Pub operators ‘incensed’ by PCA response on MRO

09-Jul-2017 - Last updated on 10-Jul-2017 at 11:58 GMT

Bone of contention: leading pub operators react to PCA's statement defending slow MRO progress

A group of leading pub operators said it is “incensed” by a response from the pubs code adjudicator’s (PCA) office to concerns it raised last week about the PCA’s slow progress on market-rent-only (MRO) option cases and the mounting costs related to them.

The group sent a joint letter sent to Government minister Marcus Jones (on 3 July), signed by 12 operators, describing the PCA as "a rabbit in the headlights" over its management of the MRO option.

In response to the letter, the PCA sent The Morning Advertiser (MA) a statement that defended its progress as “reducing risks” by ensuring the correct procedures are followed.

The PCA said it recognised there is “frustration” over some of the first cases going through this process but said all cases referred to the adjudication body are being dealt with in “a proper and lawful manner”.

Operators angered

However, the response has angered the group of operators, who told MA: “We are incensed by the nature of the reply that has some suggestion that the inactivity of the PCA has somehow reduced risk for the parties to the MRO process.

“The lack of understanding and lack of direction by the PCA shows that the legislation is not fit for purpose.”

The operators said the PCA statement brings adjudicator Paul Newby’s appointment “further into question because it displays a lack of impartiality”.

“None of us objected to his appointment and we were happy to allow his actions to speak for him,” they said.

“However, at this stage, there has been no action and a statement such as this [from his office], which looks to favour short-term income protection of the pub-owning businesses, simply makes us question his motives,” said the operators.

Call to act with urgency

The 12 operators said they are not asking for favours on any single cases, but that the PCA “acts with urgency on all cases, which are now becoming a backlog”.

The nature and complexity of the legislation “necessitates that tenants need professional advice”, said the group of operators, but that direction from the PCA is “absent”.

“The only beneficiary of any delays will be the landlord pub-owning businesses that continue to receive the greater part of the pub profit during the MRO process,” they said.

“The only risk reduced is the risk to the pub-owning business tied income while the tenant appetite or ability to pursue the process is severely tested”.

In response a spokesman for the PCA said: "The PCA is disappointed with the operators' response which does not reflect what the PCA has said.

"There is a risk of legal challenge to arbitration decisions if the cases are not progressed lawfully (which includes arbitrating impartially without pre-judgement). A legal challenge only delays the process and adds further costs for the parties.

"There is no backlog of cases awaiting a decision by the PCA. The cases before the PCA are at varying stages, with varying degrees of input needed by the arbitrator to ensure that all relevant evidence and information is brought forward so a lawful decision to be made.

"Paul Newby has been extremely open about his pre-existing interests in his former employer. They do not have any impact on the decisions he takes."