A quick recap
The Localism Act 2011 created the concept of an asset of community value (“ACV”). The purpose was to enable community interest groups to group together to bid to acquire property that furthers the social well-being and interests of the local community, where the owner wishes to dispose of it (whether by the sale of land with vacant possession, or the grant of a long lease).
The outcome of any nomination is determined by the local authority. Initially properties most commonly nominated were local libraries, post offices, sports grounds etc. Very few councils scrutinised nominations with care, and most succeeded.
Pubs as ACVs
In 2015 CAMRA launched a “list your local” campaign, and more and more pubs became the subject of nomination. Sometimes this occurred when sale or development of the land was envisaged, with a view to disrupting either or both possibilities. Sometimes the nominations had no rationale whatsoever to them, and were part of an attempt at boastful bulk listing.
Occasionally a community interest group was formed to genuinely bid to acquire the pub. I speak from experience when I say that I can count on a few fingers, out of around 150 nominations, the number of times that a community interest group has made a successful bid to acquire the property.
Even in the most high profile of cases that I dealt with (for example the Kensington Park Hotel, Ladbroke Grove and the Golden Lion, Camden), no community interest group bids materialised. And they are still pubs – having been acquired by Holborn Leisure Group, and by the occupational tenant after he matched the development value relating to the upper parts, respectively.
How many pubs are ACVs?
According to CAMRA around 2,000 pubs were listed as ACVs by the end of 2016. Although there is no concrete data on the number of pubs currently listed, my estimate is that around 4 – 5% of the English and Welsh pub stock is listed. This is a significant figure.
Since ACV listing ceases after 5 years from the date of listing, some listings may drop off through the passing of time. Other listings may drop off because the land is developed – as a consequence of which the local authority no longer considers that the pub is of community value. More still may drop off as a consequence of a “relevant disposal” (sale of freehold with vacant possession / grant of lease more than 25 years) during a “protected period”, following notification of intent by an owner to enter into a relevant disposal.
The removal of permitted development rights
One material development in 2017 was the removal of permitted development rights for pubs, so that demolition or conversion to a retail or restaurant use was no longer a permitted development (not requiring a planning application).
Pro-pub campaigners hoped that this would prevent pubs being targeted for sale to and development by supermarket chains and residential developers. Whilst the change was resisted in Parliament because it would not return the pub sector to the “sunny uplands” once again, ultimately permitted development rights were removed and pubs now sit in A4 use which includes “drinking establishments with expanded food provision”.
The future of pubs as ACVs
One might think that CAMRA would take its foot off the accelerator since substantially filling many Council ACV lists with pubs.
However what it set in motion with that campaign still has some momentum and unless opposition continues both branch ACV nominations and branch prompted nominations will continue unabated. It remains the case that CAMRA is still, in 2018, assisting branches and third parties to make ACV nominations, putting Councils at risk of compensation claims and clogging up officer’s roles.
CAMRA’s “Revitalisation Project Proposals” specifically reference that:
“Comments made during the Revitalisation Project’s consultation meetings have suggested that newer CAMRA members are much more likely to have been inspired to join by pub campaigning, and that many longer-standing members who initially joined purely to campaign for real ale now cite campaigning for pubs and/or clubs as their main reason for remaining a member or staying active.”
So it would seem that campaigning to protect pubs will remain at the heart of CAMRA’s activities, in order to both retain old and attract new members.
All things being equal therefore we expect that the proportion of ACV listed pubs may be subject to a slight increase in 2018 and 2019, as delisted pubs are re-nominated again, and fresh nominations are made.
ACV nominations are going to continue to be a disruptor to the sector, at least for the time being.
Planning battles – in focus
And one of the biggest issues caused by ACV listing is the materiality of it in the context of planning applications for development of a pub.
This can be no more clearly seen than where a local authority’s development plan contains measures to protect existing community facilities, which can mean difficulty in developing either upper parts or the whole or part of the listed land.
We have seen an uptick in work reviewing and advising on planning applications, appeals and High Court statutory planning appeals. This is unlikely to cease as the inherent value in trading pubs continues to require realisation in the face of biting costs pressures.
Are Asset of Community Value Nominations and Listings Here to Stay?
The short answer is yes; they are going to continue to be a disruptor to transactions and development in the pub sector. However the disruption can in many cases be moderated by success in:
- Objecting to a nomination
- Reviewing a listing
- Careful representation through the planning process.
Freeths has an unrivalled track record in these three areas given its pub sector expertise, and if you have been affected by an ACV nomination or listing then we would welcome a conversation about your experience.
The content of this page is a summary of the law in force at the present time and is not exhaustive, nor does it contain definitive advice. Specialist legal advice should be sought in relation to any queries that may arise.