Frequently Asked Questions
Please note that things are evolving quickly with the plans for the Osgathorpe Community Pub. We endeavour to keep the list of FAQs up to date, but some of the answers given may not always be 100% accurate. For a definitive answer to your question please ask one of the group. Details can be found here.
Please browse our FAQs below or use the search
What is a Community Pub?
The local community sets up a co-operative society for the benefit of the community in which anyone can buy shares. The society buys the pub building and associated land. It can run the pub itself, employ a manager or lease the pub to a tenant. The OCPL’s current preferred option is to lease to a tenant who would live above the pub and run the business under the terms of the lease.
Do community pubs work?
Yes! There are a growing number of community-run pubs in the UK, with more opening every month, most using exactly the same model as we are proposing here, and many in smaller communities. For a few examples of other community pubs please go to the Links Page.
Who will benefit from this venture?
Our aim is that the whole community of Osgathorpe will benefit by making the pub the focal point of our village by it offering other village based initiatives and services. Also, losing the pub would almost certainly see a decrease in residential property prices – it is in every Osgathorpe householder’s interest to keep the pub open. Additionally, once the pub is re-established under the society’s ownership, it will provide a sustainable source of income to the Parish Council to invest in the village in other ways.
How will the pub create ongoing funds for the village?
The Section 106 money, to purchase and for initial renovation, is being provided from North West District Council, via the Parish Council, in the form of a loan. Once the pub is re-established under the society’s ownership, rent from the pub (trading profits would belong to the tenant landlord if this approach is taken) will be handed back to the Parish Council in the form of loan repayments meaning that the Parish Council will have a sustainable source of income to invest in the village in other ways.
Where is the money coming from to buy and improve the pub?
At the end of 2014 the District Planning Committee (DPC) approved the building of a number of houses on Dawson’s Road subject to the developer paying £300,000 to the District Council as part of a 106 agreement. The distribution of this money is being managed through the Parish Council. Up to £200,000 is set aside to buy the freehold of the Storey Arms with the remaining £100,000 to support any other village improvements as agreed by the Parish Council, including renovation of the pub.
Who will run the pub?
Our current preferred option for running the pub would be to have a Tenant who would lease the property from the village. The day to day running of the pub would therefore be the responsibility of the licence holder who would be an experienced landlord and would run the pub as a commercial business. In this case members of the community will not run the pub.
The society (OCPL), which will own the freehold of the pub, will have an elected management committee who will work with the landlord to ensure the pub is delivering what the community needs which will be specified in the lease agreement. The society will also be responsible for the maintenance of fabric of the building (i.e. repairs).
Who gets to choose the new landlord?
The new Landlord will be chosen by the OCPL management committee via a recruitment process. Prospective, experienced tenants will be expected to present a sustainable and viable business plan to the committee and demonstrate an in depth understanding of the requirements of the community.
Who are and what is the Management Committee? Do they have a personal interest?
The present management committee is made up of five volunteer residents, who are the current members of OCPL.
- Rob Whyard Chair
- Dave Bull Vice Chair
- Pete Hodgson Treasurer
- John Froggartt Secretary
- Simon Blunt Member
This is a group of local people who believe passionately in preserving the Storey Arms and increasing its customer base and profitability. Collectively there is a wealth of business and community experience within the Committee. None of the Committee Members have any personal interest in the current ownership of the freehold of the Storey Arms.
In future these vacancies will be filled by other members of the community who volunteer for the positions and be voted in by members of the society.
What is OCPL?
OCPL is the Osgathorpe Community Pub Limited, which is the official name of society set up to buy the pub, The Storey Arms, and enable it to continue as a village pub in the future. OPCL is already established as a Registered Society under the Co-operative and Community Benefit Societies Act 2014 (Registered Number 32411R) and has been set up with help from the Plunkett Foundation and has adopted their rules. The OCPL is registered with the Financial Conduct Authority (FCA).
The society has been set up in order to apply for grants and to qualify for advice from certain organisations. To date OCPL has raised £25,000 from grants, including the Big Society and Twenty for Seven. Some of the grant money has also been used for legal advice on the most appropriate contract between the Parish Council and the society for the supply of funds made available through the Section 106 agreement of the Dawson’s Rd development.
So, what is a Registered Society under the Co-operative and Community Benefit Societies Act 2014
- A Registered Society, such as OCPL, can either be a Cooperative which exists primarily for the benefit of its members or like OCPL it can exist for the benefit of the community at large rather than just the members.
- The society must specify the geographic community, community of interest, or other group of people it intends to serve. For us, this is the community pub.
- It must state what the activities of benefit will be and explain how they will benefit the community.
