75% of UK clubs, bars and music venues face bankruptcy

Clubs, bars, music and entertainment venues face bankruptcy if the government do not provide a solution for the £2.5 billion rent crisis threatening to close down nightlife.

Spiralling rent arrears could result in the closure of 75% of commercial rental spaces, including nightlife and music venues. In March, the government extended UK rent moratorium by three months until June 30.

The extension meant that no bailiff-enforced evictions are able to happen until May 31, while rent is partially covered by the government for struggling commercial properties. Despite this, many businesses across the UK are now unable to pay rent arrears and now face huge debts and possible bankruptcy.

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Thousands of clubs and venues have been closed since March 2020, with some having to close their doors for good during the last 15 months.

The Night Time Industries Association (NTIA) has warned that that if the government do not intervene now, thousands of jobs will also be lost.

REKOM UK's Peter Marks, operator of 42 UK nightclubs, says: “We have always recognised that landlords are victims alongside us operators in the Covid world, but to have full reparations even over time would shift all the cost on to beleaguered operators, many of whom would simply not survive, rendering any public money spent on support wasted.”

Tokyo Industries' Aaron Mellor, operator of 32 UK clubs, bars and festivals, says: "The pressure now is for UK Government to legislate on sector-specific rent arrears, unlike any other sector nightclubs have been prevented from legal operation since March 2020.

“Commercial leases already consider ‘suspension of rent’ clauses, where a property is not occupiable for insured or uninsured losses, this clause could be easily adapted by statute, a sharing of loss between landlord and tenant for the entire sectors onward protection. Mandatory 50% rent waivers for the effected period are needed. Codes of conduct do not work with institutional landlords.”

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Jeff Smith MP, Labour MP for Manchester Withington and Co-Chair of the All-Party Parliamentary Group for the Night Time Economy, says: “The Government needs to urgently consider potential solutions, such as a shared burden model, and loans to enable longer term debt restructuring. I would welcome the opportunity to work with the Government towards a solution that helps steer these businesses out of the precarious position they find themselves in.”

Michael Kill, Chief Executive of the NTIA, says: “Time is not on our side and business owners are continuing to take on further rent debt throughout this period of restrictions; this will inevitably compromise their future and the regeneration of the industry. This needs urgent Government intervention and will require the Government to bring forward a policy that allows tenants, landlords, and government to share the burden of debt from rent arrears.”

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By July, venues will be asked to pay back a seemingly unattainable sum in two to three quarters of rent arrears. A written plea was sent out today asking for the government to step in.

The Night Time Industries Association have proposed a ‘shared burden’ solution, where tenants and landlords come together with the government to contribute toward the debts in order to avoid mass eviction and bankruptcy, as well as an extension on business protections already in place.

Gemma Ross is Mixmag's Digital Intern, follow her on Twitter