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Privatisation: Another disaster in the making

Flogging off HM Land Registry could be the government’s next Royal Mail-type fiasco, writes MICHAEL KAVANAGH

HM Land Registry has been a part of central government since its creation in 1862, when it was formed to create security of title to land as an impartial arm of the state. 

The staff make quasi-judicial decisions on thousands of property transactions on a daily basis and record and maintain the register that contains details including house and land purchases, rights, remortgages and other secured debts. 

The Land Registry holds a large amount of personal and financial information, including land ownership, price paid information and details of third-party interests such as loans and court orders.   

As a “trading fund” it makes no call on the taxpayer, as it is entirely funded by transaction fees and — because it is so efficient — it is able to pay a sizeable dividend to the Treasury on an annual basis. 

It has also been able to reduce registration fees as a result of its success.

For 149 years it was part of the Ministry of Justice (MoJ) and predecessor departments. 

In 2013 machinery of government changes moved it to the Department of Business, Innovation and Skills (BIS) under Secretary of State Vince Cable. 

Within BIS, the Land Registry is under the control of the shareholder executive, which also controls Ordnance Survey, the Met Office and Companies House.

Since the early 1970s the Land Registry has been subject to seven studies into possible privatisation. 

These studies, undertaken by both Conservative and Labour governments, have each unequivocally concluded that privatisation would be utterly wrong and against the public interest. 

The most recent “feasibility study,” however, sought to answer the question “how would you privatise HM Land Registry?”

The study was carried out following the coalition government’s 2010 comprehensive spending review. 

The then parent department, MoJ, commissioned the well-known management consultants and privateers KPMG to carry out this study. 

Coincidentally, several members of the shareholder executive hail from KPMG, including its chief Mark Russell. 

The KPMG report, obtained by PCS under freedom of information, concluded that the best way to privatise the Land Registry would be to firstly vest it into a government-owned company, which — surprise surprise — was one of the options contained within the government consultation, which closed on March 20.

The other consultation options included a joint-venture partnership and contracting out almost the entire delivery side of the Land Registry. 

Each of the options included the retention of a small office of the chief land registrar within government, to deal with statutory elements. 

This was an unsuccessful attempt to reassure the public and legal profession that state guarantee of title and service levels would be protected. 

The minister responsible, Michael Fallon — architect of Royal Mail privatisation — has assured PCS that the status quo is an option, although this was not clearly stated in the consultation papers.

The consultation has brought together a broad coalition hostile to any change of business model for the Land Registry, including the Law Society, high-street solicitors, property search providers, various other groups and, significantly, former chief land registrar John Manthorpe, who is widely regarded as one of the world’s leading authorities on land registration. 

We are aware that there have been over 300 responses lodged with BIS and that the vast majority are extremely hostile to the notion of privatisation. 

The publication Today’s Conveyancer even tacitly supported the notion of the Land Registry’s workforce taking industrial action to defend jobs and services.

The main reason that privatisation would be utterly wrong is that it would be impossible for a private company to retain the impartiality and integrity that currently exists. 

Introduction of a profit motive would inevitably lead to different priorities. 

PCS and others argue that this would affect the quality and accuracy of service and the security of the data we collect and hold. 

We also argue that concurrent consideration on what Land Registry would look like, including under the government’s “digital by default” strategy, would inevitably force up the cost to the public and potentially put small high street conveyancing firms out of business. 

Further, the PCS Alternative Vision For HM Land Registry, authored by Professor Roger Seifert, makes the case that the land register — currently covering around 80 per cent of the land in England and Wales — must be completed to create a quasi-Domesday Book for the 21st century. 

This would allow for a proper public debate on land ownership and pave the way for regulation of the planning of land use in the future, something which the Land Registry could carry out for the public good. 

We have also been pressing for the creation of a central register of landlords. None of the progressive opportunities would interest a private provider, whose sole interest would be the pursuit of profit.

It would appear, though, that the sound arguments we and others have put forward may not be sufficient on their own to prevent this government from hiving off the Land Registry to the private sector. 

We have seen what has happened with Royal Mail and what is taking place within education and the National Health Service. This is a shameless act of transferring public assets into private pockets. 

PCS members at the Land Registry know full well what is at stake here and we are gearing up for a programme of industrial and political action to defend this secure and widely respected public institution.

Michael Kavanagh is president of the Public Service Union’s land registry group.

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