Friday, 10 June 2016

Who will adjudicate the adjudicator?

It doesn't look as though the anger over the appointment of Paul Newby to the new post of Pubs Code Adjudicator (PCA) by the BIS secretary Sajid Javid is likely to dissipate soon. Newby has conceded that he has worked mainly for Enterprise, Punch and Marstons over the last five years, but either does not, or chooses not to, understand that his new role could bring him into conflict with his former paymasters. However, this matter goes further than that.

Newby was a director of Fleurets, which describes itself as a 'UK business property valuers and surveyors specialising in pubs, hotels, restaurants, licensed property and business properties for sale and to let.' He resigned as director a couple of months ago, but still owns an 11.52% stake in the company. The company hasn't been doing well in recent years and the directors and their spouses had to make secured loans to it of £2.5 million, with further unsecured loans of more than £600,000. We don't know the size of Newby's loan, but it is clear that he still has a major financial interest in Fleurets' survival.

Pub companies pay Fleurets more than a £1 million a year for its services, and should Newby decide to adjudicate against them, they may well take their custom elsewhere; Fleurets would then collapse, taking his investment with it. LibDem MP Greg Mulholland's assertions that Newby would not be independent as PCA have been branded a 'disgraceful set of slurs' by BIS minister Anna Soubry, but her mock-indignant huffing and puffing does not address the fact that Newby stands to lose a lot of his own money if pubcos decide to punish his company for any adverse decisions he might make in his PCA role.

It is not hard to see why Newby lacks credibility among the people who would have to rely on him to adjudicate on disputes with their landlords, given that the latter are major customers of the company in which he has a big shareholding and which owes him a lot of money. Is this a gigantic cock-up? Or were pubcos persuaded to accept the creation of the Pubs Code on the basis that the adjudicator would be someone whom Sir Humphrey Appleby would describe as 'sound'? Either way, if the government is serious about the code, it needs to back down and appoint another, more obviously independent, person to the job.

The only surprising thing about this whole affair is how the government has walked blindly into a controversy that was both foreseeable and avoidable.

Main sources: Private Eye and The Morning Advertiser.

4 comments:

  1. Do you have any suggestions as to who would be a better candidate?

    ReplyDelete
    Replies
    1. Well, I'd suggest practically anybody else!

      Delete
    2. I would say it needs to be someone from outside the industry so there is no perception of a conflict of interest.

      Delete
  2. What inclines me against the cock-up theory is that this government normally puts little store by insider knowledge. For example, you get people from business being given senior public sector roles. Here they have cited being an insider as an advantage, contrary to their usual approach of saying that top managerial and administrative skills are transferable.

    Who would I suggest? Perhaps an experienced judge or other lawyer.

    ReplyDelete

Comments, including disagreements, are welcome.
Abuse and spam are not and will be deleted straight away.