British Pub Confederation

Date: June 7, 2019
Embargo: None
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Tenants slam “rotten” decision of Pubs Code Adjudicator to appoint pubco trade body to lead on dilapidations group

The British Pub Confederation, the leading voice representing pubs and publicans, have expressed outrage at the news that the supposedly independent Pubs Code Adjudicator, Paul Newby, has appointed the pubcos’ trade association, the BBPA, to lead a new group tasked with looking at the abuse of dilapidations by the same pubcos! The Confederation have written to the Secretary of State for BEIS, Greg Clark MP, urging him to step in and to overrule this clearly inappropriate decision.

‘Dilapidations’ is a hugely contentious issue, with the large pubcos who operate tied leases often hitting tenants and former tenants with huge bills for repairs they claim are required, with the tenant often having no choice but to pay them, even when they are disputed. ‘Dilapidations’ are routinely abused to seek to extract excessive, often inflated and sometimes extortionate sums from tenants leaving a leased pub, contrary to the Landlord and Tenant Act 1927.

The British Pub Confederation believes that the Pubs Code Adjudicator should launch a proper investigation into the way dilapidations are abused in the sector. Yet, despite evidence of this abuse being sent to the Pubs Code Adjudicator, the only action being taken is to set up a ‘Dilapidations Advisory Group’, without any independent tied tenant representatives, and extraordinarily with the lead role given to the organisation that represents the very companies accused of the unfair practice! In one case reported to the Pubs Code Adjudicator, there is clear evidence of fraud on the part of the pub-owning company. Astonishly, despite having had the evidence of fraud presented to him, the Adjudicator has so far done nothing about it.

The British Pub Confederation have also pointed out that the Pubs Code Adjudicator continues to claim to be working with ‘Tenants’ Representative Groups’, when in actual fact two of these three organisations have the regulated pubcos as corporate members!

UK Hospitality recently merged with the ALMR, which (as their name suggests) represent a great number of multiple operators and NOT individual tied tenants. UK Hospitality members include two of the six companies regulated by Mr. Newby (Greene King and Heineken).

The BII is not a tenant representative organisation, but a membership organisation with charitable status that offers support, advice and professional services to its members, and which sells services to tenants through the regulated pub companies (meaning the BII is a commercial partner of the pub companies the PCA is supposed regulate). Some of the regulated pub companies are corporate members of the BII.

In addition, both UK Hospitality and the BII include property agents Fleurets as corporate members. Fleurets are the former employers of Paul Newby, the Pubs Code Adjudicator, who has faced repeated calls to step down ever since he was appointed in March 2015 over financial connections he retains with the firm, who make 20% of their turnover from very same large pubcos that he, as Pubs Code Adjudicator, is supposed to regulate! Mr. Newby failed to properly declare that he intended to retain a 10% share in the company, as well as the fact that he has a director’s loan owed to him by Fleurets with an initial value of £350,000.

Despite being presented by tenant campaigners with abundant evidence of clearly unfair practice towards tenants, the Pubs Code Adjudicator has, to date, not made a single referral to the Secretary of State, something that the legislation explicitly requires him to do.

Commenting, Greg Mulholland, Chair of the British Pub Confederation, said:

“Tenants and former tenants up and down the country have long reported chronic abuse of dilapidations bills issued by pubcos, and this is indeed a matter that needs proper and robust investigation. Yet instead of doing this, as usual, the Pubs Code Adjudicator sets up a group to discuss it.
“It is staggering that the statutory Pubs Code Adjudicator has appointed the representative body of the pubcos to lead this group! This is clearly wholly inappropriate and will lead tenants to conclude that the whole approach of the Pubs Code Adjudicator is downright rotten, as is already apparent from his failure to carry out the statutory role of reporting unfair practice.
“Tenants and tenants’ groups will continue to have no confidence in an Adjudicator who has proven so unwilling to do the role of tackling abuse of tenants. It’s time the Government stepped in. and if they continue to ignore the failure of the Adjudicator and the Pubs Code, they are breaking their promises made to tenants and to Parliament”.

Dave Law, Fair Pint and a Steering Group Member of the British Pub Confederation said:

“The BBPA being given the lead on the consultation on dubious and sometimes fraudulent dilapidation practices by Pub Owning Businesses is outrageously obtuse at best, and complicit at worst. It neatly serves to highlight how Mr Newby cannot divorce himself from his conflicted relationships and behaviour towards his former clients.
“To gift the lead to the secretariat of the pub owning companies that have perpetrated these abuses and frauds, rather than give it to the real tied pub tenant representatives (those that not only campaigned for the Code & PCA role, but who also were the ones to report this issue over a year ago), not only beggars belief but shows how badly the office of the PCA is working. It shows utter contempt for the victims in this completely unbalanced relationship that has seen hundreds of thousands of tenants pickpocketed of their life savings and losing their small businesses”.

Chris Lindesay, Coordinator of the Punch Tenant Network and a steering Group Member of the British Pub Confederation said:

“It is quite extraordinary that this dilapidations issue is the second example of what, on the face of it is a habitual and wholly unlawful practise engaged in by pubcos and breweries. It beggars belief that the “trade organisations” who have presided over and pass judgement on the practises of these companies in the unregulated sector and who have failed to act in the interests of their own memberships in challenging these practises, should now seek to set up and control a working party with the mission of understanding exactly how unlawful and damaging these practises have been and what to do about it. This offends any sense of fair dealing and is a condemnation of the wholly inappropriate way in which the Pubs Code Adjudicator has been consistently avoiding his statutory duty to investigate unfair business practises”