There are a fair number of pubs that could be OK for the kind of sessions they've had at the Volunteer.Though The Volunteer is perfect, apart from being a fair way up the hill. But if the place isn't going to be available, there are other pretty suitable pubs.
But I get the impression that it's not that, but rather that the Sidmouth Management want to have another paid venue for more traditional music, and have decided that the Theatre Bar is the right place for it. They are probably wrong, though the idea in itself isn't a bad one.
It seems that the singaround in the Theatre Bar is seen as dispensable. It doesn't bring in as much money as a paid venue would, that appears to be the thinking. But finding a replacement where this tradition can be continued is much more of a problem, and whatever happens it's going to lose out on the come-all-ye quality.
Some email addresses for who to write to about this would be helpful.