What now for self-regulation of the pub sector?

The Government published its long-awaited plans to regulate the tenanted pub company model earlier this month. But the proposals, included in yesterday’s Small Business, Enterprise and Employment Bill publication, raise as many questions as answers — one of which concerns the current methods of settling disputes — through the Pub Independent Conciliation and Arbitration Service (PICA-Service) and the Pubs Independent Rent Review Scheme (PIRRS).

With disgruntled tenants and lessees now in a position to hold out for something better, do PICAS and PIRRS have any future at all?

Save the Pub Group chairman Greg Mulholland MP is adamant that both services are now defunct, and that it is time to leave the “discredited” system of self-regulation behind.

 “There remains a need for an independent non-statutory body in the sector, but it needs to be taken out of the hands of the pubcos,” he insists.

Toothless tiger​

Other lobbyists are no less damning. Val Spencer, licensee at the Cock in Lavenham, Suffolk, who won a PICAS hearing against Enterprise Inns in 2013, “sincerely hopes” that none of PICAS in its current form survives. Meanwhile, Fair Pint campaigner and licensee Simon Clarke believes most tied pubs have realised self-regulation is a “fairly toothless tiger and, therefore, a waste of time and effort”.

In stark contrast, and as might be expected, the Pub Governing Body (PGB) — the board set up a year ago to oversee and provide greater transparency to PIRRS and PICAS — claims self-regulation has been a success.

In a statement, the PGB says: “PICAS has been instrumental in providing a cheap and flexible mechanism for tenants and lessees to have their cases heard by an independent body.

“The PGB is continually looking to make improvements, particularly in raising the profile of the low-cost service to both tenants and lessees and how they can access the support.”

While conceding that “it remains to be seen” whether the current model of self-regulation will survive reform, the PGB believes it will certainly continue at present, “as we believe in the effectiveness and impartiality of the self-regulatory system”.

Members of the PICAS panel, a mix of 30-plus representatives from in and outside the licensed retail sector, support the view that PICAS and PIRRS are still relevant — for now, at least.

Timescale​

“We only need to look at the Government’s history on timescales, with the 2003 Licensing Act not functioning until 2005,” argues Banwell House pubco MD Toby Brett. “If tenants wait for the new code [to resolve disputes], it may be too late for them.”

Fellow panel member David Jones, of David R Jones Accountants, agrees that the “wheels of change tend to grind slowly” with legislation. Added to that, Jones says there are a number of other things the industry has to organise before the statutory code can be in place. “Obviously, there’s the appointment of an independent adjudicator, but then there’s also the fact that all pubcos have to appoint a compliance officer,” he explains.

“As to whether licensees should wait for legislation, I would have thought that an adjudicator would still need to draw on the skills of independent experts, like accountants and surveyors. In that sense, I can’t see a statutory code doing more than the current voluntary code,” Jones adds.

Fair Pint’s Clarke concedes that the nature of the complaint should dictate whether it is best for licensees to wait or not. His primary concern now, however, is to campaign for amendments to the proposed code.

“At the moment, neither PICAS nor the proposed adjudicator can deal with anything material or meaningful but that could all change with amendments to the proposed code and adjudicators’ powers,” he claims.

Wherever you stand on the current model of self-regulation, with a statutory code likely to be years rather than months away, it’s all tied pubs have for now.

Trade united over Luff appointment​

One development that both sides of the pubco debate appear to have welcomed is the appointment of Sir Peter Luff as chairman of the Pub Governing Body (PGB), earlier this month.

Luff, who in 2009 chaired a Business Innovation & Skills Committee (BISC) report that was highly critical of tenanted pub companies, succeeds Bernard Brindley, who died in April.

The report accused major pubcos of “downright bullying” of their tenants, and recommended that the beer tie should be “severely restricted” by Government.

Save the Pub Group chairman and MP Greg Mulholland believes the future of the PGB depends on Luff.

“He is seen as someone with a good understanding of the sector and has earned a lot of respect,” Mulholland explains. “It will be interesting to see how he proceeds, but it is very important that he is seen to be independent.”

Mulholland’s view is echoed by campaigning licensee Val Spencer, who acknowledges Luff’s “wealth of knowledge and experience”. Spencer claims to have a “niggling reservation”, however, that the structure of the PGB may not allow him to be as effective and impartial as the role so desperately needs.

“I will be writing to Peter Luff myself in the upcoming weeks, and he has been kind enough to communicate with one publican within [campaign group] Licensees Supporting Licensees already, which is reassuring,” Spencer adds.

PICAS stats​

■ Total cases: 31
■ Active: 4
■ Stalled: 3
■ Closed:    
   By panel hearing: 9
By preliminary hearing: 3
By resolution of the complaint by both parties: 10
By applicant’s instruction to PICAS not to progress with complaint: 2
Figures correct as up to 25 February 2014​