The biggest barrier to getting these projects off the ground, says Mark Perry from the Plunkett Foundation charity, is not having enough community backing. “Interest from two or three people won’t work,” he says. “You need everyone’s input. In rural communities all sorts of people come out of the woodwork to help, including lawyers, architects and electricians. Use that expertise.”
Make sure it is a viable business
The business needs to break even, at least, if it is going to be sustainable. But to have a viable future and create funds that can be ploughed back into the business it needs to be capable of making a small profit.
Decide what type of ownership will work best
Each model of ownership, from co-operative to shared investorship, has different advantages. If you want to secure the long-term future of the pub and have a large number of supporters with limited funds, the co-operative model may work best, for example.
Seek advice
It can be a long, difficult and complicated process, so seeking legal guidance is essential. For other queries the Plunkett Foundation can help, or seek advice from groups that have succeeded. Pub is the Hub and the Campaign for Real Ale can also provide useful assistance.
Source funding
There are grants that you can apply for but many of these are localised – the Plunkett Foundation can help you source them. There are also specialist loan funders such as Co-operative and Community Finance that are geared up to lend to such businesses.
• For more details visit www.plunkett.co.uk
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United by a community - how locals can save a pub
25 June, 2009
A growing number of communities are refusing to stand by and watch their pubs go out of business. Claire Dodd looks at the villagers who are doing it for themselves
It’s mid-June and opening night at Shurlocks Inn. The Berkshire pub is full of local people who have watched three of the four pubs in Shurlock Row village close down over the years. But not this one.
They have refused to let it go the way of the others, and assembled around the bar tonight – looking shattered but delighted after a year-long fight to buy it and refurbish it – are the people who saved the pub. The group includes an airline pilot, a stewardess, a teacher, a bank manager, a graphic designer, a builder, a conference organiser, a scientist and a marketing professional; but after clubbing together and buying shares in the business they’re all publicans.
It sounds a little bit too good to be true doesn’t it? A little cheesy? Like the plot of a feel-good Sunday-night family drama?
But it is happening and, as more pubs are threatened with closure, communities are putting their foot down and doing something about it.
Community buy-outs of local services including shops, bus services and schools have been quietly going on in rural towns and villages for years. According to The Plunkett Foundation, a charity that promotes and supports co-operatives and social enterprises in rural communities worldwide, there are more than 200 community-owned shops in the UK.
But community pub buy-outs are something new. Currently, Plunkett estimates there are about 20. Those bought by small groups of locals are not included, so the figure is almost certainly higher, and it’s rising: in December villagers invested more than £150,000 and bought the Fisherman’s Arms near Coldstream in the Borders; and four friends clubbed together to buy the Buck Inn in Maunby, North Yorkshire, when that was threatened with closure in May.
Buying a pub
There are several ways a community can buy a business. Multiple shareholders such as those at the Shurlock Inn can form a company, or individuals can invest to preserve the business in a trust for the benefit of the community. Another option is to form a co-operative.
“Pubs are really interesting to us as they are an essential point of rural life,” says Plunkett Foundation information and communication manager Mike Perry.
“People are seeing the economic downturn as an opportunity to take control of some of the issues that have been affecting them over the past few years. Our enquiries from people looking to set up community pubs have risen in direct correlation with pub closures. We are seeing more communities consider the wider community ownership model, where members of the community are encouraged to become a shareholder and form a co-operative.”
Co-operative ownership of pubs looks set to gain popularity as cherished locals are threatened, but at the moment there is only one pub that has tried and tested the model and found it works.
Julian Ross is the chair of the co-operative that owns the Old Crown pub in Hesket Newmarket, Cumbria. A microbrewery previously belonging to the pub had already been bought by a co-operative of locals set up in 1999. In 2003, when the then-licensee wanted to retire, Ross floated the idea at the microbrewery’s AGM and got enough shareholders interested to buy the pub, setting a charge of £1,500 a share. Some people bought several shares, while others clubbed together or went without their holidays for a year to afford them.
Although the co-operative owns the building, it does not run the pub as the co-operative’s management committee recruited experienced tenants to do this. The tenants keep all profits, while the co-operative receives a market rent that it ploughs back into the business.
The future of the pub appears secure because, as a co-operative business, the site is only permitted to stop trading as a pub if 75 per cent of members agree – and that is unlikely to happen. Such has been the success of the project that Prince Charles has visited the pub three times as part of his work with Pub is the Hub.
“It took so much hard work to achieve,” says Ross, “but I think it’s about what it stands for. There’s a corporate steam roller flattening everything in its path. Everywhere you go, every town centre is the same, with the same shops, and you don’t really know if you’re in Loughborough or Leicester. I think that, in a tiny way, people saw us and thought they could do something about it.”
Struggling
But for every community that secures the future of their local, there is another that fails or is struggling. And the reasons why can be complicated.
For example, the Midmar Inn in the Aberdeenshire village of Midmar has been closed since September 2007 and the freehold owner wants to convert the building to housing. Locals formed the Friends of Midmar Inn Community Company and have been awarded the right to buy the pub under the Land Reform (Scotland) Act 2003. However, they can only do this should the owner sell – and at the moment it is not for sale.
For now company secretary Margot Kennedy is keeping a close eye on stories of communities that do succeed.
“If it comes on the market, we will have to set about raising funds to buy it,” she said. “In order to get grants we will have to embrace the idea of the pub serving multiple functions for the community. But we can do it. We can.”
How to save a pub
Readers' comments
Karen I think you mix up Breweries and Pubcos. In my experience Brewers still take a paternal interest in their pubs and tenants and the smaller the brewery the more likely this is. Ken NAson
Mary, your comment "you cannot accept the basic PRETENCE that the use of the tie inn its current form is killing the industry" is perfectly correct. Thank you for your honesty.
