BIS: Government shuns statutory code

By Michelle Perrett

- Last updated on GMT

Related tags: Industry framework code, Renting

Response: Government has not implemented committee recommendation on stautory code of practice
Response: Government has not implemented committee recommendation on stautory code of practice
The Government has failed to introduce a Statutory Code of Practice to manage the pubco/tenant relationship in its response to the recommendations of the Business, Innovation and Skills Committee (BISC).

BIS has set out details of a strengthened industry code to improve the relationship between pub companies and their licensees.

The British Beer & Pub Association (BBPA) said the measures “are the result of constructive dialogue between the BBPA, the BIS, industry partners and campaign groups”.

The key elements of the self-regulatory package are:

  • A Pub Independent Conciliation Advisory Service (PICAS) to be set up to provide mediation and arbitration. Its establishment would be funded by BBPA members, and it would complement the existing low-cost PIRRS arbitration scheme which relates only to rents.
  • The Industry Framework Code to be strengthened and made legally binding - the strengthened Code will focus on full repairing and insuring (FRI) leases. This will focus on areas of concern, such as rent, insurance, training and dilapidations, combined with a commitment to discuss further improvements with industry. The strengthened Code will abolish the enforcement of upward-only rent reviews and force pub companies to be transparent with their lessees on issues such as charges for dilapidation repairs and income from gaming machines.
  • A strengthened industry framework code will be implemented, following a review, undertaken with the BII and Federation of Licensed Victuallers Associations and involving other stakeholders.
  • A three-yearly reaccreditation process for company codes which will be run by the BII - achieved through examination of annual compliance reports and spot-checks

By making the code legally binding this will mean it is enforceable through the civil courts. According to BIS this will avoid the need to introduce “slow, burdensome legislation” that imposes further red tape on pub companies.

Consumer Minister Edward Davey said: “This is good news for everyone to raise their glass to. It gives the industry more certainty, which is vital to the success of Britain’s family brewers; and it gives pub-goers the knowledge that they are drinking a fairer pint down their local.

“The advantage of this self-regulatory approach is that it will deliver these reforms much more quickly than could be done through legislation. I would like to thank the committee for its focused scrutiny on this issue, which has been essential in driving through necessary improvements. I am confident that the industry will lose no time in fulfilling the commitments it has made.”

BBPA chief executive Brigid Simmonds said: “Significant progress has been achieved by member companies operating tied tenancies and leases. In its first year, the Pub Industry Framework Code of Practice has improved the transparency and openness of the commercial relationship between pub companies and lessees. Independent research has demonstrated the new code’s rapid acceptance within the industry and is increasingly understood by licensees.

“Today’s announcement is a further sign of our commitment to work with our members and industry representatives to strengthen the self-regulatory framework and the health of the sector as a whole. We look forward to working with industry partners to improve the advice, financial assistance and security offered to new and existing publicans so they can continue to invest, grow and create jobs.”

BII chief executive Neil Robertson said: "We welcome in principle these new proposals which have the potential to be a step forward in a number of areas.
"Proper monitoring of code compliance is vital, and BII will work with BBPA and other partners to secure an arrangement that we can all have confidence in, which stands as a suitable basis for ongoing code accreditation."

Paul Wells of the Independent Family Brewers of Britain said: “This is good news for smaller brewers because it lifts the recent cloud hanging over the brewery tie and the traditional tenancy agreements which we all operate.

"During this long enquiry successive Select Committees received no complaints about brewery tenancies and we believe that the current Code of Practice developed by the BBPA, BII and FLVA provides for the resolution of brewery and licensee issues in traditional tenancy agreements.

“In my view many family brewers will now increase investment into their pubs because of the support the Government has announced for the traditional brewery tenancy agreement and the beer tie’.

The BBPA is expected implement the commitment by the end of 2011. It is expected that PICAS will be set up by the end of February 2012.

Related topics: Legislation

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