Inn-Valuable

Unlocking the socio-economic potential of our nation's pubs

Author: Joe Fyans and Callin McLinden   |   29/09/2023

Across Britain, pubs have long stood as familiar and welcoming landmarks. Their significance goes beyond mere watering holes; they have consistently played a pivotal role in knitting communities together and promoting social cohesion. Inn-valuable looks at the value of pubs – to society and to the economy – looking at both first-hand evidence and a range of literature to make the case for supporting the pub trade in Britain as a matter of sound social, economic and political rationale.

Key points

Pubs are of great social and economic value, but they are under threat.

Pubs are the beating heart of many communities, playing multifaceted roles in local daily life across the country. In rural areas, pubs often act as de facto village halls, the locus of village life. In urban settings, given the often-impersonal nature of city life, pubs provide a space for more extended interaction and sociality. Polling carried out for this research reveals the affection felt for pubs as a national institution. Asking British adults if pubs have a positive or negative effect in a community, 75 percent felt the impact is positive. When asked if pubs are important in bringing people together, 81 percent of British adults said that they are.

The impact of pubs in strictly economic terms is also considerable. In addition to the direct impacts of employment from pubs to the breweries that support them, there are indirect effects amassed along the supply chain as well as induced effects caused by the expenditure of the wages paid across the beer and pub sector. All this activity across the economy totals, through direct and indirect impacts, to a Gross Value Added of around £26bn. Furthermore, disproportionately economically important in deprived areas as employers and local businesses. This is in addition to the increased importance of pubs as social infrastructure in deprived areas, where a lack of social capital assets is also linked to poorer economic outcomes.

This is why the decline of pubs is cause for great concern. With each closure, both tangible and intangible voids are left behind. Worst case scenarios can see the ties that bind communities start to fray, leading to diminished community spirit and engagement, as well as neighbourhood alienation, all contributing to a rise in the isolation of individuals. Factors such as heightened costs stemming from rising inflation and energy costs combined with staffing shortages have coalesced into a stormy environment for the sector. Urgent calls for governmental measures, like energy bill support, beer duty freezes, VAT cuts, and specialised financial support, have been echoed across the sector. Yet, recent financial statements have largely sidestepped the industry’s needs, sparking calls for more robust and longer-term relief measures.

Pubs are supporting communities across the country.

Pubs provide value beyond their role as purveyors of food and drink throughout the UK. Inn-Valuable highlights some examples of the activities supported by pubs and the value of pubs to local communities through the lens of seven pubs from across the country. Across the pubs interviewed, there was clearly an acute awareness of the impact of the current cost-of-living pressures both on members of their community and their own businesses. Anxieties over the long-term sustainability of the pub consistently dovetailed with concerns for the wider community among our case studies.

Key themes which stood out amongst all the case studies were:

• Combatting isolation.
• Supporting local causes
• Reflecting local culture
• Bringing local business together
• Supporting communities through generations.

All of our interviewees were in some way providing additional social value, from fundraising activities to the direct provision of help to the community in the form of food or emergency medical supplies. These activities bring with them a sense of mission, and there was a strong determination felt across the case studies that the current crisis must be ridden out to avoid the loss of a prized local institution.

Targeted policy can help pubs survive and thrive into the future.

Looking across the issues faced by publicans in 2023, policy prescriptions fall into three groups:

• Providing emergency support. In the immediate context of energy price surges and inflation across the economy, the first order for policy should be to establish a mechanism by which pubs are protected from the worst of the crisis, as a matter of preserving vital social infrastructure assets. There is also a need to recognise and encourage the social diversification of pubs through policy.
• Joining up thinking. Part of the problem with devising a policy mechanism to support pubs facing closure due to the economic environment is the multiplicity of policy areas which the sector touches upon. There is great potential value in placing a single, accountable figure within government to pull these threads together and give voice to the commonly held view that pubs are of great importance to our country and make a positive impact in their communities.
• Long-term planning. Given the social and economic importance of the sector, there is a clear need to move from a war footing to a more proactive attempt to shore up our nation’s pubs. While short-term support is undoubtedly needed in the sector, what is called for in the long-term is a strategy for shoring up this vital social infrastructure against future shocks and continue to contribute to economic growth.

Recommendations

• A cross-government taskforce on the future of the British pub. A long-term strategy is needed to determine a sustainable tax and regulatory framework and measures that can help the sector thrive in the coming decades and ensure that its pivotal role in society is not lost.
• Emergency fund for energy bill support. Government should establish a fund to provide energy bill support for pubs in deprived areas, in a manner similar to the ‘social tariff’ on household energy bills argued for by organisations such as the Citizen’s Advice Bureau. More broadly, government must ensure all pubs have access to fair and reasonable energy contracts.
• Business rates rebates for diversifying pubs. Government should fund local authorities to provide partial business rebates for pubs which diversify to take on socially valuable roles, such as those providing ‘warm spaces’ or food banks. Pub is The Hub estimate that there is potential for1,000 pubs to diversify over three years, with required funding as little as £4,000 per pub. Financial support could be given to Pub is The Hub to quickly fund these grants.
• A new, revamped Minister for Pubs role with cross-departmental remit. The role of Minister for Pubs, last prominently occupied in 2017, should be reinstated as a Minister of State and given a brief to work across departments to support the pub trade.

Project kindly supported by