Mary, that is totally unfair. To my certain knowledge the only posts that are ommitted on this site are those that contain profanity and/or potentially libellous statements. The 3% of the trade that support Fairpint post on here all the time.
Its sad but true that this is on the increase. Brewery's aren't interested in pubs any longer that have been in communities for years. The landlord of my local is on the verge of bankruptcy and the brewery aren't interested about him or the pub. Al, they want is their rent and the extortionate of money they charge for beer etc. It's about time the government stepped in and did something to stop this. Otherwise there wont be any pubs left.
Mary, could you do me the greatest of honours? Could you explain to me, and everyone else here, using nothing more than facts, how the tie is killing the industry? Roughly 1 in 3 pubs are tied. Which means roughly 2 out of 3 aren't. And if your maths isn't good enough to work out that the tie affects only a minority of the trade, you don't deserve to be in business. The truth hurts Ed
Mary - who isn't allowed to post comments on this site? As far as I'm aware, anyone in the world with access to an internet connection and an email address can post a comment - as long as they keep it relatively clean? So one can only assume that all of these other people you talk about either don't exist or they are all sufferers of some strange variation of Tourettes syndrome that makes one swear via a keyboard?
Mary, you make incorrect assumptions regarding me and my thought processes. I know that the tie in it's present form is NOT affecting the industry as a whole only a part of the tied section which, is a minority of the whole industry. Those who call for the tie's removal continually attempt(as you have done in your post) to portray the tie as an industry wide problem. That is blatantly incorrect hence my speaking out against such statements and misleading propoganda. Now if you want to discuss the effect of the tie on the tied sector then that is a completely different matter. Unfortunately that discussion would have to be carried out with an admission by the anti tie brigade that they willingly entered into a contractual agreement to be tied for their stock at prices to be determined by their landlords and that that is what their landlords are doing. They entered that agreement with full knowledge and without duress. Once that has been sorted then sensible discussion can be caried out as to whre the tie fails and succeds and what has to be done to improve it for both parties advantage. Ken Nason
ken there are more viewpoints on rental valutions, fmts, utilities, red tape etc but you cannot accept the basic pretence that the uae of the tie inn its current form is killing the industry and stifling competition. It is noice that yours and steves view get an airing, just a shame that many other posters dont get there views alloewd on this site.Rest assured that alot more is going on than just whinging about the tie.
Regarding the original thread, I think it's fantastic when a diverse group of people get together to buy something like their local pub - that's what a community is supposed to be about but it's regrettably rare. Sadly, I think it can very often be driven by the wrong motivations, as no matter what their reasons for saving the pub (almost certainly emotional), it has to be able to pay its way; if one licensee couldn't make it pay then how will 30 (once the novelty has worn off and the inevitable squabbling amongst so many 'hands on' shareholders starts)?
Around 1/3 are tied but, of these, there are probably only around 20% (absolute maximum?) who have any major issues with their tied agreement (other than the usual grunts about being tied in itself, which they clearly cannot whinge about)? That means that all of the so-called 'disgruntled' licensees represent around 6% of the total pub market - THAT's more like a true representation of the UK pub market's problems with the tie. Even if I'm being conservative with my figures, it can't be anymore than around 15% of the total market. There is a minority of publicans making the public think we're all doom & gloom whingers - no wonder some customers prefer to spend their money elsewhere!
How have you not got it yet? Approx 1/3 pubs are tied - 2/3 are not! It seems you want facts unless they disagree with you. Even two tied licensees can't agree on how many are tied, yet ask those who remain rational and impartial and the same answer comes up - around 1/3. You'll never learn, will you?
Mary you have just proved my point in that you appear to have only one viewpoint, one solution(ban the tie) and see nothing other than that. I have already outlined one initiative that is available how many other than remove the tie have you discovered/ Ken Nason
Ken, i would have thought that the tied sector being roughly 50% is something worth speaking out about don't you? I am all for community pubs in fact i suggest that the pubco sell all their stock today and then we can have real competitive community pubs again.
Graham A. Come on , time for you to wake up and smell something, how about facts and the truth. How does everything relate to the tie when only around 35/40% of the countries pubs are tied leases. As usual , sites like this one which are offered generously free of charge by the hosting paper are abused by the minority who try to high-jack every topic towards an issue that effects less than half the industry.
Gentlrmen this topic is not about Pubcos or the tie and affects the whole spectrum of the trade. You really have to broaden your horizons to appreciate your own problems in the context of the trade as a whole. Not all rural businesses are failing because of the tie conditions. Until myou accept that basic fact you will find it hard to get support or sympathy from over half of the trade. Then again you could just stay bored. Ken Nason
Ken the reason licensees comment on every topic is because it is all related to the tie and the machine income. Wake up and smell the coffee.
Ken I really wish that you woul stop going on about us tied licensees. You are becoming rather boring.
I really wish that those people who have a grievance would stop applying their personal viewpoint of Pubcos on every topic. This has nothing to do with tied pubs and if they read it before tapping the keyboard they would realise this but hey there is nothing else in the trade for these narrow minders that their Pubco is there? I attended a meeting at Hereford council offices a few days ago where the initiatives available to support and save local pubs and businesses were outlined for those involved in rural community life. The Plunkett foundation was only one of them and a fundimental change in financing of community financing of buyouts via Parish Council involvement has been facilitated by a change in local government funding for worthy projects. So go speak to your Parish Council and they will give you details. Ken Nason
Only buy free-of tie with an independent landlord, or better still a freehold. Stay well clear of the pubcos.
Ali best advice anyone could give. Please stay clear, if not they will bleed you dry.
Best advice, do not take on a tied pubco lease. If you do, you will regret it. They are sharks.