Are ACVs an asset to the pub trade?

By Liam Coleman contact

- Last updated on GMT

Old Cock: The licensee of the Otley pub was not happy about the site being ACV listed
Old Cock: The licensee of the Otley pub was not happy about the site being ACV listed

Related tags: Pub, Greg mulholland, Leeds north west

With the law around assets of community value set to be reviewed. Here’s what the industry needs to do to make the legislation of real value to pubs.

When it came into effect, the fact that pubs could be listed as an asset of community value (ACV) was a chance to protect beloved community pubs. Here it was enshrined in law that sites, which “further the social wellbeing and interests of the local community”, would be protected from predatory developers. No longer would a pub with centuries of history in London be picked off by developers and turned into flats.

The sad fact is that it hasn’t worked out that way. In the time since the legislation became law, it has been called everything from “weak” to “flawed” by figures in the pub trade featured below.

However, the Government is now reviewing the Localism Act – the legislation that brought with it the chance for pubs to be listed as ACVs. This means that ACVs could finally be something of value to the pub trade.

“I made it clear when the ACV system came in that it was actually fairly weak,” says Liberal Democrat MP Greg Mulholland, who chairs the British Pub Confederation.

Mulholland feels that the legislation is feeble because there are still cases where successful pubs valuable to the community are converted into houses or supermarkets. “Until we have a situation where communities have a say over things and predatory purchasing is discouraged then pubs clearly don’t have adequate protection because we are losing wanted and profitable pubs in this country every month.”

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Despite this, Mulholland used the ACV legislation in early 2015 to protect the pubs of Otley, a historic Yorkshire pub town in his constituency. The MP for Leeds North West, alongside the Otley Pub Club, successfully passed a blanket listing of all 19 of the town’s pubs.

This now means that permitted development rights have been removed from Otley pubs and if a developer wishes to buy an Otley pub, the community has six months to raise funds and submit a rival bid. Mulholland says the result is that all 19 pubs have remained as pubs since the blanket listing. However, the owners of listed pubs have no say as to whether the site is listed as an ACV or not and they are not all delighted to see their site given this designated protection.

Lee Pullan, licensee of the Old Cock in Otley, was livid when his pub was listed as an ACV because he now feels restricted in his ownership of the site. The ACV listing has put a ‘restrictive covenant’ on the premises, which now means that the owners of the site would have to get approval from Leeds City Council and may be delayed in selling the pub if they do decide to sell. “I don’t think a restrictive covenant is the right way to go about it because it can affect a business,” Pullan says.

Furthermore, he feels that listing the site as an ACV is overstating its history and thus a misuse of the legislation because the Old Cock has only been a pub for just over six years: “A blanket listing goes against the whole principle of ACV. It’s supposed to save the last pub in the village or a historic old pub that Cromwell’s men marched through.”

For this reason, the British Beer & Pub Association (BBPA) is calling for better guidance for councils as a result of the review so that the legislation is used more appropriately – for pubs that genuinely are an asset to the local community. “What we have asked for is a bit more guidance for local authorities,” the BBPA’s chief executive Brigid Simmonds says.

“I have had a number of members write to me saying that their pub has been listed as an asset of community value and they weren’t consulted at all about the listing or asked to give any opinion [by the local authority]. They never had any intention of selling their pub or doing anything to their pub but that can then have an effect on the value of the property,” she said.

Pullan agrees that being listed as an ACV has devalued his property and therefore feels that councils need to be better guided on granting sites ACV status. “The fact that there is a restrictive covenant on the site would mean that I would be at a loss [were I to sell]. If a landlord is struggling and the business is gone, the last thing he needs is six months where he can’t do anything with the business and is still paying the bills. It could send the landlord bankrupt,” he adds.

Beyond this, there are no two ways about it. Listing pubs as an ACV is expensive; it is estimated that each pub listed as an ACV costs the council in excess of £1,000. This is worthwhile if it is in a situation where the ACV status will save a pub and the community is serious about raising to buy the money to buy the pub if need be, but is merely a waste of council money otherwise.

It is clear that listing a pub as an ACV can stave off lurking developers that are just waiting to turn the pub into flats. Yet, like all legislation, it is going through a teething stage as it balances on the tightrope of keeping all parties happy.

This is what the Government needs to keep in mind as it considers the successes and pitfalls of both the Localism Act and the current use of ACV status for pubs. If the current flaws in the legislation are ironed out then ACVs truly can be an asset of value for pubs.

What ACV status means

  • Removal of permitted development rights for change of use and demolition – owners seeking to change a pub’s planning use, class or to demolish it must allow the community and customers of the pub to comment
  • Material planning consideration – ACV status can be used by the council as a reason for refusing planning permission for change of use or demolition
  • Community right to bid – the local community has six months to raise funds and submit a bid to buy an ACV for community use
  • Compulsory purchase rights – an ACV-registered building can be compulsorily purchased by the local authority or council if it is under threat and the result would be a long-term loss to the community

Related topics: Property law

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