Interview: Malcolm Dawson

As far as civil service cuts go, the Land Registry is a canary in the mine. A trading fund whose revenues depend on activity in the property market, it hit hard times long before the credit crunch morphed into the sovereign debt crisis and today’s swingeing public sector budget cuts. Four years on, having weathered punishing job cuts and dramatic reforms, the registry is emerging blinking from the darkness of the mineshaft – and its healthy pulse offers hope that there may be life after austerity. Battered, shrunken and with a haunted look in its eyes, this canary clearly has painful memories; but it has, at least, survived.

Things looked so different back in January 2008, when Malcolm Dawson joined the registry as Director of HR. The organisation makes its living by keeping a register of land ownership in the UK, charging people to access its data and record their purchases – and the overheated property market had created a boom in sales. The 2007-8 accounts produced “a net surplus of about £73m: it was our best year financially,” Dawson remembers. “People had been working overtime to cope with the intakes of work.”

Northern Rock’s September 2007 collapse raised a few eyebrows, he says, “though I don’t think anyone at that stage had any idea how things were going to develop. So at the first board meetings I came to there were some discussions about this and whether it would have an impact on our intakes and turnover – but we weren’t really too worried about it, to be honest.”

Then came Lehman Brothers, a year later; and as Dawson says, “the market disappeared: intakes and fees just died away. They have never recovered.” Four years on, the Land Registry’s workload stands at 60 per cent of its September 2008 level, “and the housing market is still relatively flat; there’s no real sign of any recovery.”

With its business in freefall – the 2008-9 accounts would show a disastrous £72m operating loss – the organisation “had too many people with no work to do, and we had to move very quickly,” Dawson recalls. “By December of 2008 we’d announced a voluntary severance scheme, and by May 2009 we’d reduced our staff by 1,500.” Tasked with implementing a wholesale organisational transformation programme, Dawson made plans to cut the organisation’s head count from about 8,000 to 4,500 by 2014-15. “But our plan was based on the perception that the housing market would start to recover,” he says. “It plainly hasn’t.”

Faced with ongoing losses, the registry hastened its redundancies and introduced major outsourcing and property rationalisation schemes – and, almost uniquely within the civil service, the organisation has now pretty much completed its change programme. Running costs have fallen from £400m to under £260m, the workforce has nearly halved, and the 2011-12 accounts show a very healthy £102m surplus. “We started the transformation programme in the latter part of 2009, got the decisions agreed in 2010, closed our offices last year, and we’ve now completed all that restructuring two years ahead of schedule,” says Dawson, who became Land Registry’s chief executive and chief land registrar in March 2011.

Taken out
In part, those savings were made by outsourcing the registry’s facilities management and file stores work: contracts that went to Carillion and TNT respectively. Neither project has been straightforward, Dawson admits: “Both contracts had teething troubles,” he says. “There have been problems, but we’ve overcome them.”

Such implementation challenges often lead to the two sides falling out, leading to cost over-runs and invoked penalty clauses, but Dawson says “we’ve tried really hard not to get into that. There have been some tough contract management discussions, but we’ve tried to avoid blame games.” This approach has paid off for both sides, he believes; both transitions are now complete, and he’s on good terms with the contractors.

Still, the file stores project in particular was a struggle. “It proved to be a much, much bigger undertaking than we or TNT had recognised,” says Dawson. “It’s the biggest files uplift ever; in Europe certainly, and possibly in the world. We moved 88 million files from 12 file stores into a single new repository in Coventry.” Having completed the transition, he explains, Land Registry will in future pay for its file storage according to how many files it examines – meaning that its costs will always be tied to fee income.

Meanwhile, the organisation was radically slimming down its property portfolio – cutting its office network from 25 to 14, and selling its flagship HQ in Lincoln’s Inn Fields. Dawson and his leadership team are now based in the more prosaic environs of Land Registry’s local Croydon office – a move that both helped fund the reforms, and sent an important message. “It was a good symbolic thing to do, because it demonstrated that this wasn’t about taking the axe to operations; that the pain would be felt everywhere,” he comments.

Moving out of central London cost the registry about 40 per cent of its head office staff. “The big challenge for us was that they did tend to be people at a senior level and with more experience, so we lost a lot of expertise that is difficult to replace,” Dawson acknowledges. “It’s left us with a degree of stretch in our senior management.” But it hasn’t left the organisation marginalised in Whitehall policymaking, he says – “It’s Croydon, not Siberia” – and has had the unexpected benefit of bringing operational policymakers closer to the delivery staff who “can tell them whether something’s a stupid idea or not.”

