21 grassroots music venues could close due to business rates increases

11 April 2017
  • At least 14,000 performance opportunities by emerging artists could be cut
  • Hundreds of jobs under threat
  • London’s cinemas are also being hit with increased charges
  • 100 Club among venues facing crippling rate rises

Twenty-one of London’s much-loved grassroots music venues are at risk of closure due to business rates increases according to shocking new research commissioned by the Mayor of London, Sadiq Khan.

A further 18 of London’s 94 grassroots music venues are expected to experience significant financial challenges. In total, these 39 venues account for up to 530 jobs and generate up to £21.5m for the capital’s economy.

On top of this, an additional 23 venues are at risk of having to cut the number of new artists they book, instead opting to put on safer, more-established artists that generate higher sales.

Overall, this reduction could eliminate at least 14,000 emerging-artist performances annually and have a knock-on effect for the music industry, reducing the opportunities for new and emerging talent in London.  

This comes just as London’s grassroots venues are getting back on their feet. After ten years of decline, 2016 was the first time that the number of venues across the capital remained stable.

The research, compiled for the Mayor by Nordicity, reveals that the total business rates bill for music venues rose overnight by 26 per cent when the new charges came into effect on 1 April - from £3.2m to £4m. Approximately one-third of grassroots music venues have seen their annual business rates increase by £10,000 or more.

Venues most at risk include the Lexington and the Macbeth, both in Islington.

In addition, research from the UK Cinema Association suggest that on average, London’s cinemas face being hit by a 25 per cent business rate increase.

While the Mayor has welcomed plans to alleviate the impact of the increases announced by the Chancellor in the recent Budget, he does not believe they go anywhere near far enough.

He is calling on the Valuation Office Agency to review its valuation policy for grassroots music venues. This is because the way business rates are calculated puts grassroots music venues at high risk as they need large buildings in town and city centre locations – where property prices have particularly soared.

With hardly any grassroots venues making enough profit to absorb the rates increase, Sadiq believes they should be protected as they play a vital social, cultural and economic role for London and the UK.

The Mayor will also be encouraging the 33 London billing authorities to ensure a share of  the £72.5 million of funding they will receive in 2017-18 from the Government to offer locally determined business rates reliefs is prioritised for cultural businesses, such as grassroots music venues.

In addition, he is asking the Department for Communities and Local Government (DCLG) to hold an urgent meeting with his Night Czar, Amy Lamé, and the music industry to address the impact of business rates rises on the survival of music venues.

The Mayor also believes that business rates should be fully devolved to London so that he, like the devolved administrations of Scotland, Wales and Northern Ireland, can act in the interests of Londoners and their businesses.

Sadiq has today highlighted the plight of a music venue and an independent cinema that are going to struggle to make ends meet due to increased business rates.

One grassroots music venue facing a huge rise in their business rates is The 100 Club in Oxford Street, one of the most famous independent venues still standing in Britain. Their national non-domestic rates bill has increased this year by around £20,000 or more than 40 per cent.

The club opened its doors in 1948 and has hosted performances from the Rolling Stones, Kings of Leon, Sex Pistol and Primal Screen.

Owner Jeff Horton said: “The impact of this on grassroots music venues is going to be huge and will make it very hard for many to survive. It is becoming harder and harder to run a normal business around here and we keep having to think of different ways to generate revenue.

“London is one of the most visited cities on the world and people come here because of our incredible arts and cultural heritage. If that falls off a cliff edge, everyone will suffer. I am not sure the Government realise the damage they are doing with these business rates increases. Venues like us need to be looked at like an asset of the community like in Berlin.

“We can’t just leave the area because this venue is part of who we are and everyone will know it is just not the same place. People come here from all over the world. Places like this are priceless when it comes to our economy and culture. I worry about where the new up-and coming bands are going to come from – if you look at the major festivals it is often the veteran bands who headline them and that is partially because there aren’t as many grassroots music venues that nurture talent as there used to be.”

Tyrone Walker-Hebborn, the Director of the Genesis Cinema on Mile End Road, is also fearful about the impact business rates will have on his venue and other small, independent cinemas in London. 

