A Message in Response to The Welsh Government’s New Budget Announcement

I’m writing to you to follow up our initial letter in January 2024, regarding the announcement in December that Business Rates relief for pubs, shops and restaurants is due to be cut from 75% to 40%.

We would like to thank you for your response and, while we recognise the extraordinary pressures that the Welsh Government faces to deliver this budget, it is counter intuitive to pursue this measure within the grassroots music sector.

Cutting Business Rates relief will have a direct impact on the number of events that will be staged in Wales, reducing supply, cutting economic activity, and negatively impacting on jobs, especially in the ‘gig economy’.

The gross profit from the entire sector in Wales in 2023 was £119,000. The proposed fall in rates relief creates a new additional cost of £127,000.

If signed off as planned, this single measure puts the sector, as an entire network, into the red. It places the long-term resilience of Welsh Grassroots Music Venues (GMVs) at a severe and direct competitive disadvantage when compared to their cultural counterparts in England that will continue to be entitled to rate relief, resulting in very significant national disparity between costs associated with touring.

37 Grassroots Music Venues in Wales (77%) are subject to the increase in costs, allowing for all models of rate relief.

The demand for rate payment increases falls disproportionately on venues already identified by Music Venue Trust as those most at risk of closure due to their legal infrastructure, location and business model.

The value of the increase by venue is such that it will present an immediate threat of closure to 16 venues – 33.3% of all the venues in Wales.

If these 16 venues close, the direct cost to the rates budget would be £153,679. Only 12 of these venues would need to close before the total raised from the predicted increase delivered by this budget measure (£127,000) would be eliminated by business closures.

588 jobs, £8 million of economic activity, 3500 events and 30,000 performance opportunities for musicians are at direct risk from this measure.

The closure of a single venue represents a huge loss to the local community, to the music sector, and to the future of Welsh talent. The closure of 16 would be a catastrophe to the Welsh grassroots music scene.

We recognise concerns that the wider hospitality and nightlife sectors may ask for similar consideration if Grassroots Music Venues are granted an exemption. This is, however, a clearly defined sector with specific characteristics, already recognised by the Welsh government during the delivery of Covid relief measures.

Support to manage the issues the Welsh budget presents to these venues can be ring fenced as a specific cultural infrastructure measure which acts upon the defined characteristics of a Grassroots Music Venue.

Welsh Grassroots Music Venues deserve to be operating within a level playing field and therefore we strongly urge you to act to conserve the current rate of Business Rate relief for GMVs in Wales.

We would be pleased to meet with you to discuss this further. Please let us know via musicvenuetrust@connectpa.co.uk and we would be delighted to arrange.

Yours sincerely,
Mark Davyd
CEO
Music Venue Trust

Thank you for your invitation for a meeting to discuss conserving the current rate of Business Rate relief for Grass Roots Music Venues (GRMV) in Wales, which you feel will cause further closures of GRMV’s in Wales.

I can advise we will be investing an additional £78m to provide a fifth successive year of support for retail, leisure and hospitality businesses with their non-domestic rates bills. This builds on the almost £1bn of support provided through our retail, leisure and hospitality rates relief schemes since 2020-21.

Eligible ratepayers will receive 40% non-domestic rates relief for the duration of 2024-25. As in previous years, the relief will be capped at £110,000 per business across Wales. This temporary relief was never intended to continue indefinitely and our move to more frequent revaluations will ensure that non-domestic rates bills better reflect up-to-date market conditions for all sectors of the tax-base.

The Draft Budget for 2024-25 has been developed in the context of the toughest financial situation we have faced since devolution and a settlement which is not sufficient to respond to all the pressures our budget, Welsh public services, businesses and people are facing. We have had to make some very difficult decisions to refocus funding towards core, frontline public services.

Unfortunately, I’m unable to meet you however I understand my officials from Creative Wales met with you recently and I’m keen that you retain that close working relationship to ensure all parties stay abreast of the news pertaining to GRMV’s, such as the recent announcement concerning the £718,000 capital investment Creative Wales has offered to 17 GRMV’s across Wales.

Yours sincerely,
Dawn Bowden AS/MS
Dirprwy Weinidog y Celfyddydau, Chwaraeon a Thwristiaeth
Deputy Minister for Arts, Sport and Tourism