Starting with the customer
Along with the changes to Land Registry’s infrastructure, there have been major changes to its operating model; notably the shift from a regional structure, in which local offices dealt with all the inquiries concerning properties within their areas, to a customer-focused system that allocates each client to a particular team. This enables the registry to offer its customers – mainly businesses such as conveyancers and solicitors – a much more personal service, and saves them the hassle of dealing with up to 14 different regional offices.

At a time when many civil service organisations are trying to cut costs by standardising processes and pushing ever more enquiries through centralised call centres, the idea of giving every client an account manager and a set of named contacts goes against the flow; but Dawson says that this more personalised approach is saving money for the registry and clients alike. “It’s delivered a much better understanding of our customers, and we’ve been able to tailor our services to their needs,” he says: he cites the example of one bulk conveyancer which now receives a simple pile of printed forms each week, rather than 400 individually folded and stapled documents posted in separate envelopes. Stronger relationships with individual clients have also cut the number of errors by 20-30 per cent in a single year, he says, contributing to a rise in efficiency within customer teams of about 15 per cent.

Although standardisation is still very important to Land Registry’s efficiency, Dawson explains, he’s shifted the emphasis away from always maximising convenience and minimising workload for the register. Nowadays, he says, his system designers first ask: “What delivers the best outcome for our customers, in a way that both we and they can afford?” And he’s applying the same philosophy to the organisation’s online services – although here, it’s fair to say, the registry has had little option: faced with widespread opposition to its plans, Dawson has signalled a retreat.

Online on the frontline
For some years, Land Registry has been gently pushing its customers away from traditional contact points and towards online services. It’s had considerable success: 95 per cent of solicitors’ initial property searches, for example, are now electronic. But it’s one thing providing information online, and another arranging changes in the recording of ownership; and on this more sensitive ground, the registry has stumbled in its attempts to tackle customers’ fears of online fraud.

First, Land Registry launched an ‘e-signature’ system so convoluted that it was almost universally spurned by customers. “We were ahead of the leading edge of technology in trying to come up with a really, really secure e-signature solution that would enable people to sign contracts electronically,” Dawson confesses. “And it is fantastically secure: much more secure than a handwritten signature. Unfortunately it’s very un-user-friendly, and just too complicated; it’s been used about 15 times.”

Meanwhile, the registry was pursuing plans to allow ‘e-transfers’ in the registration of land ownership; and here, Dawson’s team encountered another obstacle. Currently, the Land Registry verifies documents itself before approving transfers – but it suffers at the hands of fraudsters, and paid out more than £6m to compensate 52 crime victims during 2011-12. Under its proposed e-transfers system, conveyancers would have been responsible for verifying the documents and vouching for them to Land Registry – leading to concerns that “we were transferring risk to them, for which they were getting no additional reward,” Dawson explains. “The Law Society and some of our other key customers and stakeholders were just not comfortable with that, so I took the view that it wasn’t something that we should try and pursue further at this stage.”

Asked what he’s learned from the experience, Dawson gives three key lessons. First, he says, “we’re going to take it in smaller steps: that was too big a leap for the industry.” It is, he adds, “too easy to get drawn into big, grand projects”; in future, each scheme will be broken down into “the smallest chunks possible” and implemented piece by piece.

Second, he’ll be rethinking processes from scratch, rather than simply trying to create an online version of an existing system. After all, he explains, his client base is broadening – these days utilities firms, data companies and property developers, for example, provide a growing chunk of his trade – and his current systems are built around a set of assumptions that may be out of date. “There’s no point trying to squish customers into an existing set of channels and processes that aren’t designed to meet their needs, so we’re trying to rethink how we do it,” he says.

Third – and probably most crucially – he will be making sure that future online systems offer clear benefits to the users, while asking for the minimum possible amount of adjustment on their part. Under Land Registry’s new ‘e-lodgement’ system, he explains, customers will be able to submit documents electronically, but “it’s not trying to get them to change the way they do their business, and I think that’s the key: coming up with services that meet their needs.”

