Boost to community pubs with launch of review into restrictive covenants

Between 2004 and 2009 some 572 pubs are said to have been permanently lost following a sale with a restrictive covenant, potentially depriving thousands of regulars of an important community asset.

As part of its commitment to the Great British pub, the Government has launched a review of restrictive covenants, a legal clause that can be used to prevent community pubs reopening as public houses following a sale.

A covenant can have a double whammy effect, not only taking away a vital community hub but also preventing local people from being able to step in and revive their 'local' as a community run asset.

By changing the use of certain restrictive covenants, communities would be given greater opportunities to use the new 'Community Right to Buy' power in the Localism Bill, which gives local communities the chance to take over and run much-loved local assets, such as the 'local', when they come up for sale.

Groups such as the Campaign for Real Ale (CAMRA) have said that covenants can be used by larger companies to limit competition and close local pubs, and are supportive of the Government's move to consult on the clause.

To further support thriving community pubs the Government has introduced a more generous small business rate relief scheme, to help half a million small firms. For two years from October 2010, small firms will receive 100 per cent rate relief (i.e. pay no business rates at all) on properties up to £6,000 Rateable Value, and a tapered rate relief from £6,000 to £12,000. An estimated 330,000 small firms will pay no rates at all.