I explained to the committee when I came to this industry from the outside, I was really struck by how many different perspectives and opinions there were about that, and very early on I had committed myself to the evidence. That is indeed what I have done.
Every three years, the secretary of state must review how the pubs code and the pubs code adjudicator (PCA) is working. That review of the period from April 2019 to March 2022 is now underway.
The secretary of state invites views and evidence from anyone in the industry with an interest in the pubs code, and the deadline for providing them is 17 August 2022.
I will be submitting the evidence I have collected over that period which indicates the progress that has been made since the last statutory review, and the areas for my focus where more improvement is required.
Key among that evidence will be the results I have recently published of the PCA tied tenant survey. This is the first to have taken place since 2019 owing to the pandemic, and therefore the first since I stepped into the role of PCA.
I increased the number of tenants surveyed to over 600, to enable me to get more reliable evidence of tenant attitudes to their pub company and, importantly, to enable comparisons to be made between those pub companies.
Most will know the pubs code was introduced because of serious problems in the tied relationship, caused by imbalance of power between tied tenants and their pub company.
My survey showed 62% of tied tenants are now satisfied in that relationship, while 22% are dissatisfied.
When looking only at those tenants whose tenancies began after the pubs code came into force and have had the benefit of all of rights to transparent information and fairness throughout their journey as tenants, the satisfaction rate is 67%.
There are differences between the pub companies. At one end of the scale, 80% of all of Admiral’s tied tenants were satisfied in their relationship, and 12% dissatisfied.
However, only 47% of Punch tenants were satisfied in their tied relationship, while 29% were dissatisfied.
It is important to make these comparisons to seek to drive up standards. Existing and new entrants to the tied trade will have that information.
This comparison should create an incentive for all pub companies to ensure their tenants are satisfied by complying with the letter and spirit of the pubs code.
It may be tied tenant satisfaction has had a boost owing to the significant support they received from their pub company during the pandemic. Consistent with the pubs code, I ensured pub companies had clear, public and fair criteria for providing that support, so that favouritism and unfairness could not play a part, and each tenant could feel confident they were being treated justly.
I was pleased to see a British Beer & Pub Association (BBPA) survey recently found 75% of regulated tied tenants were satisfied with the transparency of the discretionary support provided.
One area where my survey showed positive progress across all pub companies is in the fairness of discussions with the business development manager.
As the person who has day to day discussions with the tied tenant about matters such as repairs, business planning and rent negotiations, this is an important relationship.
It was one which caused parliament significant concern in deciding to introduce the pubs code.
Now, 76% of tied tenants think they are treated fairly in those discussions, while only 12% do not. All pub companies scored over 70%.
However, my survey results told me there remain pain points for tied tenants. Notably, these include the management of repairs and dilapidations. Only 39% are satisfied with this – but the results between pub companies vary, ranging from 72% of Marston’s and 62% of Admiral tenants, to at the lowest 27% of Stonegate tenants, who with over 3,100 pubs have the largest tied estate.
Clearly, my team will have this issue as a focus, and Stonegate will be aware it has work to do to show it can improve.
Satisfaction with the pub company handling of the market-rent-only (MRO) option process is also too low. I have published my response to the consultation I carried out on steps I propose to smooth the path of tenants through this process, and my guidance will be published shortly.
The survey also sought to understand tenants’ awareness of the pubs code and attitude to the PCA.
Awareness of the pubs code has increased among tied tenants from 79% to 84% since the 2019 survey.
Awareness of individual rights is lower. For example, 61% of tenants are familiar with the right to request an MRO option in certain circumstances. The hard work of my team and the pub company code compliance officers to promote understanding of code rights must go on.
This column is intended to aid industry understanding about the pubs code and its impact. Nothing in it should be understood as a substitute for the pubs code legal framework.