Land Registry privatisation: Tory committee chair Bernard Jenkin warns against sale for a "quick profit"

Written by Matt Foster on 28 July 2016 in News
News

The Land Registry "must remain an essential arm of the state", says Conservative committee chair Bernard Jenkin, amid doubts over whether the government's privatisation plans will go ahead

The government must not allow the Land Registry to be sold off to a private firm looking to turn a "quick profit", senior Tory MP and select committee chairman Bernard Jenkin has warned, as he became the latest figure to express concern about the controversial privatisation plan.

The then-Department for Business, Innovation and Skills announced earlier this year that it wanted to move the Land Registry – which keeps an up-to-date register of property transactions in England and Wales – to the private sector by 2017, as part of wider plans to raise £5bn for the Treasury by selling public assets.

But the plans – which represent a second attempt to privatise the organisation currently employing more than 4,000 civil servants – have been attacked on a number of fronts since they were announced in March.


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The Open Data Institute has warned that a sell-off could inhibit the government's open data agenda, while the Competition and Markets Authority has suggested that handing over control of property data to a private firm could raise monopoly concerns. 

Meanwhile, seeking to push back against the argument that a privatised Land Registry would be more efficient, unions have pointed out that the organisation, which covers its costs by charging fees, already returns money to the Treasury and also has cut staff numbers drastically since the 1990s.

"While I am not opposed to the general principle of privatisation, the Land Registry must remain an essential arm of the state" – PACAC chair Bernard Jenkin

Jenkin, who chairs the cross-party Public Administration and Constitutional Affairs Committee, has now written to ministers to say that while he understands the "need for sound public finances" and the Treasury's desire to maximise returns through a sale, the Land Registry is "a national asset, and a public good which must be generally available to all".

"It provides an essential public service by underpinning housing supply, home ownership and economic growth," he writes.

The PACAC chair adds: "Therefore, while I am not opposed to the general principle of privatisation, the Land Registry must remain an essential arm of the state, the data must remain in state ownership, and the quality of service provided to the public by Land Registry must of course have priority over attempts to maximise a capital gain and to transfer risk from the government's balance sheet."

"Short-termist"

While Jenkin stops short of opposing the privatisation outright, he says any commercialisation of the Land Registry must take into account that the organisation is "a piece of critical national infrastructure", and says government must build in safeguards to ensure it can be taken "back into state hands without any interruption of service" if the private sector fails to fulfil its obligations.

Any future owner of the organisation must, he adds, be "committed to long-term stability and continuity", with the PACAC chair suggesting a pension fund or insurance group could be a "suitable match" for sensible ownership.

"An investor with a short-termist view, aiming to turn a quick profit at the expense of the quality and security of an essential public service, would be wholly inappropriate," he writes.

The government's consultation on its plans argues that a private owner for the Land Registry "could bring new knowledge and investment into the organisation", ensuring that it "accelerates its transformation into a more efficient and effective service delivery organisation".

But although the PACAC chair says he believes the organisation's progress at adapting to the digital revolution "has been slow", and agrees that freeing it from "the constraints of Treasury rules" could open up investment opportunities, he says this should not be seen as a "clinching argument" for privatising the agency.

"It could be argued that private capital will cost more than money raised by Treasury" – PACAC chair Bernard Jenkin

The same reforms could, Jenkin argues, "be achieved if the statutory functions continued to be delivered by the government, and the government provided the necessary borrowing facilities."

"Indeed, it could be argued that private capital will cost more than money raised by Treasury," he adds.

Jenkin is not the only Conservative MP to express disquiet about the Land Registry plans in recent weeks, with fellow Tory Will Quince, a former property solicitor, saying in a commons debate on the sell-off proposal earlier this month that the government had "misunderstood what the Land Registry is fundamentally about".

"While the Land Registry can, at times, feel clunky and hugely frustrating for property professionals, at its heart it is based on the principles of integrity and impartiality, and I fear it is that that we put at risk if we accept the proposals to privatise," he told MPs.

The slim, 12-seat parliamentary majority enjoyed by the government has raised doubts over whether plans that have attracted criticism from MPs across the House will be able to command enough support to get through.

Responding the MPs concerns during the debate, business minister George Freeman acknowledged that it did "not require many people to take a different view from the government of the day in order for us to assess the likelihood of getting a measure through".

He added: "I have no idea what those currently looking to form the new administration will want to do when they are in office, but anyone listening to the debate will have heard loud and clear the view of those who have spoken on both sides of the House.

"If anything is to be done to look at the future of the Land Registry, it will need to be clearly focused on solving particular problems that exist today and dealing with specific issues that need to be addressed."

"Data has been lost"

Elsewhere in his letter to the government, Jenkin also expresses concern about the impact of a sale on the government's commitment to make vital data available to the public on a free and open basis, saying there is a "real and unavoidable tensions" between the profitability of the Land Registry and plans to open up data sets.

"Nowhere else has the privatisation of a public sector asset resulted in greater access to its open data for the public at large," he adds. "Indeed, the experience has generally been that data has been lost, and its overall value to the economy has been diminished".

Jenkin says the government must not allow the privatised company to profit from selling data, backing the Open Data Institute's warning that restricting access to data could harm the wider economy, and saying that the Office for National Statistics should be given a "daily" feed of all the Land Registry's new records.

He concludes: "If the government decides to privatise Land Registry operations then in two years' time, I expect PACAC will wish to call BIS/UKGI in to discuss what effect this move has had on the publication of data."

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Matt Foster
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Matt Foster is CSW's deputy editor. He tweets as @CSWDepEd

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