The Night Time Industries Association (NTIA) has warned MPs about the growing rent crisis facing the UK’s nightclubs as a result of the coronavirus pandemic.
The NTIA, which represents the interests of nightclubs, bars, music and entertainment venues across the UK, addressed the All Party Parliamentary Group for the Night Time Economy yesterday (May 11) about the estimated £2.5 billion rent crisis that is currently facing nightlife operators.
The debt crisis has led to 75 per cent of commercial tenants in the UK’s nightlife sector facing the prospect of bankruptcy in the near future, according to a new survey of 360 corporate and SME businesses across the UK that was recently conducted by the NTIA.
The survey also found that 93 per cent of commercial tenants have already encountered substantial job losses, while 80 per cent of those surveyed continue to experience unproductive discussions with their landlords.
The NTIA are demanding that the UK Government now steps in to help alleviate the crisis. The organisation has written to the government today (May 12) 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 says. “As a result, businesses have been unable to pay rental arrears, through no fault of their own, and have accrued considerable debts.
“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 have warned that if the government removes the forfeiture moratorium then “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”.
A “shared burden” is one possible solution to the crisis that has been put forward by the NTIA, which would see tenants, landlords and the government contribute 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”.
Michael Kill, Chief Executive of the NTIA, said that the crisis urgently requires government intervention and “a policy that allows tenants, landlords and government to share the burden of debt from rent arrears”.
“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 added. “We must avoid this cliff edge.”
Jeff Smith MP, Labour MP for Manchester Withington and Co-Chair of the All-Party Parliamentary Group for the Night Time Economy, said that the situation was “truly worrying” and that there is “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.”
Back in February, the All Party Parliamentary Group warned of “ghost towns” cropping up across the UK if the government fails to intervene and support the country’s struggling nightlife sector during the pandemic.