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The future of the Land Registry (Part 2) 24 March 2014

This is an update to my blog article “The future of the Land Registry” published on 14 March 2014, and in particular the second section, entitled “Introduction of a Land Registry service delivery company”.  This considered the current consultation that proposes that the Land Registry (or part of it) should be turned into a “service delivery company”.

The Law Society responded to the consultation on 20 March 2014 and it has published its response on its website.  You can see it here.  It is a very detailed piece of work, and is well worth a read.  We should all be grateful to those people (I do not yet know who they are, but I intend to find out) who have spent so much time crafting the finished product.

The Law Society is unconvinced that the suggested changes would serve a useful purpose, to put it mildly.  Among its more trenchant comments are the following:

The consultation paper seems to suggest that the [proposed service delivery company] will automatically be more efficient than a trading fund [as currently exists].  The creation of an organisation at arm’s length from Government does not of itself mean that it will be more efficient and effective.  (para 20)

The full rationale for the splitting of functions has not been supplied. The paper states that BIS considers that the Land Registry would benefit from a separation of policy and delivery, but does not explain why [my emphasis].  Such separation could lead to overlap of functions, confusion, excess administration and cost, particularly in the short term. (para 21)

We assume that much investigation, research and analysis has been carried out in order to arrive at the options proposed but this work has not been set out in the consultation.  The Government needs to be more specific about the benefits for the public of the proposals, particularly in view of the inherent risks.  Many parts of the paper state that users “should see little or no change” as a result of the split but this of itself does not support the proposal for change.  Benefits for users and the public need to be elucidated [my emphasis again]. (para 16)

At first glance, some of this reads like a typical conservative (with a small ‘c’) “If it ain’t broke, don’t fix it” knee-jerk reaction.  But that would be to underestimate the amount of thought and research that has clearly gone into its preparation.

One of the key concerns that is expressed is that the concept of “efficiency” is not compatible with a definitive and independent land register.  Consider the following comments:

Part of the reason that customers have confidence in Land Registry is the quasi-judicial, independent and impartial manner in which decisions are made.  This engenders and maintains confidence.  If quasi-judicial decisions were to be made on commercial grounds – for example, because it is administratively easier to make a quick decision rather than perhaps the ‘correct’ decision – this could lead to more regular challenges to the Register.  Similarly, if operational considerations began to affect the registration – for example, if fewer notifications were sent out in circumstances where another may have a right to object in order to achieve targets and minimise costs, rights could be lost in the short term.  This could also lead to more challenges to the Register. (para 61)

Any increase in litigation, even if there is some, admittedly watered down, sort of state guarantee, could erode the integrity of, and confidence in, the Register.  This could lead to people not trusting what is on the face of the Register.  The Register and any data sets flowing from it would gradually lose usefulness once the integrity of the Register has become impaired. (para 62)

We are … concerned that other non-registration services, which have no statutory controls on prices, could become the most important part of the business to shareholders of any privatised entity.  This could result in resources being diverted to these parts of the business rather than being invested in core registration services. (para 14)

The concern is also raised that the Government is simply not up to the challenge of overseeing the activities of such a vital privatised service delivery company:

Serious concerns have been expressed about the operation of outsourcing or control of private sector companies by government, as is evidenced below.  (para 116)

The PAC report into Private contractors and public spending 2014 says:

“Government is clearly failing to manage performance across the board, and to achieve the best for citizens out of the contracts into which they have entered.  Government needs a far more professional and skilled approach to managing contracts and contractors, and contractors need to demonstrate the high standards of ethics expected in the conduct of public business, and be more transparent about their performance and costs. The public’s trust in outsourcing has been undermined recently by the poor performance of G4S in supplying security guards for the Olympics, Capita’s failure to deliver court translation services, issues with Atos’s work capability assessments, misreporting of out of hours GP services by Serco, and most recently, the astonishing news that G4S and Serco had overcharged for years on electronic tagging contracts: these high profile failures illustrate contractors’ failure to live up to standards expected and have exposed serious weaknesses in Government’s capability in negotiating and managing private contracts on behalf of the taxpayer.” (para 117)

The report went on to say:

“There is significant scope for government to improve its approach to contracting for public services.  The Cabinet Office told us that there is a long way to go before government has the right commercial and financial skills to manage contracts and it needs to use the full range of powers at its disposal.  For example, the Cabinet Office told us that only a third of contracts are on an open-book basis and, even then, departments rarely use the access provided and have a shortfall in the capability required to do so.” (para 118)

You will have got the drift by now.  I could not see anything in the Law Society’s response that could remotely be described as scaremongering.  I hope that the Government reads this document extremely carefully, and appreciates this comment in the penultimate paragraph (para 157):

Users of Land Registry are looking for a quality service, operated by knowledgeable staff, backed by the guarantee of the state with a Register that has integrity, can be relied upon, and is at minimal risk of fraud and corruption.  This is, on the whole, what is being delivered at present.


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