Small Business, Enterprise and Employment Bill (HL Bill 57)

(1) 15The Minister for the Cabinet Office or the Secretary of State may by regulations
impose on a contracting authority duties in respect of the exercise of its
functions relating to procurement.

(2) For the purposes of this section “the exercise of functions relating to
procurement” includes the exercise of functions in preparation for entering
20into contracts and in the management of contracts.

(3) Subject to subsection (4), “contracting authority” means a contracting authority
for the purposes of regulation 3 of the Public Contracts Regulations 2006 (S.I.
2006/5), or any regulation replacing that regulation, as from time to time
amended.

(4) 25But such an authority is not a contracting authority for the purposes of this
section if its functions are wholly or mainly devolved functions, namely—

(a) Scottish devolved functions, that is to say functions the exercise of
which would be within devolved competence (within the meaning of
section 54 of the Scotland Act 1998);

(b) 30Northern Ireland devolved functions, that is to say functions which
could be conferred by provision included in an Act of the Northern
Ireland Assembly made without the consent of the Secretary of State
(see sections 6 to 8 of the Northern Ireland Act 1998), or

(c) Welsh devolved functions, that is to say functions which could be
35conferred by provision falling within the legislative competence of the
National Assembly for Wales (as defined in section 108 of the
Government of Wales Act 2006).

(5) Regulations under this section may, in particular, impose—

(a) duties to exercise functions relating to procurement in an efficient and
40timely manner;

(b) duties relating to the process by which contracts are entered into
(including timescales and the extent and manner of engagement with
potential parties to a contract);

(c) duties to make available without charge—

(i) 45information or documents;

(ii) any process required to be completed in order to bid for a
contract;

(d) duties relating to the acceptance of invoices by electronic means
(including a prohibition on the charging of fees for processing such
5invoices, the publication of reports relating to the number of such
invoices received or the electronic systems that must be used by a
contracting authority);

(e) duties to publish reports about compliance with the regulations.

(6) A person making regulations under this section must before making the
10regulations undertake such consultation as the person considers appropriate.

(7) The Minister for the Cabinet Office or the Secretary of State may issue guidance
relating to regulations under this section.

(8) A contracting authority must have regard to any guidance for the time being
in force under this section.

(9) 15Guidance or revised guidance given under this section must be published.

(10) Regulations under this section are subject to negative resolution procedure.

39 Investigation of procurement functions

(1) In this section “a Minister” means the Minister for the Cabinet Office or the
Secretary of State.

(2) 20A Minister may investigate the exercise by a contracting authority of relevant
functions relating to procurement.

(3) A Minister may by notice require a contracting authority to provide such
documents or other information, in such form or manner as the Minister may
direct, as the Minister may require for the purposes of an investigation under
25this section.

(4) A contracting authority must—

(a) give a Minister such assistance with an investigation as is reasonable in
all the circumstances of the case;

(b) comply with a notice under subsection (3) before the end of the period
30of 30 days beginning with the day on which the notice is given.

(5) In this section—

• “contracting authority” has the same meaning as in section 38, but does
  not include a Minister of the Crown or a government department;

• “a relevant function relating to procurement” is a function to which—

  (a)

  35the Public Contracts Regulations 2006 (S.I. 2006/5S.I. 2006/5) apply,
  disregarding for this purpose the operation of regulation 8
  (thresholds),

  (b)

  the Defence and Security Public Contracts Regulations 2011 (S.I.
  2011/1848) apply, disregarding for this purpose the operation
  40of regulation 9 (thresholds), or

  (c)

  the Public Contracts (Scotland) Regulations 2012 (S.S.I. 2012/
  88) apply, disregarding for this purpose the operation of
  regulation 8 (thresholds);

• a reference to regulations includes a reference to any regulations
  45replacing those regulations, as from time to time amended.

(6) An investigation under this section may also include an investigation of—

(a) preparations for the exercise of a relevant function relating to
procurement, and

(b) the management of a contract entered into in the exercise of such a
5function.

(7) But the exercise of a function—

(a) by—

(i) the governing body of a maintained school (see section 19 of the
of the Education Act 2002), or

(ii) 10a person who is the proprietor of an Academy (see section 17(4)
of the Academies Act 2010 and section 579(1) of the Education
Act 1996), or

(b) which is regulated by the National Health Service (Procurement,
Patient Choice and Competition) (No. 2) Regulations 2013 (S.I. 2013/
15500) (functions relating to the procurement of health care services for
the purposes of the NHS),

may not be investigated under this section.

(8) A person conducting an investigation under this section may publish the
results of the investigation.

20Part 4 The Pubs Code Adjudicator and the Pubs Code

The Pubs Code Adjudicator

40 The Adjudicator

(1) A Pubs Code Adjudicator is established.

(2) 25Part 1 of Schedule 1 makes provision about the Adjudicator.

(3) Part 2 of that Schedule contains the Adjudicator’s powers to require
information.

(4) Part 3 of that Schedule contains amendments consequential on the
establishment of the Adjudicator.

30The Pubs Code

41 The Pubs Code

(1) The Secretary of State must, before the end of the period of one year beginning
with the day on which this section comes into force, make regulations about
practices and procedures to be followed by pub-owning businesses in their
35dealings with their tied pub tenants.

