My Lords, there will be a subsequent debate in respect of Clause 24 so I will speak generally to both clauses and pick up any further points in the subsequent debate. Clause 23 transfers responsibility for local land charges to the Land Registry, while Clause 24 confers additional powers on the Land Registry. Neither of these propositions can be divorced from the parallel proposition for a new model
of a Land Registry delivery company, which is widely believed to be a step along the way to privatisation of the service.
Just yesterday the Government pulled the plug—at least for the time being and, I am bound to say, not with good grace—by recognising that they would have to give further consideration to the complexity of their proposed new business strategy, including moving complex applications online and automating processes. There were high levels of disagreement anyway with the suggestion that an arm’s-length model would enable operations to be more efficient and effective or that such models would have the right checks and balances to protect the integrity of the registry. While reaffirming that they are moving ahead with the digital transformation, the Government have stated,
“at this time, no decision has been taken to change Land Registry’s model”.
While we should not be under the misapprehension that the threat has gone away, we should recognise that the news, unnecessarily delayed as it is, will come as some relief to the staff and to those who campaigned against the folly which privatisation would represent.
Mr John Manthorpe, a former Chief Land Registrar, has stated in a letter:
“The Land Registry is a successful and highly regarded department of government with a 150 year history. It makes no call on the exchequer and has a 97% customer satisfaction rating … It conducts its business impartially and free from any conflicts of interest. It grants and guarantees title on all transactions so providing the security of tenure and conveyancing machinery on which a stable society depends and without which the property, transfer and mortgage markets could not function”.
I could rest my case for this clause and Clause 24 not remaining part of the Bill at this point. If the Government have to hold back on their proposed plans for the Land Registry because they need to revisit the model to deliver their new business strategy, it is difficult to see how it could possibly take on responsibility for local land charges and more, largely unspecified, powers relating to that. There are some 20 million local land charges registered, with 65,000 updates every month.
There are further detailed arguments that deserve to be heard. For a start, the consultation on wider powers and local land charges was flawed. It was conducted by the Land Registry itself, which clearly had an interest in the outcome. There were concerns that it was overly focused on what would add value to the Land Registry, and that it was undertaken with at least half an eye to privatisation.
The Land Registry proposal is to take over the maintenance and searches of the register of local land charges. It argues that this is necessary because of a perceived lack of consistency and standardisation in the provision of local land charges. The World Bank ease of doing business survey marked the UK down on the ease of registering a business, including the speed of registering and transferring commercial property. This was also prayed in aid of the proposal.
However, the Law Society, in its submission to the consultation, expressed the view that in recent times local authorities and other providers have been producing search results in a timelier and more consistent manner and at a predictable cost. Indeed, the impact assessment
noted that there had been annual productivity gains of 2%. The Law Society expressed the view that while there is merit in seeking to create a single local land charge and CON29 service, most practitioners would not regard it as a priority for the Land Registry to address. It says:
“Having more consistent processes for discharging charges … could markedly improve and de-risk the process”.
Dealing with searches is just part of the conveyancing process. The Law Society’s conclusion is that the research conducted by the Land Registry does not demonstrate that there is a problem that needs to be resolved.
It is suggested that the speed of service conducted by local authorities is causing a problem in the conveyancing market. This is despite a recent survey indicating that the turnaround time for 96% of searches that involve only local land charges is less than 10 days, with three-quarters being returned within five days. Searches involving local land charges and CON29 have slightly less speedy performance but, as it is proposed that the latter stay with local authorities, it does not seem that overall search turnaround times will improve.
The District Councils’ Network has expressed concerns at the proposed separation of land charges to be undertaken by Land Registry from CON29 searches, which will remain the responsibility of local authorities. It considers that this fragmentation creates a risk of inconsistency, with the potential for errors and omissions. It says that insufficient weight has been given to the local knowledge that resides with local authorities, which are still generally the originators of the data. Local authorities will still incur costs in collating and supplying data, in maintaining a database and, presumably, for indemnity insurance—when there is no income stream from search fees. It also instances that many local authorities have made recent investments in digitalisation, for which no recovery is promised by the Land Registry.
As the Local Land Charges Institute points out, the original intention of the Land Registry was to take over and maintain the database for local land charges and CON29. However, having studied the proposition for over a year, it decided to abandon the idea. Therefore, as things stand, Clause 23 would mean a fragmented service, with no credible alternative being offered. The Council of Property Search Organisations—CoPSO—offers the view that the sector is currently operating well, with healthy competition. It says that the claimed postcode lottery is illusory and that there is no real problem to fix. Moreover, it suggests that the threat to local authority jobs could result in increased waiting times for searches, with consequent detriment to the housing market.
The Local Land Charges Institute argues: that the perceived problems with the land charge function has been overstated; that such problems as there are can be resolved more simply and with less cost; that the demand for the Land Registry takeover has been overstated; and that the Land Registry has failed to demonstrate a clear understanding of the processes and risks involved in the local land charge function and is proposing a worse service. It says that the Land Registry has failed to demonstrate how it will actually
provide the service and that the Land Registry has proposed a number of unsatisfactory business models over the past three years and now proposes to take over only half the service, providing less information to customers than local authorities currently do, leaving local authorities to undertake the more complex work and providing a fragmented service to customers.
The LGA expresses opposition, in particular making the point that the proposals will leave councils with the expense of adjusting systems, breaking existing contracts and paying redundancy costs. It says that over the longer term the costs to councils of compiling, checking and verifying data have not been properly accounted for in the analysis.
The opposition is glaringly obvious from the Government’s own consultation: 94% of respondents do not think that the Land Registry has considered all feasible options and 95% do not support the Land Registry taking over the local land charge function from local government. It is time to think again, as even the Government have recognised on their delivery company. It is time to remove the clause from the Bill.