The third annual statement of compliance has been conducted by the Pub Governing Body (PGB). This report highlights the main features of the survey of pub companies which had over 100 lease agreements in England & Wales, in regard to their performance under Version 6 of the Industry Framework Code (IFC).
EXECUTIVE SUMMARY
Background Information to the audit
In May 2014 the Pub Governing Body conducted the first annual compliance audit as required under the UK Pub Industry Framework Code of Practice v6 (IFC), paragraph 110. The audit was repeated in May 2015 with all companies operating 100 or more leases being required to participate in the auditing process and to submit their responses to the PGB.
The purpose of this report is to provide all industry stakeholders with the PGB findings arising from the survey, focusing on the following elements:
Who was audited as part of the process?
Participating companies for the 2015 – 2016 Report were:
The PGB can report that all six companies participated in the audit and their responses were received in advance of the deadline set by the board.
What content was audited by the PGB?
The audit was carried out by way of a questionnaire developed by the PGB board. The questionnaire covered the same ground as for the first audit period but included an additional question, asking companies to state how many rent reviews were outstanding as at the end of the period. The question was designed to bring further clarity to the position at the end of the year.
The annual statement of compliance was to provide details on a range of indicators from each Landlord Company and specifically made reference to the following topics;
a) The number of new agreements, both lease and tenancy agreements, entered into;
b) Compliance with pre-entry requirements and the use of any waivers in relation to the grant of new agreements;
c) The number of rent reviews and renewals that fell due during the auditing period and within what timescale these were concluded;
d) The number of complaints recorded by individual companies via their internal grievance procedure and how they were concluded.
The auditing period
The relevant period for the purpose of collecting data from the Landlord Companies for the inaugural audit was 1st May 2015 – 30th April 2016. The next auditing period will require Landlord Companies to supply the necessary data for the period covering 1st May 2016 – 30th April 2017.
COMMENTS FROM THE BOARD
This year’s report shows continued engagement by pub companies with the PGB and a welcome boost in the number of BDMs completing training, increasing from 63% in 2015 to 86% in 2016. The report also shows the number of rent reviews completed within 12 months falling to 60% although this could be explained by the changes in the market where pubs are being sold or converted from leases into tenancy agreements or managed houses.
The PGB will continue to oversee the code of practice for those pub companies not meeting the 500 outlet threshold for the Statutory Code.
Sir Peter Luff, Chairman of the Pub Governing Body said: “The results of this year’s annual report underlines the crucial role the Pub Governing Body continues to play following the implementation of the Statutory Code for Pubs.
“Two years ago we raised concerns around the issue of BDM training and it is very encouraging to see a considerable boost in the number of BDMs completing training.
PIRRS and PICA-Service
In total, there were 21 referrals to the Pubs Independent Rent Review Scheme (PIRRS) regarding rentals and one lease renewal. There were 27 enquiries to the Pubs Independent Conciliation and Arbitration Service (PICAS) from tenants.
It has also been encouraging to see lessees continue to engage with PIRRS and PICAS and an increase in the number of resolved complaints within the set timescale to 70%, closer to the 2014 high of 74.9%. PIRRS and PICAS represent a convenient, cost-effective method is dispute resolution for licensees and the PGB continues to play an active and valuable part in self-regulation of the sector.