Losing a pub: assets of community value and local policy

When a pub closes and a developer applies to turn it into flats, two separate systems are in play and they do different things. Planning controls whether the change of use is acceptable. Listing the building as an asset of community value under the Localism Act 2011 does not stop a sale or a change of use at all: it imposes a delay on a disposal and gives a community group a window to prepare a bid. Understanding which lever does what is the difference between an objection that carries weight and one that is noted and set aside.

A pub change of use planning application will almost always need permission. That much is settled.

Why a pub sits outside Class E

The Use Classes Order was substantially amended with effect from 1 September 2020, and the reforms that created the broad Class E deliberately left drinking establishments out of it. Public houses, wine bars and other drinking establishments are sui generis, meaning they sit in a class of their own.

The practical effect is that any change from a pub to another use is a change between classes and needs planning permission. A pub cannot slide into a shop, an office or a café without an application, which is exactly what would have happened had it been swept into Class E. The background to that choice is covered in more detail in why a drinking establishment is sui generis.

Nor can it simply be knocked down. Demolition of a pub was taken out of the permitted development route in 2017, so demolition also requires an application.

Permitted development and what was removed

Until 2017, pubs sat in Class A4 and various permitted development rights allowed changes to retail, office and restaurant use, in some cases subject to prior approval. A 2017 amendment to the General Permitted Development Order removed those rights for drinking establishments across England.

That change matters to a community group because it means there is a decision to object to. Before 2017, a pub could be converted with little or no public process, and the only protection came from listing the building as an asset of community value, which triggered a requirement for a full application in some circumstances. Since the rights went, the full application is required anyway.

So the position now is straightforward, if not always comfortable. Any loss of a pub to another use or to demolition is a planning decision, taken by the local planning authority, on the development plan and other material considerations.

Listing as an asset of community value and its effect

A parish council or a community group of at least 21 local electors can nominate a building for the list of assets of community value maintained by the local authority under Part 5 of the Localism Act 2011 and the Assets of Community Value (England) Regulations 2012. The test is whether the current or recent use furthers the social wellbeing or social interests of the local community, and whether it is realistic to think it could do so again in the next five years.

Listing does three things. It puts the building on a public list. It triggers a moratorium when the owner wants to make a relevant disposal. And it becomes a material consideration in the determination of any planning application affecting the building.

Listing does not do the things people most often expect. It does not prevent a sale, it does not give the community a right of first refusal, it does not stop a change of use, and it does not require the owner to sell at a particular price or to a community buyer. The detail of what listing achieves and what it does not is set out in what listing as an asset of community value does.

The moratorium and the community right to bid

When an owner of a listed asset wants to dispose of it, they must notify the local authority. That starts an interim moratorium of six weeks, during which a community interest group can express an interest in bidding. If such an interest is registered, a full moratorium of six months runs from the owner's notification.

During the full moratorium, the owner cannot complete a relevant disposal other than to a community interest group. After it ends, the owner is free to sell to whoever they choose, at whatever price. There is then a protected period during which no further moratorium applies.

Six months is not long to assemble finance for a building purchase. Groups that succeed usually start the work at nomination stage rather than at notification, with a business plan, a share offer or loan facility in preparation and a valuation obtained independently. Groups that start when the clock starts rarely finish.

The moratorium also has no direct bearing on the planning application. An owner can pursue a change of use while the moratorium runs.

Marketing evidence local policy requires

Most adopted local plans carry a policy protecting community facilities, supported by the National Planning Policy Framework's approach to guarding against the unnecessary loss of valued facilities and services. The typical policy requires the applicant to show that the use is no longer viable and that the premises have been properly marketed without a buyer or tenant for the existing use.

The marketing requirement is where objections most often bite, because the policy usually specifies how the marketing must be done and applicants frequently fall short. Points worth checking against the policy wording:

• the length of the marketing period, often twelve months, and whether it actually ran for that long
• whether the property was marketed as a pub as well as for alternative uses
• the asking price or rent, and whether it reflects the value of the building as a public house rather than as a residential development site
• whether a recognised licensed trade agent was instructed
• whether the property was visible: board on site, listings in trade publications, particulars available
• whether any offers were received and why they were rejected

An objection that sets these out point by point against the policy criteria is far more useful to a case officer than one that says the pub was the heart of the village. The officer already knows how the community feels. What the officer needs is a reason, grounded in policy, to find the evidence inadequate.

Viability evidence for a public house

Applicants usually submit trading accounts to show the pub was losing money. Those accounts deserve scrutiny, and community groups are often better placed than the council to provide it.

Look at the period covered, which may coincide with a deliberate run down in trade. Look at whether the accounts are for the pub trading as a pub or for a business that had already reduced its opening hours, dropped food, or removed staff. Look at the rent charged, particularly where the pub was tied and the rent was set above what a free of tie operator would pay. And look at whether the accounts were prepared by an accountant or assembled for the application.

Where the scheme involves an element of housing, a Viability Assessment may also be submitted to argue that affordable housing or other contributions cannot be afforded. That is a separate document with its own conventions, and local authorities increasingly publish viability evidence rather than keeping it confidential, so ask for it.

Independent evidence helps. A letter from a licensed trade agent giving a view on the rent or the marketing price carries more weight than a hundred signatures.

Objecting effectively as a community group

Coordinate rather than duplicate. Identical letters are recorded but a case officer weighs the points raised, not the number of times each is made, so a group is better served by different people covering different ground: one on the marketing evidence, one on the accounts, one on the community use, one on parking or highway implications.

Use the policy numbers. Name the community facilities policy in the adopted local plan, quote the criterion the applicant has not met, and explain why. Where a neighbourhood plan exists and protects the pub, say so, because a made neighbourhood plan forms part of the development plan.

Ask for the application to be determined by committee if your local scheme of delegation allows a call-in by a ward councillor. Most schemes do, within a deadline.

And be realistic about what the documents show. If the marketing was properly done, the accounts are sound and the policy criteria are met, the application is likely to be approved whatever the strength of feeling, and the community's energy is better spent on the moratorium route or on a purchase. The full evidence pack an applicant is expected to produce is described in the report pack for converting a pub to housing, and a pub converted to two dwellings shows what a modest scheme of that kind looks like in practice.

This is general guidance, not legal advice; check the position with your local planning authority or a qualified professional before relying on it.