The Genesis first opened in 1999 and shows mainstream, arthouse and world cinema. It also hosts creative events such as comedy and a gallery for new and emerging film-makers and artists.

Tyrone said: “We are going to see a sharp increase and it will have to come straight off our bottom line. We try and keep prices as low as possible so we can best serve the community and make the cinema accessible for all.

“It is inevitable that we will have to increase our prices – there isn’t much else that we can do. It is going to be really tough – this is a business we love and it is an important part of the community. We love what we do here but we have to look after ourselves.”

Sadiq Khan said: “London’s grassroots music venues are the foundation of the UK’s world-leading music industry, providing a vital talent pipeline for the artists and stars of tomorrow.

“Music venues are often the place where risks are taken on new artists and cultural innovation happens. They are the main platform for new and emerging artists and for the music industry to spot and recruit the next generation of talent.

“The way in which the business rates are evaluated for London’s grassroots music venues doesn’t make sense – it is completely unfair to bill a business based on the size of its building and not to take its profits into account. At the very least, I want to see Transitional Rate Relief being prioritised for small businesses like grassroots music venues, which contribute so much to London’s reputation as a powerhouse for culture and music.”

Night Czar, Amy Lamé said: “As London’s Night Czar and the chair of the London Music Board, I’m deeply committed to protecting live music venues across the capital. Over the past few years we’ve lost too many of these amazing venues so it’s vital that we act now to protect the ones we have and to encourage new places to open. We’ve just reached a point where we’ve stemmed the flow of closures and now these precious venues are facing rising business rates bill, adding another blow to their survival.

“In my first three months as Night Czar, I’ve had the pleasure of meeting many venue owners, developers and local authorities to see how we can work together and I’ve been encouraged by the conversations I’ve had so far. We will do all we can to safeguard their future so they can continue to make London the amazing musical hotbed that it is. This requires urgent action and I will be looking to meet DCLG along with music venue owners to address these issues head on.”

Philip Kolvin QC, Chair of the Night Time Commission said: “As Londoners who care about our city, we have to face up to the fact that venues which are critical to the culture, diversity and reputation of our city could be priced into extinction. If we value those businesses which bring joy and individuality to our urban fabric, we must take action to protect them. They should not be punished for economic factors beyond their control, and as a society we should intervene to protect them from market imbalance. The system of rates benefits online businesses over high street enterprises, so as long as we care about the vibrancy of our high streets we should work to redress the disparity. I hope that local authorities and national government will do all they can, before further of London’s brilliant arts venues are culled to the detriment of Londoners as a whole.”

Phil Clapp, CEO of UK Cinema Association: “In common with other businesses, London cinemas expect to pay their fair share of business rates. But the massive increases that a number are facing from this year will inevitably mean that they are less able to invest in their sites and staff, potentially damaging the service they are able to provide local communities.”

Since being elected in May last year, the Mayor has appointed Amy Lamé as Night Czar to act as a champion of the night time economy, develop a vision of London as a 24-hour city and a roadmap of how this vision will be delivered. Amy chairs the London Music Board, a body set up in April 2016 as a response to a rescue plan for London’s grassroots music venues.  The London Music Board brings together representatives from the music industry, government, tourism, culture and education and oversees how the Rescue Plan will be put into practice. The board recently published a report which shows that the number of grassroots music venues in the capital has remained stable for the first time since 2007, with 94 venues currently operating in London. The report also emphasises that, although good progress has been made in tackling the challenges facing grassroots music venues, there is still lots to be done in order to sustain the capital as a music powerhouse.

Sadiq has also appointed Philip Kolvin QC, the lawyer who acted on behalf of nightclub Fabric, as Chair of the Night Time Commission. Together, Philip and Amy will work together to facilitate dialogue between local authorities, the Metropolitan Police, venue and business owners, developers and members of the public – ensuring everyone benefits from London as a 24 hour city and that the contribution of live music venues towards the capital’s unique character is recognised.


Notes to editors

The full report from Nordicity can be accessed here.

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