Ministers have set out fresh plans to privatise the Land Registry – triggering fierce criticism from both the PCS union and the Labour party.
Chancellor George Osborne announced last autumn that the government intended to move the Land Registry – which keeps an up-to-date register of land ownership in England and Wales – to the private sector by 2017, as part of wider plans to raise £5bn from government asset sales. The latest proposals mark a second attempt to change the ownership of the organisation, after the coalition government shelved plans to part-privatise the Land Registry in 2014.
A consultation on the latest proposals – published late last week, just ahead of the Easter break – makes clear that the organisation's registers would continue to be owned by government, but argues that "there is no need for the core functions of the Land Registry to be delivered by civil servants".
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The consultation says Land Registry is "at a critical point in its existence", and argues that a new owner "could bring new knowledge and investment into the organisation" to ensure it "accelerates its transformation into a more efficient and effective service delivery organisation with clear contractual obligations and controls to meet appropriate standards".
Under the preferred model outlined by government, a dedicated contract management team could remain in government to ensure the new company (referred to as "NewCo") sticks to agreed service standards, retaining "auditing and monitoring rights" over the organisation.
"This body should have an understanding of land registration, and an ability to agree changes in the scope or standards set for the NewCo in the future. This might include the ability to manage a contract if required," it adds. Government would also continue to provide a state-backed guarantee to customers who suffer a loss as a result of mistakes in the register, the consultation adds, and says that public sector organisations will continue to have free access to open data provided by the LR.
However, the government says that it "would expect the majority of staff undertaking Land Registry operations and functions to transfer into NewCo" under the privatisation, and says it will "engage with Land Registry trade unions on any changes that may affect staff".
"Short-term political choice, not economic necessity"
According to the latest data, Land Registry employs some 4,500 civil servants working over 14 offices in England and Wales, down from around 12,000 in the 1990s.
In 2014/15 it more than covered its £260.5m running costs through fees, generating revenues of £297.1m. But the consultation puts this operating surplus down to "higher than forecast volumes of transactions in the housing market" and points out that this money cannot be put towards other public spending aims.
PCS – the largest of the civil service unions – has already hit out at the consultation, however, pointing out that the previous attempt to gather views on privatisation under the coalition government met with few calls for change.
The union said: "The major concerns expressed then, still remain: that the Land Registry is successful, popular and trusted; it is crucial to the property market and self-financing; no case can be made for putting at risk what clearly works by introducing the profit motive into the sensitive area of state registration of land."
PCS general secretary Mark Serwotka said the plans appeared to be driven "by short-term political choice, not economic necessity".
“Homebuyers and owners rely on the Land Registry to provide an impartial professional service and it must remain under public control, free from any profit motive and conflict of interest," he added.
“It is utterly disgraceful that the government waited until the end of the day before MPs break for Easter to publish its consultation, but is a sure sign ministers know the strength and breadth of opposition they will face.”
That view was echoed by shadow business minister Angela Eagle, with the Labour frontbencher saying a "short-term privatisation" could have "long-term consequences" for both homebuyers and Land Registry staff.
"The government are privatising the profits of the Land Registry – which made a surplus of £100 million in 2012/13 – whilst retaining the risk," she said.
“This announcement was slipped out late on the last day before recess in another desperate attempt to avoid scrutiny. Labour will fight this unnecessary, un-evidenced and unwanted privatisation.”
Launching the consultation, which runs until May 26, business secretary Sajid Javid said the Land Registry had "an important role to play in property ownership".
But he added: "By proposing a model where government retains critical functions, including ownership of the Register itself, we are delivering on our promise to ensure the sale of public assets benefits the wider economy and all working people in the longer-term."
BIS Land Registry consultation