(2) In this Part the regulations are referred to as “the Pubs Code”.

(3) The Secretary of State must seek to ensure that all provisions of the Pubs Code
are consistent with the principle of fair and lawful dealing by pub-owning
businesses in relation to their tied pub tenants.

(4) The Secretary of State must seek to ensure that any provisions of the Pubs Code
which apply only in relation to large pub-owning businesses are also
consistent with the principle that tied pub tenants should not be worse off as a
result of any product or service tie.

(5) 5The Pubs Code may, in particular—

(a) contain requirements as to the provision of information by pub-owning
businesses to their tied pub tenants;

(b) require pub-owning businesses, in specified circumstances, to provide
the following assessments in relation to their tied pub tenants—

(i) 10rent assessments, or

(ii) assessments of money payable by the tenant in lieu of rent;

(c) make provision about the information that such assessments must
contain and how they are to be calculated and presented;

(d) specify that such assessments must be conducted in accordance with
15provisions of documents specified in the Pubs Code;

(e) where any document is specified for the purposes of paragraph (d),
refer to the provisions of the document as amended from time to time;

(f) impose other obligations on pub-owning businesses in relation to their
tied pub tenants.

(6) 20The Pubs Code may require large pub-owning businesses to provide parallel
rent assessments in relation to their tied pub tenants in specified
circumstances, and in connection with such provision—

(a) may confer on the Adjudicator functions in relation to parallel rent
assessments,

(b) 25may require the payment of a fee by tied pub tenants to the Adjudicator
in connection with the exercise of those functions, and

(c) may make provision corresponding to that mentioned in subsection
(5)(c), (d) and (e).

42 Pubs Code: market rent only option for large pub-owning businesses

(1) 30The Pubs Code shall include a Market Rent Only Option to be provided by
large pub-owning businesses in respect of their tenants and leaseholders.

(2) A Market Rent Only Option means the right of the tenant, or leaseholder, of a
pub owned by a large pub-owning business, to be offered such tenancy or lease
in exchange for an independently assessed market rent paid to the pub-owning
35business and, for the avoidance of doubt, not thereafter being bound by “a tie”,
meaning an agreement meeting, in whole or in part, Condition D as defined in
section 65(5) of this Act (obligation to buy from the landlord, or from a person
nominated by the landlord, some or all of the alcohol to be sold at the
premises).

(3) 40For the purposes of this section, the definition of Condition D in subsection (2)
is to be interpreted to include an obligation to buy or contract for goods and
services other than alcohol.

(4) For the purposes of this section, the definition of a “large pub-owning
business” is a business which, for a period of at least six months in the previous
45financial year, was the landlord of—

(a) 500 or more pubs (of any description); and

(b) one or more tenanted or leased pub.

(5) The Pubs Code may include provisions to permit a brewery which qualifies as
a large pub-owning business to continue to require that specified brands
produced by that brewery (required products) are sold within its tenanted or
leased pubs—provided that such tenants and leaseholders are free to purchase
5such required products from any supplier.

(6) The Pubs Code shall contain provisions requiring that the offer of a Market
Rent Only Option to a tenant—

(a) at the point of lease, tenancy contract or other agreement renewal, or at
rent review or five years from the date of the previous rent review;

(b) 10when the large pub-owning business gives notice of, or imposes,
(whichever is the earlier) a significant increase in the price at which it
supplies products, goods or services (falling under subsections (2) or
(3)) to the tenant;

(c) when a large pub-owning business implements, or gives notice of, a
15transfer of title;

(d) when a large pub-owning business goes into administration; or

(e) upon an event outside of the tenant’s control, and unpredicted at the
time of the previous rent review, that impacts significantly on the
tenant’s ability to trade.

(7) 20The terms of an offer under subsection (6) shall include provision for a 21 day
period of negotiation, commencing from the tenant giving notice of an
intention to pursue a Market Rent Only Option, in which the large pub-owning
business and the tenant may seek to negotiate a mutually agreeable Market
Rent Only settlement.

(8) 25Following the negotiation period under subsection (7) there shall follow a 90
day period of assessment. In this period—

(a) an independent assessor shall be appointed with the agreement of both
parties by joint private instruction and on the basis of an equal
apportionment of costs; and

(b) 30under arrangements and criteria that the Adjudicator shall establish,
such an assessor shall be—

(i) independent of both parties; and

(ii) competent by virtue of qualification and/or experience.

(c) if the business and tenant cannot agree on an appointee then a person
35shall be appointed, on the application of either party, under
arrangements established by the Adjudicator;

(d) the appointed assessor shall then assess the market rent for the
property operating as a pub with no “tie” as defined in subsection (2)
and submit to both parties the resulting sum for such a rent; and

(e) 40at the time of the three month assessment period, the tenant shall have
the right to pay no more than the sum determined under paragraph (d)
to the pub-owning business and, if previously one party to a “tie” as
defined in subsection (2), shall no longer be bound by it.

(9) The Pubs Code shall contain such measures as ensure that—

(a) 45the Market Rent Only Option is conducted in accordance with timing
provisions and procedures, in accordance with RICS guidance, as
specified in the Pubs Code; and

(b) large pub-owning businesses are prohibited from acting or
discriminating against any of their tenants who choose the Market Rent
50Only Option.