- It must also state how the profit or surplus of the society will be used. A Registered Society can run a business whose purpose is to serve the interests of the community at large. It is usual to issue shares for members, but profits or assets must not be distributed to the members but be used to further the objectives of the society.
- The society's rules must not allow its assets to be distributed to its members on dissolution. The rules should state that on dissolution the assets should be transferred, for example, to some other body with similar objectives. If no such body exists, the rules should state that the assets must then be used for similar charitable or philanthropic purposes.
What is the Plunkett Foundation?
The OCPL is registered with the Plunkett Foundation and we have used them for advice on purchasing the pub, raising money, share issue and encouraging community involvement. We have adopted their model society rules and code of conduct for running a Community Benefit Society. The OCPL Rules and Code of Conduct are available on request.
The Plunkett Foundation was formed in 1919 to supports people, predominantly in rural areas, to set up and run life-changing community co-operatives; enterprises that are owned and run democratically by large numbers of people in their community. They help people to tackle a range of issues, from isolation and loneliness to poverty, and come in many forms including shops, cafes, pubs and land-based initiatives, and everything in between.
For more information please visit the Plunkett website:
Who are the members of OCPL?
There are currently the 5 management committee are the only members. As there has been limited progress on buying the pub over the last year we have not tried to expand the membership. If we do see some progress, then we will want to expand the membership as much as possible to get a much wider group involved.
How do I become a member of OCPL?
Anyone over the age of 18 can become a member of OCPL by applying to the management committee and purchasing a least 1 share in the OCPL. We have not been out to encourage this up to now because of the slow progress in buying the pub, however shares are ready to purchase.
What is the Share Price?
This is currently £25 but this will be reviewed once we know what the purchase agreement to buy the pub is and therefore whether additional money needs to be raised. The price has been kept low to enable all members of the community to be invlvoed.
I have heard that I can get a return on my shares. How does that work?
Shares issue by the OCPL, under the cooperative and community benefit rules, are primarily issued to help with the setup and running of the Storey Arms as a community pub and to allow shareholders to be part owners of the society and help define the strategy and management of the business. The shares should not therefore be viewed as a normal investment. The Society, at the discretion of the Management Committee, may pay interest to share holders from trading profits, having regard to the long term interest of the Society, the need to maintain reserves and the Society’s commitment to community benefit. The rate of interest to be paid is to be approved at the Annual Members (shareholders) Meeting and is not to exceed 2% over Bank of England Base Rate and. A minimum level of share ownership may also be set before interest will be paid. The reason for potentially rewarding people who buy more shares is to help us raise more money to improve the business.
What does being a shareholder entitle me to?
Each shareholder is an equal member of the OCPL and has an equal say regardless of the number of shares purchased. Each shareholder / member will be eligible to vote for and/or present themselves as a candidate to the Management Committee at the annual meeting.
The elected Management Committee is responsible for day to day running of the OCPL. However, on key points of strategy where the Management Committee needs the support of members, each shareholder will have an equal vote. A group of members (not less than 12 or 10% of the membership) can also request a Special meeting.
Interest may be paid on the shares owned by members, see previous question.
If I become a member and buy shares will my money safe?
The sale of community shares is not regulated by the Financial Conduct Authority, because investors are deemed to be investing for social returns, not financial gain. Community investors have no right of complaint to the Financial Ombudsman Service and cannot apply to the Financial Services Compensation Scheme.
Community shares are far more risky than keeping your money in a savings account with a bank or building society, where currently the first £70,000 is fully protected. You can lose everything you invest in a community shares offer. This is why it is important to look carefully at a community share offer before deciding to invest.
However, the Society in which you have shares will own the pub buildings and associated land, which, even if the pub business fails, will have some value. In this event the intention would be to sell the building and the proceeds would be used to pay off debts including the loan from the Parish Council and then shareholders. Any excess, if any, after these liabilities have been paid, will be put towards another local community project.
What are community shares?
The Osgathorpe Community Pub Ltd (OCPL) is a registered society under the co-operative and community benefit societies act 2014. As such it can issue “Community shares” which provide a mechanism for investment in and ownership of this social enterprise. The term community shares refers to non-transferable withdrawable share capital; a form of share capital unique to co-operative and community benefit society legislation. This type of share capital can only be issued by co-operative societies and community benefit societies and has some unique characteristics:
- This type of share capital cannot be transferred between people. Instead, the society allows shareholders to withdraw their share capital, subject to terms and conditions that protect the society’s financial security.
- The value of shares is fixed and not subject to speculation
- Shareholders have only one vote, regardless of the size of their shareholding, so the society is democratic. There is also a limit on personal shareholdings, currently up to £100,000. There is also a limit on the interest paid on share capital, based on the principle that interest should be no more than is sufficient to attract investment.
