Music venues and clubs warn of mass closures after government spring budget revealed

Music venues and clubs have warned of the continual threat they face in the aftermath of the UK government’s reveal of the spring budget.

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Both the Music Venue Trust (MVT) and the Night Time Industries Association (NTIA) have said that the government has failed to consider the threats to the night-time economy as the sector struggles to recover amid Covid-enforced closures and the cost of living crisis. The associations have previously called upon the government to help venues by offering support to pay their energy bills and a reduction in business rates.

In a new statement, the MVT pointed out that the government’s tax relief plans for theatres, orchestras, art galleries and museums exclude grassroots music venues. It warned, as it had previously, that one grassroots venue is permanently closing its doors a week, adding that “the failure to act on energy bills” will “inevitably” mean 2023 will be the worst year for closures since the Music Venue Trust’s creation in 2014.

So far in 2023, venues such as Sunbird Records in Darwen and Ironworks in Inverness have already permanently shut their doors.

Elsewhere in their statement, the MVT said: “The budget was an opportunity to ensure that this number of closures did not explode from the April 1st when Grassroot Music Venues will be hit by excessive and unaffordable energy bills. The Chancellor has failed to respond to the evidence we submitted. There is no additional support for music venues and the inevitable result will be mass closures of venues.”

“We note that, as per the last 5 years of budgets, significant opportunities to support the Grassroots Music Venue sector have been overlooked. This network of venues across the country is a prime opportunity to improve productivity, enhance local jobs, and support struggling communities.

“We welcome the support for theatres, museums, art galleries and orchestras, but once again we note that all of the Chancellor’s announcements on tax relief for these sectors exclude Grassroots Music Venues and artists. We also note that the opportunities to support research and development in this sector has been once again missed; the R&D tax reliefs announced are not relevant to the Grassroots Music Venue sector.

‌The MVT continued: “We remain keen to work with the Government to unlock the opportunity that the Grassroots Music Venue sector presents. We hope that in the near future a budget statement will be made that recognizes and acknowledges the economic, cultural and community opportunity these venues present.

“Regrettably, the failure to act on energy bills must inevitably mean that 2023 will be the worst year for closures since the creation of Music Venue Trust in 2014. In the absence of any action to this challenge by the Government we will once again be reaching out to the energy supply companies to try to avert closures. It is plainly in no one’s interest to allow buildings that house Grassroots Music Venues to become abandoned as the cost of energy needed to open those spaces to the public and performers cannot be met by any venue operator.”

Meanwhile, Michael Kill, NTIA CEO, said: “While we welcome the news on draught beer and fuel duty, this Government continues to overlook thousands of independent businesses, including nightclubs, venues, festivals, events, theatres, casinos, suppliers, and millions of employees and freelancers across the Night Time Economy. This budget has not gone far enough and will, without doubt, see a huge swathe of SMEs and independent businesses continue to struggle financially or disappear in the coming months.

“They are continually having to firefight crisis after crisis, from onerous operating costs to rail strikes, supply chain issues and workforce shortages, and no meaningful support to stem the immediate situation.”

Kill continued: “The lack of clarity on corporation tax thresholds and the extension of the Energy Relief Scheme will be subject to further details being announced by the Government. This follows the letter to the Government yesterday from the energy regulator OFGEM, highlighting the flaws in the scheme and how it impacts businesses, as energy companies profiteer from the most vulnerable sectors, with inflated security deposits, energy rates and uncapped service charges.”

“Without the reduction in VAT, many of these businesses will have to consider their future, which will have a devastating impact on local communities, families and individuals who have committed their lives and livelihoods to this sector.”

Grassroots venues have previously said that they face a “perfect storm” from the cost of living crisis, Brexit, cancelled shows and music fans’ last minute decisions on showing up.

Earlier this year, the MVT spoke in the Houses of Parliament to mark Independent Venue Week, where CEO Mark Davyd warned that venues were “going over a cliff”.

“This sector is really seriously in trouble,” he said. “With £500million of turnover, that’s £499million in costs and a a 0.2 per cent profit margin. It’s not sustainable. There are 177,000 events happening, but it’s down 16.7 per cent. We used to do an average of 4.2 events per week at these venues, and we’re now down to 3.5.”

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