Government cutbacks could result in higher closure rates for social enterprises in England and Wales.
More than 150 pubs closed their doors for good during the first quarter of this year as soaring energy bills, taxes and other costs pushed many operators over the edge.
According to Altus Group, a commercial property firm, 51 pubs closed in the first quarter of 2023--almost two per day.
That's an average of 32 pubs a month that closed across last year, bringing the total number of pubs in England and Wales down to 39,634 by the end of March.
However, the rate of closures is expected to accelerate in part because the government's energy support package has been scaled back starting this month.
Simon Cleary, who runs the Plough at Great Chesterford, near Saffron Walden in Essex, said he reluctantly closed his business after experiencing a dramatic increase in his gas and electricity bills from £13,000 a year to £37,000.
"Initially, we were very upset. But now, we feel relief. It has become unprofitable for us to operate our business, and we have been unable to pay ourselves a wage for several months now. We just can't carry on with these bills."
Cleary, who has been running the 150-year-old pub for the last five years, said his January gas bill was more than £2,100 compared with £460 for the same month a year earlier.
He will hand the lease back to Greene King and it is up to that firm whether the pub will reopen under new management.
The British Beer and Pub Association has warned that the average energy bill for a pub will rise by £18,400 a year from the start of this month.
The government's support scheme for firms was less generous than in previous years, it said, meaning that pub owners faced higher costs. Last month, 2,000 pubs closed and 25,000 jobs were at risk. In 2022, 386 pubs closed down.
Alex Probyn, president of property tax at Altus Group, said that pubs have seen their values for business rates fall 17%. This will result in a £5,500 tax saving for the average pub.
The government does not record the number of pubs that have been demolished or converted to other types of use such as homes, offices or day nurseries.
The £18bn-worth of discounts offered to all businesses between October and March by the energy bill relief scheme announced last September have been reduced in scope by the recently implemented £5.5bn discount scheme, which began in April.
