrison, chairman of Guilden Morden Community Pub Ltd, which now owns The Three Tuns believes the best way to run a pub is to outsource the management to an experienced pub manager
We’re trying to save the last pub in our area
The Anchor Inn in the village of Mistley, Essex, is its last remaining pub, and the owner has put it up for sale for £425,000.
However, locals calling themselves ‘Friends of the Mistley Anchor Working Group’ are on a mission to revive the ailing pub, which has traded for at least 150 years.
Hannah Saverymuttu, the marketing manager of Friends of the Mistley Anchor, says: ‘It’s very early days – our Just Giving page has only been live for a fortnight.
‘We’ve raised over £1,000 from donations. But we want to switch from pure donation model to selling community shares.
John Short, company secretary of the Friends of the Mistley Anchor and his wife Sarah Short distributed ‘Your pub needs you’ leaflets to get the community involved in buying the pub
An aerial shot of The Anchor Inn. It’s located in an area of outstanding beauty
‘Within the village we have a few community spots like a hall but, besides that, we don’t have any other places to go.
What are community shares?
Community shares can be issued by community benefit societies registered (but not regulated by) the Financial Conduct Authority (FCA).
Community benefit societies are created to serve the broader interest of the community and may be formed to buy struggling pubs, libraries, and other local businesses.
The shares are not transferrable – meaning they can’t be sold to another buyer.
They can be withdrawn, but this is often subject to terms and conditions, for example, some state you can’t withdraw shares in the first three years.
You may get a financial return. Vidhya Alakeson, chief executive of Power to Change, explains: ‘It’s usually no more than a three per cent return on an annual basis but in the current environment that’s not too bad.
‘For many people, community share returns do look more attractive. You may not get the returns immediately.’
‘We want to create a community hub in the pub. We’ve got artists and musicians to support as well.’
Saverymuttu adds that the group will be applying for funds from the COF but is awaiting further details.
She says: ‘Details have yet to come out on exactly how it will work but we will be applying.
‘We may take out a loan, but this depends on how the community share offering goes.’
How will this be managed?
It’s not yet clear how the COF will be managed but there are calls for it to be operated by charities and organisations on the ground like Power to Change or the Plunkett Foundation.
Danny Kruger, MP for the Devizes Constituency, says: ‘The economy we need to build is one in which community owned business plays a role as we want a more sustainable economy.
‘Businesses that are accountable to people – they serve can to create that. It’s not the only model but it’s very powerful one.
‘I hope it [the COF] can be expanded significantly in years to come. It’s really about how it’s used, who manages it and the kinds of businesses it supports.
‘I think it should be handled by independent organisations that have a more flexible and expert approach than government that can help identify those who need it. It mustn’t be another piece of Whitehall bureaucracy.’
What is a community pub?
A community pub a business owned and controlled by a large number of people from within the community. Besides creating sustainable operation these communities also ensure that the businesses serve the communities in the area.
Community pubs are owned by members – commonly referred to as shareholders. Communities generally have to raise a lot of money to successfully acquire the ailing business. The average cost of purchasing a community pub, according to the Plunkett Foundation, was £306,000 back in 2019.
Most community pubs have a successful track record. No community pubs ceased trading or transferred out of community control into private ownership during 2019, maintaining an impressive survival rate of 100%.
The latest figures from the Plunkett Foundation for 2021 reveal that there are 150 community managed pubs cross the UK. The organisation is currently supporting 250 community groups that are keen on saving pubs through community ownership.
The charity says there has been a steady increase in communities getting together to rescue pubs through joint ownership. According to the Plunkett Foundation’s ‘More than a Pub’ project the community pub movement has grown by 50 per cent since 2015.
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