Are these shares regulated by the Financial Conduct Authority (FCA)
The OCPL is registered by the FCA, but societies are not required to be authorised by it for the issue of withdrawable shares. This means that community investors have no right of complaint to the Financial Ombudsman Service and cannot apply to the Financial Services Compensation Scheme.
If I invest do I take on any other liabilities?
No. Your liability is limited to your investment.
What voting rights do I have?
Each Member has only one vote at general meetings, irrespective of the number of shares they own.
Can my shares be withdrawn or sold to someone else?
Shares in the society cannot be sold. They are a special sort of share known as ‘Community Shares’ and may be withdrawable but are not transferable. The only way you can recover their value is to apply to the Society to withdraw any shares you own which will be dealt with in accordance with the rules of the Society.
I’d like to have more of a say – how can I do that?
By buying a share in the OCPL at £25 you will become a member and eligible to vote for and/or present yourself as a candidate to the Management Committee. There will also be meetings held during the year open to all members where you can have your say.
What happens if the pub fails?
In the unlikely event that the pub fails, the community would explore options to use the building for alternative community purposes. If this is not possible then the all the assets would be sold (ie the building and land), and the proceeds of the sale would be used to repay any debt. Thereafter, shareholders would be repaid and any remaining surplus would be put to community use. Note that under the rules of the society any 'profit' generated HAS to be used for the benefit of the community. Shareholders cannot be repaid more than the initial price of their shares therefore their value cannot go up but can go down or they can lose all of their value. With the structure we have chosen no individuals can benefit persoanlly from this, only the entire community can benefit. Once we own the building, we beleive it is very unlikely that it will ever sold for development.
If there is a Tenant How will the rent be calculated?
The rent will be calculated by the management committee with the aim of allowing the tenant to establish the business in the first few years. The rent charged will always reflect the profitability of the pub business, which will be visible to the committee. It is not in the interest of the Society or the tenant to charge a level of rent which results in the pub business becoming unsustainable.
What happens if negotiations with the current owner fail?
We will not issue shares until we know for sure that we are buying the pub. If we fail to reach an agreement with the current owner of the Storey Arms, then the money made available through the Section 106 agreement can be retained by the Parish Council for 5 years in the hope that an agreement can be reached in this time period. Ultimately if no agreement is reached then the money is returned to the developers.
Will I have a say in what happens at the pub? What happens if I don’t like how the business is being run?
Anyone in the village will be able to raise any thoughts or concerns about the pub with the management committee of the OCPL. Also, if you are a member you will have a vote at Annual and Special Members Meetings. 12 Members or 10% of all Members (whichever is less) can require the Secretary of OCPL to convene a Special Members Meeting to consider any matter which concerns them.
Will Members be expected to volunteer their services?
The preferred Business Plan doesn’t rely on Members volunteering for day to day running of the pub, but we certainly hope to provide opportunities behind the bar and in the kitchen for those that are interested. There should also be plenty of opportunities for Members to get involved in cleaning, decorating, gardening and general DIY efforts to get the pub up and running again.
Will the new Tenant make an excessive profit?
The Tenant would need to run the pub at a profit as it will be their livelihood. It would mean that the business is sustainable and an indication that the pub is being successfully run and is delivering against the needs of the Village Community. The rent will be set and rent reviews incorporated so that the division of profit between the tenant and OCPL is fair.
Is there a business plan?
Yes, we have an outline business plan, which has been submitted to the Parish Council in support of our application for funds. The Tenant will be responsible for further development of the business plan as it will be their livelihood. With your support and the appointment of the right tenant we firmly believe that the Storey Arms and OCPL will be profitable enterprises able to benefit the village both economically and socially.
Are there restrictions to becoming members?
Members must be aged 18 or above. There is no requirement to be a resident of Osgathorpe and we welcome investors from the wider community and further afield.
Do members get special privileges?
Unfortunately there will be no discounts on beer for members! However, you will have the privilege of owning part of a traditional English pub which you can be proud to bring your friends and family to
I make my own jam and cakes, will the pub interested?
It is the intention to appoint a landlord that will embrace the local community and all that it offers. We would ideally like a pub that can offer more services and products than just being somewhere for a pint and a packet of nuts!
What other services are you hoping the pub will offer?
This is really up to the tenant with guidance from the management committee, however the list is endless and services suggested so far include:
Book exchange (although there an excellent one in the phone box!)
Kids play area
Parent and toddler club
After school club
Local interest clubs
Sports teams (darts, netball, squash, football, cricket etc)
Room hire (eg kids parties)
…all suggestions welcome