Pub Companies - Business, Innovation and Skills Committee Contents

Written evidence submitted by Devon & Cornwall Business Services Limited

I watched a recorded session on BBC Parliament for your interviews of panels which included Ted Tuppin of Enterprise Inns. It was notable that under questioning Mr Tuppin appeared somewhat less than forthcoming and attempted to lead the committee off the question, which was picked up by one or two of your members.

In our dealings we come across Pubs which are Enterprise, Punch and Admiral as well as free houses.

Of all the Pubco's, Enterprise Inns seems to be the most unfair in the stable. To demonstrate I would like to take issue with one of my own field's comments that Ted Tuppin used to attempt to demonstrate Enterprise's commitment to being fair and ask for your opinion.

Ted Tuppin stated that they insisted that all new tenants and lessees had to have a qualified accountant to sign off their business plan and then retain that accountant for a period of a year. The accountants are contained on a list and age the only ones which Enterprise allows to be used. This is because they insist on "open book accounting" this is where Enterprise has full access to the books and records of the tenants. There are a number of problems:

—  No chartered Bodied Accountant (ICAEW, CIMA, ACCA, CIPFA) would automatically release such figures to any third party which is exactly what a Pubco is to the tenant or lessee - this is against the Data Protection Legislation so we would require Client's written permission. The Pubco's accountants do not.

—  The Pubco's accountants levy a monthly charge in excess of £250 a month which is a cost which many cannot afford. We for example look at volume of paperwork, condition of profitability and work with the client to try to improve the business.

—  Many of the accountants are far removed from the client and thus most transactions are by post!

—  Most of the Enterprise Accountants used by most Pubco's are not members of the Chartered Bodies of Accountants, therefore are qualified by buying a qualification rather than by studying and working for the qualification. HMRC are fighting against accountants like this who have in some cases swindled the Public Finances out of Millions of Pounds - one case in St Austell is for £1 million on its own.

—  One Accountant originally on the Enterprise inns list actually went into receivership.

What is amazing is that if a tenant moves site and wants to retain their own accountant this is not allowed by Enterprise whereas for Punch there is some flexibility, particularly if the accountant is known to a BDM or higher.

The question is whether the committee is happy for a Pubco like Enterprise to actually encourage unqualified accountants to exist by handing them business levels which they could not normally expect.

I think the committee should bring Enterprise Inns back to ask them why in this case they are actually forsaking a client's wellbeing so that they can look into the affairs of their tenant and raise rents as they push the pub's business up.

My add on point here is that the Pubco's probably are taking a commission from these accountants for the business levels introduced to them, in my view this is wrong they should act in the best interests of their tenants so that they keep occupancy of their pubs consistent.

I am grateful to you for taking the time to read this letter.

Nick Siddaway FCMA Director

11 July 2011

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Prepared 6 October 2011