Memorandum submitted by the British Institute
of Innkeeping (BII)
RICS' PUB INDUSTRY
FORUM REPORT
AND RECOMMENDATIONS
BII fully supports the recent RICS report and
its recommendations. RICS has long been accepted as the key professional
body in terms of rent setting and rent review and BII will expect
pub company codes to abide by guidelines set out in the RICS code.
BBPA'S AGREEMENT
WITH BII AND
THE FLVA
BII has called for fairer rent setting, greater
transparency and more protection, training and support for new
and existing entrants. BBPA, whilst unable to address the full
Business and Enterprise Committee (BEC) report agenda, was able
to address certain aspects and felt able to make some improvements
in the areas of transparency and protection/support for both new
entrants and existing lessees/tenants. As these improvements are
a step forward, BII welcomed them, and agreed to monitor them
through the BII Benchmarking and Accreditation Services (BIIBAS)
scheme and company codes of practice.
BII must stand up for what is, or could be,
good for the industry, and these new commitments will make life
much better for new entrants as well as improving the rent review
position for existing lessees. We will hold BBPA members to this
commitment through a public website which will make visible pubcos'
performance against their new codes, once they have been benchmarked.
This will help prospective lessees make an informed choice about
leases and who to take a lease from.
BII's signing of the agreement has prompted
much debate within the industry, mostly played out through the
trade media. However, we stand firm by our decision as we believe
the improvements will benefit the industry as a whole.
There are many who feel that the industry agreement
contains actions that are merely good practice and they should
be happening anyway. BII can sympathise with that view but the
reality is they are not happening now and probably would not happen
systematically unless confirmed in writing. Hence, we wanted the
commitment detailed in a binding agreement which not only captures
that best practice but indeed goes further in many areas.
We are now working with the BBPA in order to
translate the signed Heads of Terms into a new Framework Code
of Practice. We are aware through ongoing communications with
the pub companies that they are in the process of working on their
individual codes of practice and incorporating the new commitments.
The BIIBAS scheme will become even more crucial
as the BBPA has made it compulsory for all its members to have
their codes accredited by the middle of 2010. BIIBAS is currently
being strengthened and we are introducing a series of measures
to increase availability, transparency and monitoring of codes.
We see that the more effective BIIBAS is, and
the more we can help to prepare newcomers to the industry, the
better life will be for everyone. However, in extreme cases where
tenant/landlord relationships have reached a major breakdown,
the newly introduced Pubs Independent Rent Review Scheme (PIRRS)
will be available to help negotiations reach a satisfactory conclusion.
THE PUBS
INDEPENDENT RENT
REVIEW SCHEME
PIRRS is another cross industry initiative which
has been established by the ALMR, BBPA, BII, FLVA and GMV. The
scheme is currently available in England and Wales and operates
by providing a transparent, legally binding, capped fee alternative
to rent review arbitration.
The scheme must be opted-into by both Landlord
and Tenant, who, in applying to use the scheme, must agree to
differ from the current terms of their rental agreement via a
Deed of Variation. The tenant then selects an independent Valuer
from the PIRRS panel to proceed with their case.
The independent Valuers have each been nominated
by one of the establishing board organisations. The Landlord must
accept the Tenant's chosen independent Valuer. Once the case is
passed to the Valuer by the PIRRS administration team, the capped
fee is paid by both Landlord and Tenant directly and the PIRRS
personnel have no further involvement in the case. The scheme's
processes and procedures are evaluated post case closure.
The PIRRS is currently piloting its first case
and aims to begin accepting cases from 1 December 2009. The
scheme will also launch in Scotland as soon as possible.
THE FORMATION
OF THE
INDEPENDENT PUBS
CONFEDERATION (IPC)
BII was not able to sign the IPC's manifesto
document but it does welcome the organisation's creation and the
focus it will bring. BII's remit is narrower than that pursued
by other groups in the IPC. That said, there will be times when
BII members' interests and industry interests are best progressed
through a common voice and in those instances it is right for
BII to support. We will also work with the IPC in campaigning
on common issues such as health, anti-social behaviour and mandatory
conditions.
THE FUTURE
As a professional body, it is right that BII
is the first stop for the fresh-faced coming into the industry.
We are currently working with industry to develop two new qualifications;
namely an introductory training unit to ensure newcomers fully
consider their legal and operational responsibilities even before
they've signed on the dotted line and a unit to ensure all BDMs/BRMs
are trained to a minimum acceptable standard. This will give newcomers
the chance to take on a tenancy or lease fully aware of what they
are signing up to and ensure a consistency of support across the
industry from BRMs/BDMs. Both initiatives address key points raised
by the BEC report. Furthermore, BII will be here to coach and
guide them through every step of their career in licensed retail.
BII sees this as the complete professional framework
of support: introductory training for those considering coming
into the trade; a portfolio of qualifications and support services
to assist their every need throughout their careers; benchmarking
and monitoring of pub company codes of practice through BIIBAS;
and PIRRS to step in as a last resort if a problem develops and
negotiations reach an impasse.
ONE FURTHER
POINT
With the recent announcement of the new rateable
values, licensees up and down the country are being hit with further
increases to their overheads. Some BII members have reported rate
increases in excess of 100%, and even higher rises have been mentioned
on the trade press online forums. We are putting in place a widespread
package of support for BII members, including a roadshow of events,
a Q&A and live forum available via our website and an expert
helpline for people to call with their individual queries.
We mention this because it is just one of the
many economic pressures imposed on operators in the industry.
It should not be forgotten that they also have the imminent VAT
increase to accommodate.
20 November 2009
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