Unlike e-transfers, says Dawson, developing e-lodgement has involved a “huge amount of time spent working with customers: testing it with them, building up very simple prototypes, seeing what works for them at every single step.” His aim has been to produce something that makes service users’ lives easier, while minimising their need to invest in training, software or business change. “It’s got to deliver benefits for them, otherwise they’re not going to use it,” he argues.

 

On money and morale

Having implemented all this change, Land Registry is now running a decent surplus, implementing a 10 per cent cut in customer fees, and increasing its dividend to the Treasury: the latter, Dawson explains, involves limiting the fees reduction rather than implementing more redundancies. So the organisation’s finances are in pretty good shape; its morale, however, is not.In 2010, Land Registry’s 41 per cent staff engagement score in the Civil Service People Survey put it third from bottom in the rankings. “You couldn’t have picked a better time to do an engagement survey,” says Dawson wryly. “We’d just announced that we were going to close half the organisation.”

In 2011 the score improved slightly, to 45 per cent – but Dawson doesn’t pretend that this is a happy organisation. When the survey was conducted, he recalls, “nearly every week there was a collection coming round for someone who was leaving through voluntary severance or the outsourcing programme.” Meanwhile, Land Registry was under scrutiny as part of the coalition’s review of arm’s length bodies: ideas about privatising the agency were put on hold when it became part of the new Public Data Group and came under the control of the business department, Dawson explains, but some uncertainty remains. “It’s sort of gone away but not really: it’s always in the background,” he says. “And then there’s all the stuff going on in the wider civil service: people haven’t had a pay rise in two years; they see their pension contributions going up; they see all the other changes that might be coming along. You can’t insulate yourself from what’s happening in the rest of the civil service. We’re trying to make some very difficult decisions and focus on the future, but it’s a very difficult environment to be doing that.”

A numbers game
As Dawson tries to focus on the future, one of his main priorities is the Public Data Group (PDG): the new alliance created with Ordnance Survey, the Met Office and Companies House, with the aim of stimulating business growth by releasing more public data for re-use. Some of this data will be handed out free, he says – Land Registry is already giving away ‘price paid information’ on sold land values, which it used to sell for a total of about £600,000 per year – but in many cases the group’s members will have to find ways of generating revenue in order to fund their data releases. “In the end we’ve still got to be sustainable, and that’s an issue for all of use,” says Dawson. “You can’t just give away data for free and hope to maintain a sustainable organisation” (see news).

Ultimately, Land Registry’s membership of the PDG is likely to have wider effects than simply catalysing the release of more data: given a new set of partner organisations and a parent department desperate to find tools to get the economy moving, the registry is becoming a more integrated part of the wider civil service. “What we’re aiming to do over the next five years is be recognised as a world leader in digitising land registration services, and in managing and using data and enabling its reuse,” says Dawson. “And that represents a really big change. For 150 years, our job has been to do land registration, and now we’re much more focused on doing that in a way that supports economic growth, and enables better use of the data we hold; and on working much more closely with other departments to do things like tackle tax avoidance.” In future, he adds, Land Registry will be “more connected, less insular; much more about how we can help other departments achieve their policy objectives.”

To get far down that road, however, Dawson will first have to heave Land Registry’s battered staff out of their depression and get them enthused about the future; and as he acknowledges, that’s not an easy task. “This year is our 150th anniversary, and until the transformation programme there had never been a redundancy programme in Land Registry,” he says. “It’s a very, very paternalistic organisation that had always prided itself on doing its best for its employees, and that contract was really broken by this unprecedented change: closing offices, making people redundant.”

This year, he believes, the staff engagement score will improve by a few more points. “The discussions I have with people are now much more positive than they were 18 months ago; people feel much more in control; they feel better about the future,” he says. But he’s not under any illusions: “We’ve seen improvements in the last couple of months, but [engagement scores] are still nowhere near where I’d want them to be. I’m not expecting massive strides, because there’s still a lot of uncertainty around.”

Bruised, traumatised and exhausted, the Land Registry canary has dragged itself through many dark tunnels to get to this point. Now it stands at the mineshaft’s mouth, surveying with distrusting eyes an apparently safe home and a sufficient food supply. A vet, checking its vital signs, would give it a good prognosis – its toughest times are probably now behind it – but this canary’s experiences in the tunnels will not fade from memory quickly. If the state of the Land Registry really does foretell that of the civil service a couple of years from now, the message is a mixed one: the canary has survived, but it will be some time before it once again bursts happily into song.