UK: Business Rates Increase, New Scottish Festival

UK Business Rates Increase: ‘The Last Thing You Want’

The UK music industry had been lobbying the government to drop its planned increase in business rates next year. Now that the new budget has been announced, the industry feels short-changed.

The last business rates increase in the UK came into effect in April 2017. The country’s industry body UK Music subsequently conducted its own research showing that arenas across the country had faced an increase in ratable value ranging from 11 per cent (Echo Arena Liverpool) to 80 per cent (Manchester Arena) and up to 141 per cent (The O2 London).

Small venues, too, are struggling under the current rates. UK Music estimated that London’s 200-capacity Lexington, for example, looked at a 118 per cent increase. And as the industry body pointed out, recording studios were negatively affected as well.

So when the country’s new budget approached in November this year, presented by chancellor Philip Hammond and suggesting a further increase in business rates, UK Music called for an urgent review.

“The chancellor must rethink these changes which are woefully unjust and could have a potentially catastrophic impact on some music venues and recording studios,” UK Music CEO Michael Dugher said, detailing the economic impact of grassroots music venues in the UK in an open letter to Hammond.

The only concession the chancellor seems to have made, however, was to link the increase in business rates to the consumer price index rather than the higher retail price index. And while this move was welcomed by UK Music, it “fails to address the immediate concerns of the music industry where venues and studios are still reeling from rises of up to 118 per cent in their ratable value.”

The chancellor also announced an extension of his pub relief scheme, but didn’t clarify whether small music venues would benefit from it. UK Music CEO Michael Dugher said, “many venues will feel short-changed by the Chancellor today. We need a review of the rates many venues and studios face if we are to maintain our vibrant and diverse music scene.”

Pollstar spoke to John Sharkey, executive vice president of SMG Europe, about his views on the UK’s business rates.

“I think that everybody would accept that we’ve got a fair proportion of business rates to pay as business enterprises in the UK,” he said, adding that “those increases are generating a rates increase, which is way significantly higher than the underlying activity that is going through those buildings.

“That taken together with the increases in PRS, the general increases in labor market rates, is obviously putting significant pressure on the burden of these arenas and the venue managers of those arenas.”

Sharkey added, “considering these arenas are a good thing for the cities in which they operate – through providing audiences who will spend bed nights and leisure entertainment money in the city and create economic impact and jobs and prosperity in the city – the last thing that you want to be trying to do is making it difficult for these enterprises to be able to conduct their business by having disproportionate increases in the value of business rates.”

Promoters couldn’t simply pass on increasing costs to their customers by raising ticket prices if they wanted to maintain or grow their audience as well as the same or a higher number of events, according to Sharkey, who said: “The objective for every arena in every city, and the objective of the city as well, should be that there are as many events as there possibly can be in these buildings with as high an attendance as we can possibly manage, because with the higher footfalls across the year it’s going to result in greater economic impact and prosperity for the cities in which we operate.”

The UK’s Music Venue Trust told Pollstar that it did not think the new budget offered any good news for grassroots music venues in the country, pointing out that there was “no action [taken] on previous ridiculous increases, no action to tackle the new increases, no clarity on any relief,” summarizing the chancellor’s efforts as “inept.” 

New Scottish Fest By Festival Republic

Andrew Whitton – Download 2015
Festival Republic event

Festival Republic has applied for a public entertainment license for a yet unnamed event with a capacity of up to 20,000 with Perth and Kinross council.

Perth and Kinross council looks after the Scottish county of Perthshire, which is where T In The Park used to take place, until being forced to take a break in 2017.

The festival’s future is still up in the air – a recent Pollstar request for clarification sent to TITP promoter DF Concerts was left unanswered. But it is most likely TITP won’t return in 2018, now that Festival Republic intends to host a 20,000-capacity event close to the festival’s original site.

The Live Nation company applied for an event at Scone Palace, May 25-26, 2018, comprising two stages, bars, funfair rides and concessions. According to the application, a public car parking facility, a pick up and drop off point for cars and taxis, and a shuttle bus service have been proposed by Festival Republic as well.

Camping is also mentioned in the application, albeit only in connection with staff camping. The provisional site plan in the publication suggests a larger camping area. Pollstar has reached out to Festival Republic for clarification.

The application is for a one-year license. No further information has been announced yet. Instead, Festival Republic just released the lineup for one of its other events, Community Festival, which returns to London’s Finsbury Park on Sunday, July 1.

Door Cinema Club, The Vaccines, You Me At Six, Circa Waves and Sundara Karma have been announced for the event. One day earlier, on Saturday, June 30, Festival Republic is staging a day of concerts in the same park, effectively turning it into a festival weekend.

Queens Of The Stone Age, Iggy Pop, Run The Jewels and The Hives are on the June 30 bill, with more acts to be announced.

Finsbury Park events are only possible, because of a recent court decision determining that London’s local councils are allowed to continue hiring out the city’s parks to promoters. The case involved Live Nation/Festival Republic and the Friends of Finsbury Park charity.