Pubcos warned over compliance with Industry Framework Code

29-Jan-2015 - Last updated on 29-Jan-2015 at 15:38 GMT

PGB chairman Sir Peter Luff: 'We are concerned to see business plans being waived with increased regularity'

Pub companies are increasingly waiving business plans when granting new lease and tenancy agreements, resulting in them being non-compliant with the Industry Framework Code (IFC), according to a new report from the Pub Governing Body (PGB).

The body also flagged up large numbers of contracted-out agreements and low levels of business development managers that have completed training in accordance with the IFC as two other areas of concern, following its first annual compliance audit of the seven pub companies that operate 100 or more leases.

The PGB stressed that it “does not consider it to be compliant that business plans are waived, regardless of the implied ability to do so under the IFC, and would strongly advise that no business plans are waived going forward”.

The PGB told pubcos to ensure that any BDMs awaiting training are not engaged in rental negotiations on behalf of the company.

It added that while it was “happy” rent reviews were being completed on time, there was scope to improve the timing of resolution of both rent reviews and renewals for some pubcos.

Regarding assignments, it told the pubcos it was “the responsibility of all parties to the assignment, assignor and landlord company, to ensure that the assignee complies with all pre-entry requirements as would be required if the agreement was offered as a direct let”.

Despite this, the body, which is responsible for establishing the rules of governance and case protocols for the Pubs Independent Rent Review Scheme and Pubs Independent Conciliation and Arbitration Service, said it has seen good levels of compliance with the code.

'Concerned'

Pub Governing Body chairman, Sir Peter Luff MP, said: “We are concerned to see business plans being waived with increased regularity. There is also clearly room for improvement in BDM training.

“Overall, though, the level of compliance has been good and we commend those who are taking steps to ensure high levels of competency.

“We also emphasise that, until the Government’s Statutory Code for pubs takes effect, we remain well-placed to provide judicious, impartial and practical help for lessees who may be encountering issues.

“The audit has shown that landlords are willing to engage both with the PGB and their tenants, but I cannot stress enough the importance of the PGB’s continuing value to landlords and tenants. We intend to continue to work for an increasingly successful industry and one in which there are ever higher levels of professionalism and trust.”

The audit was carried out by a questionnaire developed by the PGB board and covered the year from 1 May 2013. The audited pub companies were: Admiral Taverns, Enterprise Inns, Greene King, Marston’s, Punch Taverns, Spirit Pub Company and Star Pubs & Bars.

Download the report below