Public Houses Or Public Assets?

2nd July 2013

There has been a fanfare in the press about recent planning changes, the Government very proud of its plans and general commitment to freeing the country and the economy from the strangling red tape of the planning system they say has been created by politicians gone by.

The average publican may be unaware of the implications of the changes, still reeling from the effects of the smoking ban and grappling with other more pressing operational issues. But a number of changes will have an impact both on the value and the future disposability of pubic houses and other licensed premises.

The Localism Act, 2011, introduced ‘assets of community value’. In a response to what it described as a reaction against Governments ‘hoarding power’, The Localism Act gives communities the ‘right to bid’. Essentially, every community (village, town or neighbourhood) contains amenities which play an important role in local life, the loss of which would have a great impact upon the vitality of that community. The Act requires each Local Authority to maintain a list of assets of community value, and places a restriction on the owners of that asset, which may be a pub, shop, library or other community facility, when it comes to the sale or disposal of it. The intention is to give communities the opportunity to bid for it and ensure its retention. The obvious application of the new law is the village pub.

Recent years have seen an increase in groups of local residents / communities buying public houses and running them in order to retain them for the future of their neighbourhoods. Whilst this will no doubt in certain circumstances bring about a range of disputes common with multiple ownership, moreso when they lie within areas where it is felt that the asset ‘belongs’ to the communities in which they are located, by and large it can be a successful way to keep a village pub going. The ‘right to buy’ is intended to give power to local communities wishing to keep their pubs open.

On the other hand, recent changes in Permitted Development rights relating to commercial use classes – creating ‘flexible uses’ will not prevent the loss of public houses to other uses. A commercial building (within use classes A1, A2, A3, A4, A5, B1, D1 and D2), meeting certain criteria, may now change to either a shop, office or restaurant / café (use classes A1, A2, A3 or B1). Due to the way in which the Use Classes Order works, the changes permitted do not work both ways. A pub changing to a shop or restaurant cannot then change back to a pub without the benefit of full planning permission.

Many owners of rural pubs will be aware that it can be very difficult to obtain planning permission for alternative uses, including residential. Planning policies have for some time existed to protect the few remaining services and facilities within our smaller village communities. The National Planning Policy Framework, published in March last year replacing a substantial volume of planning policy and guidance, continues this theme, urging Local Planning Authorities to “promote the retention and development of local services and community facilities in villages, such as local shops, meeting places, sports venues, cultural buildings, public houses and places of worship”. A range of information will be needed in some cases to support any loss of a community facility such as a public house, and with a community right to bid system in place communities are far more empowered in the current system than ever before should they wish to prevent the loss of ‘their’ local pub! It has never been so important to obtain the right advice prior to disposal or re-use, both in terms of legal / agency advice and planning.

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