Why are UK’s small music venues in ‘full-blown crisis’?

British registered charity Music Venue Trust (MVT) has sounded the alarm, stating that the UK’s small music venues are experiencing a “full-blown crisis” – with many forced to close over the last year.

The organisation has asked Jeremy Hunt, the Chancellor of the Exchequer, for an extension of the 75% business rates relief introduced in April this year – which is due to come to an end next March.

In an open letter to the government, the charity said: “The grassroots music sector is in the middle of a full-blown crisis,” with the UK losing at least one venue per week.

Founded in 2014, MVT represents more than 900 grassroots music venues across the UK and acts to protect and improve venues for the benefit of communities and upcoming artists. It is concerned with the lack of funding for venues from Art Council England and has previously voiced concerns over the state of the country’s music scene, warning that emerging artists could find their careers cut off at ground level.

“One hundred and twenty-five venues have shut their doors for live music in the last 12 months, 15.7% of all such spaces in the UK,” stated the letter.

“It represents the loss of 4,000 jobs, 14,250 events, 193,230 performance opportunities, £9 million (€10.3 million) of income for musicians, and £59 million (€67.7 million) in lost direct economic activity.”

MVT called the closures “an immediate economic, social, and cultural blow” to local communities, and warned that a major intervention is needed from the government and the wider industry.

Scroll down for the full letter.

The UK music industry brings billions of pounds into the country’s economy and is a major cultural draw for tourists.

In January 2020, then Chancellor Rishi Sunak introduced a special 50% business rates relief for grassroots music venues, which was extended to 100% during the COVID pandemic. Post-pandemic, it was reduced to 75.

MVT says removing the 75% rate would “plunge the entire grassroots sector into the red,” and warned more venues would close as a result.

Here is the full open letter to Jeremy Hunt:

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Grassroots Music Venues need your help. They need you to extend the existing 75% Business Rate Relief beyond April 2024 in the Autumn statement.

The Grassroots Music Sector is in the middle of a full-blown crisis. 125 venues have shut their doors for live music in the last 12 months, 15.7% of all such spaces in the UK. It represents the loss of 4,000 jobs, 14,250 events, 193,230 performance opportunities, £9 million of income for musicians, and £59 million in lost direct economic activity.

15.7% fewer venues is an immediate economic, social, and cultural blow to the 125 local communities that have lost access to live music. These were treasured places that bond our communities together, foster pride in the places we live, drive creativity and create aspiration. For the British music economy, an area of the creative industries in which we are world leaders, this is 15.7% fewer research and development opportunities to support the next wave of British talent. The Secretary of State for Culture, Media, and Sport, Lucy Frazer, recognised the essential R&D role that Grassroots Music Venues play in the DCMS Creative Industries Sector Vision in July 2023. In that report, DCMS invested an additional £5 million into Arts Council England’s Supporting Grassroots Live Music fund specifically to support the grassroots sector because of its vital R&D role.

In January 2020, prior to the pandemic, Rishi Sunak created a special 50% Business Rates relief for Grassroots Music Venues which recognised the importance of these spaces. The Prime Minister, when he was Chancellor, chose to acknowledge that the current Business Rates system is an egregious and inequitable tax on Grassroots Music Venues that needs reform. Knowing that reform would take time, he chose to reduce the Business Rate bills faced by Grassroots Music Venues by 50%. That relief was extended to 100% during the pandemic, then reduced to 75% in the post pandemic economic climate.

The current 75% Rates Relief protects Grassroots Music Venues from an excessive and poorly reasoned taxation. Removing it would increase costs to the sector by £15 million. In 2022, the entire sector returned a profit margin of just 0.2%, £1million in cash terms on a total turnover of £500 million.

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If you remove the Rates Relief, you will plunge the entire Grassroots sector into the red. Venues must and will close as a result. Even more local communities will lose their access to live music. Artists will have nowhere to start their careers. More job losses, less economic activity, less Research and Development. The UK risks producing fewer world-beating artists as a direct result of the decision you make on this issue in your Autumn Statement.

You have said you don’t have the economic conditions to consider tax cuts. Grassroots Music Venues don’t have the economic conditions to allow tax rises.

Please extend the 75% Business Rates Relief beyond April 2024 in your Autumn Statement.