Pub companies: follow-up - Business, Innovation and Skills Committee Contents


Supplementary memorandum submitted by the British Institute of Innkeeping (BII)

BACKGROUND

  BII have accredited company codes since 2007 through a scheme known as BII Benchmarking and Accreditation Services (BIIBAS). Currently seven codes are accredited, including Punch Taverns, but not currently including Enterprise Inns who have recently revised their code. We expect Enterprise to come forward shortly for re-accreditation. The accreditation process has focused on perceived reasonableness and clarity in how companies operate, and monitoring has been mainly reactive, involving responding to complaints from tenants that companies have not followed agreed procedures. Broadly, about a third of complaints are found to be out with the terms of reference of the scheme, often because they relate to technical aspects associated with rent setting. Of the remainder, most are found to be genuine breaches, but in the vast majority of cases, companies act on our recommendations, to the advantage of the tenant, and we are able to record these as resolved breaches. There have been two unresolved breaches this year. In these cases the tenant receives a letter to that effect, which they can then lever during rent review, or also potentially through the media. In future these will be publicly noted. A considerable amount of related case work happens through the BII Licensees support helpline. Only one code has been rejected outright, but others have withdrawn following suggestions of changes.

DEVELOPMENT

  As part of my initial review of BII's activities, I undertook a review of the accreditation process and concluded that the BIIBAS scheme was valuable, but had the potential to work harder for the tenants and the industry more generally. I was impressed with the time that went in to researching and responding to individual complaints, and the fairness of the conclusions. Whilst by its makeup, constitution, and work programme, BII is not fully independent, I saw what I felt were impartial, balanced and sophisticated judgments. However, I also felt that it could be improved, especially in the areas of transparency and holding pub companies to account. The steering committee agreed at its meeting on 30 July 2009 to strengthen the scheme with tighter monitoring and clearer reporting of outcomes. Critically, it agreed to make clear to existing and prospective tenants how companies are complying. A package of measures has been debated by the BII council and will be discussed with the BIIBAS steering group on 6 January. Separate to our inhouse review, there has been a wider industry negotiation process, an outcome of which was an agreement between BII, BBPA and the FLVA. This will have a knock on effect to individual company codes which we think will raise the bar for all. As BIIBAS code accreditation is now a condition of BBPA membership we will see more codes, and the importance of clear and consistent monitoring is increased.

THE FUTURE

  To strengthen the whole process we plan three changes: public reporting of overall company compliance, refreshing the governance with new chairs and committee members, strengthening licensee representation, and a sharper accreditation and monitoring process which crucially, will include both proactive sampling as well as reactive responding to complaints and the ability to remove accreditation of codes.

Monitoring

  There will be a new online and telephone process for registering complaints. A service level agreement will set response times, investigation and follow up arrangements. The complainant will be kept informed of progress. All complaints will remain confidential, with only summary information publicly reported.

  However, following the BESC inquiry and report, we are planning a new more proactive approach, where we will undertake a sample survey of lessees/tenants in order to ascertain broader satisfaction levels and elicit good practice and lower level concerns. Summary feedback will be published, and recommendations made to individual companies. An annual report will summarise all activity, outcomes and issues and will be made available to all those concerned with the industry and it is our intention to publish this information online. The accreditation process itself will broaden its focus to include the new industry agreement and subsequent BBPA code.

Reporting

  A new website will list all companies with codes and display them. We will then report and track all complaints, investigations, breaches, resolutions and where applicable, accreditation removal, in an open and transparent way. We are considering a section where companies can get credit for positive innovations in their codes. Prospective lessees/tenants (or their professional advisors) will be able to view this site before concluding the deal on a pub

Governance

  BIIBAS consists of two main committees, operating under clear codes of conduct. The steering group, consisting of eight members from across industry, which sets policy, will be chaired by Johnny Johnston, a very experienced businessman, licensee and lessee and member of BII council, with no current company connections. The accreditation committee, with 10 members, which reviews specific codes, will be chaired by James Brewster, chief executive of Licensed Trade Charity and Licensed Victuallers School. James is an experienced business man from the catering and hospitality industry, who understands commercial issues and is not specifically connected to pubcos, tenants or the BII. The committee membership will be broadened to ensure it is more representative, including the IPC voice.

Removal of accreditation

  We also intend to strengthen our response to non-compliance. Persistent code breaches will result in removal of accreditation. This is likely to be measured as both repetition of a particular non compliant practice or, that the cumulative picture exceeds an agreed ratio, benchmarked with other industries. Initial research suggests a figure of between 2% and 5% to be normal

7 December 2009







 
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