In his weekly column, The Bar Man, Jeff Hoyle talks about the costs involved in running a public house…

That looks interesting, I thought, when an article popped up on my phone concerning the cost of leasing or managing a pub, only to discover that I had written it. I suppose that it must have had a number of views to have been included in my feed, and I hope that it illustrates some of the challenges facing our pubs.

Rents, high though they are, comprise only a fraction of the costs of running a pub. You will probably be aware of the price of energy in your home, and can perhaps extrapolate how much that could be for a pub. No wonder so many close in January when the cold weather and initiatives such as Dry January make it very difficult to turn a profit.

There are other burdens. Maybe you didn’t realise that under some agreements, the pub-owning company may take as much as half of the profits from the fruit machines. A new cost which has made the news is for recycling glassware. Reports suggest that pubs currently pay around £1,100 annually for commercial glass collection, but that glassware is to be reclassified as household waste and will attract an additional £1,400 per year.

The big beef is with business rates, and I thought it might be interesting to see how these are calculated. The first stop was the .gov website, and I discovered that the rates are calculated by the Valuation Office Agency and that there is a guide to the process. Unfortunately, it runs to 45 pages, so instead I had a look at the YouTube video that they have produced to explain the scheme in simple terms.

It seems that the officer bases the valuation on the fair turnover of the pub. They will go through the accounts and adjust the figures for factors such as the effect of Covid, the location in the country, the location within a town and the type of trade that they can expect, for example, is it a circuit pub or a community pub?

Notice will be taken of the services offered – does it serve food, are there rooms for rent, or does it offer other functions such as a shop or post office? There are, of course, complications. What if the pub has been empty for a few months or years? How skilled was the landlord, given that the figure sought is a reasonable return? What would or have been the effects of refurbishment or extensions? Have special events contributed to the income being non-typical over the recent months?

Charity events, jubilee street parties or major sporting events, for example. The introduction to the valuation guide clarifies that ‘the guide highlights the important final stage needed for all valuers to stand back and look at the outcome of a valuation produced by applying the guide and considering whether the final figure is sensible given the evidence and individual circumstances which apply (e.g. physical characteristics, correct valuation approach, possible overtrading, etc.).’

This suggests to me that the process is less rigorous and scientific than might be hoped, and that the end result is little more than educated guesswork based on the valuation of nearby properties. Still, a reduction in business rates has been announced for pubs, thanks in no small measure to the campaigning undertaken by a number of bodies, including CAMRA.

Whether this will offset the Covid reductions that are set to expire remains to be seen, and welcome though this is, it does not currently apply to cafés and restaurants, which are also under cost pressure. Time for a root and branch reform.

bar.man@btinternet.com