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(Credit: Hannah Rodrigo)

UK Government warned that 75% of nightlife venues face bankruptcy

The Night Time Industries Association (NTIA) has warned MPs of the rent crisis facing many of the UK’s nightclubs resulting from the coronavirus pandemic.

The NTIA, which represents the UK’s nightclubs, bars, music and entertainment venues, addressed the All Party Parliamentary Group for the Night Time Economy yesterday (May 12th). It warned of the estimated £2.5 billion rent crisis facing the UK’s nightlife establishments.

The debt crisis has already led to 75 per cent of commercial tenants in the UK’s nightlife sector facing the genuine threat of bankruptcy, according to a fresh NTIA survey of 360 business from across the industry.

The survey also found that 93 per cent of commercial tenants have already suffered substantial job losses, while 80 per cent of those surveyed have continued to hold unproductive talks with their landlords.

The NTIA has demanded that the time is now for the UK Government to help ease the crisis. The organisation has written directly to the Prime Minister, Boris Johnson, to express in no uncertain terms their frustration over the “short-term reprieve” for nightlife businesses that is due to expire next month. 

The NTIA are demanding that the UK Government now steps in to help alleviate the crisis. The organisation has written to the Prime Minister to also express their frustration over “the short-term reprieve” from evictions that is set to expire next month. “Large swathes of the nightlife sector have been closed since March 2020 with no meaningful opportunity to open and trade,” a statement from the NTIA reads. “As a result, businesses have been unable to pay rental arrears, through no fault of their own, and have accrued considerable debts.” The NTIA continued: “While the government put in place a moratorium on evictions in March 2020, this is due to expire on June 30, and the prospect of repaying these debts, for most in the sector, is largely unattainable.”

The NTIA also warned that if the government removes the forfeiture moratorium, it will mean that “commercial landlords will once again be able to evict operators in the sector and this will cost jobs and livelihoods, hamper the wider economy and waste the public money spent on supporting these venues to date.”

One of the solutions the NTIA has recommended is what they labelled a “shared burden”. This would involve tenants, landlords and the government contributing towards rental arrears to avoid mass evictions and “a race-to-the-bottom among prospective landlords for the leasing of premises, alongside an extension of protections to allow businesses to regenerate”.

Chief Executive of the NTIA, Michael Kill, has also responded to the crisis, urging government intervention and “a policy that allows tenants, landlords and government to share the burden of debt from rent arrears.”

Adding: “Consideration must be given to a more robust code of conduct or adjudication process, which will require some mandatory or legislative elements within it, to ensure that everyone comes to the table to resolve this appalling situation we find ourselves in,” he explained. “We must avoid this cliff edge.”

Jeff Smith, Labour MP for Manchester Withington and Co-Chait of the All-Party Parliamentary Group has also weighed in. He said that the situation was “truly worrying” and that there exists “a dire crisis in this sector, compounded by widespread anxiety and real human costs”.

“Operators, small and large, are battling increased financial uncertainty and, without a rent debt solution, could face the very real prospect of re-opening on June 21, only to be bankrupt by July.”

“The government needs to urgently consider potential solutions, such as a shared burden model, and loans to enable longer term debt restructuring. I would welcome the opportunity to work with the government towards a solution that helps steer these businesses out of the precarious position they find themselves in.”

In February this year, the All Party Parliamentary Group warned of the risk of “ghost towns” appearing across the UK if the government fails to support the country’s hampered nightlife sector.

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