Land Registry privatisation plan revealed

Land Registry workers to stage 48-hour strike over privatisation plans

Thousands of union members to walk out on 14-15 May as hundreds of jobs under threat from plans to privatise agency

The Guardian newspaper revealed online on Monday evening (05/05/2014) that government plans to privatise the Land Registry have been revealed in a leaked document.

Below is that article followed by one which was published in the Morning Star on 29th April 2014 written by Michael Kavanagh, president of the Public Service Union’s land registry group, in which he reveals that the group obtained a copy of the “feasibility study” written by well-known privateers KPMG – one of the world’s largest audit companies – under a freedom of information request. Coincidentally, several members of the shareholding executive  which currently run the Land Registry within the government department for Business, Innovation & Skills (BIS) come from KPMG.

The minister responsible is Michael Fallon who was the main mover in government for the botched and ludicrous privatisation of Royal Mail. The Law Society, high street solicitors, property search providers and the PCS were among the many voices who have voiced opposition to the notion of privatisation.

In 2011, KPMG was named as the World’s Best Outsourcing Advisors, which basically recognizes their skills to help companies get rid of good paying staff positions and farming them out to lower-paying, often questionable companies. KPMG International Cooperative is a Swiss entity. It is the coordinating entity for a global network of independent firms in 146 countries employing 140,000 people. Each KPMG firm is separate and legally distinct. In 2005, KPMG in the United States admitted to criminal wrongdoing and agreed to pay $456 million in fines, restitution and penalties as part of an agreement to defer prosecution of the firm concerning a multi-billion-dollar criminal tax fraud conspiracy.

The PCS Alternative Vision for HM Land Registry (which surely is one supported by TLIO) 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’.

Kavanagh: “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.”
(..I would add, so that all land is covered; of course privatisation would make that even more unlikely and information requests no doubt more expensive).

Land Registry privatisation plans revealed in leaked document
by Rajeev Syal, The Guardian online
Monday 5th May 2014

Former chief land registrar and unions express concern about possibility of private firms having a say in granting of land rights

The Land Registry is headed towards privatisation, in a move which will give private firms a say in the granting of land rights, according to leaked minutes from a meeting of its board members.

Former executives from the body, that registers the ownership of land and property in England and Wales, say that a sell-off “beggars belief” because it will allow the private sector to adjudicate on what can be conflicting interests between sellers, buyers, lenders and neighbours.

Documents seen by the Guardian show that far from still considering public ownership of the 150-year-old body as a viable option – as ministers publicly claim – senior civil servants are deciding between a joint venture between the government and a private company, or letting a private company run it as a so-called Govco.

Michael Fallon, the business minister responsible, had stated that options would be put out for a public consultation before any decision was made – and this would include the option of retaining the Land Registry as an executive agency of government.

Conservative ministers are in favour of a joint venture, sources say. But the Guardian understands that Vince Cable, the business secretary, will block Tory moves towards a joint venture as he argues that the government must keep tighter control of any potential private sector partners.

The disclosures follow criticism over the Royal Mail sell-offand fears that the coalition is in a rush to privatise a number of assets.

Minutes show that civil servants believe the government could raise £1.225bn from entering a deal with a joint venture company, marginally higher than the £1.1bn GovCo evaluation and that the registry’s board has appointed their head of legal services as a company secretary for a new venture but have not yet announced it.

John Manthorpe, the former chief land registrar, said that the minutes appeared to show that the board was going ahead with a policy of privatisation.

“Appointing a company secretary gives the game away that the consultation may be a sham. I am not aware of any government department having a company secretary. The registry board are thinking in company terms already.

“It is clear that the management board, which has negligible experience and understanding of land registration and its important role, are solely fixed on the privatisation of this important state asset without any regard to the practical, financial or legal consequences for the citizen and business,” he said.

He said the government had recognised that the statutory powers of the Chief Land Registrar (CLR) could not be passed to the private sector and has therefore proposed a small “Office of the Chief Land Registrar”, passing the major operational work where the legal decisions are made regarding land rights on every property transaction in England and Wales to a private company.

The minutes, on 10 pages of A4, were recorded at a four-hour board meeting on 25 March, days after an initial consultation on a new service delivery company had been closed.

The meeting was held in a hotel in Selsdon Park Hotel in Croydon, south London, away from Rregistry staff.

Ed Lester, its chief executive and former head of the Student Loans Company, whose tax arrangements were criticised for being paid through a service company, was also present.

Under the heading “business strategy”, the board appeared to discuss a KPMG presentation on the possibility of a private sector partner. The minutes record how the capital return would be under three blocks and note that “NPV [net present value] equalling £1.225bn, marginally higher than the £1.1bn GovCO valuation”.

The minutes also note that under option two – the joint venture company – there may be “insufficient risk transfer to the PSP [private sector partner]” as well as a “significant risk of industrial action.”

But nowhere in the minutes does the board consider the possibility of keeping the body as an executive agency of government.

On 9 April, Fallon told parliament: “The proposals in the consultation on the introduction of a Land Registry service delivery company are being considered against the option of remaining as is, and no decisions will be taken until all responses have been considered.”

Minutes show that the board congratulated legal corporate head Mike Westott Rudd for becoming company secretary at the registry, a new post created by the board. They show that Lester travelled with a colleague to Norway, a trip which cost more than £1,000, to meet representatives of Infoland, which is state-owned but is moving into a privatisation process. The minutes record that “it is possible that it could be easily transportable to the UK and we could use it to replace our portal”.

Downing Street has expressed an interest in future Land Registry deals, the minutes show. “Norway are keen for us to global partner them. They are interested in Bangladesh, who have approached them, and No 10 want us to go to Tanzania”, they disclose.

The Land Registry has a monopoly in the homeowner market as all property buyers have to use its services.

It made a surplus of £98.7m in 2012-13, up from £86.1m the previous year, while revenue slipped by 3% to £347m.

Critics have pointed out that when the original January consultation document was published, the government had not consulted the registry’s principal professional customers: the Law Society, representing conveyancers, and the Council of Mortgage Lenders, representing banks and building societies.

Staff at the Land Registry are expected to announce a two-day strike over the potential privatisation after managers failed to give assurances over compulsory redundancies or office closures.

Mark Serwotka, the head of PCS union, said: “We are very concerned that, despite clear opposition from staff, lawyers and other professionals, the government is lining up the Land Registry for privatisation for purely political reasons.”

A spokesman for the Department of Business, Innovation and Skills said a decision would be made shortly on whether to privatise the registry and that all options remained under consideration.

“The company secretary role is in connection with the existing Land Registry board. It is a newly created position in order to meet recognised best practice on board governance.

“For years, Land Registry’s remit has included sharing knowledge and expertise with other countries to develop effective land administration systems and processes,” the spokesman said. “Ed Lester’s visit to Norway was in relation to their digital property portal and has nothing to do with considerations around commercial models.”


Privatisation: Another Disaster in the making
Flogging off HM Land Registry could be the government’s next Royal Mail-type fiasco, writes MICHAEL KAVANAGH
29/04/2014, The Morning Star

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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