Fire sale

May 24, 2016

Yes, I know I said I’d be away for a fortnight.  I am “away”, insofar as I’m away from home on a writing retreat, but my plans for a digital detox have had to be put on hold.  Because this one is important: look.  They’re after the Land Registry again.

“Have the Government failed to notice that the Land Registry has a customer service satisfaction rating of 98% – a rating that many large-scale, international and well-known organisations would love to have – that it operates at no cost to the taxpayer and that it made £98.8 million last year for the Treasury?” (Sian James, Westminster Hall debate)

When the former coalition government consulted on separating out some of the functions of the Land Registry into a company that could then be sold off, they were flooded with responses.  Responses from individuals hit three figures (trust me, I’m usually one of a very small number of individual responders, and the government has a tendency to consider individuals who respond to consultations as cranks anyway – see the response document here at para 29, which appears to dismiss the responses from the “number of respondents (who) were strongly opposed to the underlying proposals”.  Well, duh!)

However.  “91% of respondents did not agree that creating a more delivery-focused organisation at arms length from the Government would enable Land Registry to carry out its operations more efficiently  and effectively” (same response document, para 30)

So why the hell are we here again, with this consultation which closes on Thursday night (26 May 2016 11.45pm) quite explicitly seeking views on Land Registry: moving operations to the private sector

It’s blunt.

This consultation sets out options to move Land Registry into the private sector.  A sale of Land Registry is expected to deliver a capital receipt for Government.  This can be invested elsewhere for the benefit of the tax payer.  In addition, it is expected that a transaction could support Land Registry to be run efficiently and effectively and support the UK property market

A capital receipt.  If you have savings, perhaps an ISA, it’s like closing one account and opening another.  You sell the shares that are sitting in your ISA and get a sum of money you can invest somewhere else.  Wouldn’t the first question you would ask, though, be whether you could get a better rate of return somewhere else???  Do we believe the government – this government – plans to “invest” any money it gets from flogging off our assets into anything except day to day spending?

Also, it is “expected” that it “could” make it run efficiently and effectively?  When the evidence is that it is already running both efficiently AND effectively now, as a public sector organisation?  Why move from certainty to probability?

OK, let’s look at it.

Q1: Do you agree that ownership of the Registers should remain in Government?

Yes (“The Registers” are the result of the work of the Land Registry and the accumulated knowledge and data it has acquired over its history.  Of course that’s a key government task, to know who owns the land.  But the knowing is only achieved by the acquisition of knowledge: what value the registers if you then privatise the processes by which they are updated?)

Q2: What steps should government take and what safeguards should it put in place to ensure continued and improved access to high-quality and reliable Land Registry data?

Paragraph 33 of the condoc: “As the organisation becomes more digital, so the potential value of the data increases.”  It is foolish to sell off an appreciating asset: the best safeguard of its continued quality would be to retain it in public ownership.

Q3: How could government use this opportunity to improve the quality and accessibility of data produced by Land Registry for all sectors of the economy?

The government thinks we gave the wrong answer the first time they consulted because we didn’t understand the question.  The Land Registry didn’t make a “profit”, it accidentally produced a “surplus” because it did more searches than it had forecast and the surplus can’t be a profit because it’s not allowed to make a profit: “it is not currently allowed to generate a profit from core statutory functions, because fees must not be used to generate revenue for the Government to spend elsewhere – that is the purpose of taxation.”  Here’s an opportunity then: let it use its accidental surplus to improve its services and produce better quality and more accessible data.  Just don’t call it a profit…

Q4: On what basis should government manage the relationship with a privately owned Land Registry to ensure Land Registry meets, as far as is reasonable, the data quality and availability requirements of all stakeholders?

Because this works so well in other, arms length organisations, doesn’t it?  Outsourcing the buildings governments work in and their day to day management to opaque owners in tax havens really helps get the light bulbs changed and the bog rolls restocked.  Basically the story goes like this: send something outside of the public sector.  The expert staff go with it and get a stonking pay rise.  The remaining department tries to manage the relationship.  The agile private sector organisation runs rings round them, because they took all the knowledge and expertise – that the taxpayer had paid for and which is invested in the staff – with them.  The simple answer is: don’t do it!

Q5: do you agree that the suggested safeguards should be included in any model?

Q6: are there any other safeguards that you think should be included?

First, don’t sell it.  Second, if you have to sell it, supervise it.  Third, if you’re going to supervise it, make sure the supervision isn’t done only by the usual suspects: have some sort of supervisory board that includes representatives of citizen organisations as well as big businesses.  You could, for example, have it supervised by a Parliament of representatives elected by ordinary citizens… if you didn’t sell it in the first place.

Q7: Do you agree with the preferred option?

Q8: What are your reasons for your answer to question 7?

No: the preferred option is to flog off everything about the Land Registry except the actual Registers.  I much prefer the “status quo” option dismissed at para 89 because it does not meet the government’s objectives.  However the government objectives of “reclassification from the public sector” and its “clear requirement of maximising capital receipt” are not supported by evidence.

Q9: Do you think an alternative model would be better and why?

Yes: the “BBC model”.  Government should set the Land Registry free of the requirement to charge only what covers its costs and instead allow it to raise its charges by a capped formula (inflation +x%, as is done in the privatised railways)  It would remain, like the BBC, a non-profit organisation owned by the nation and run for the benefit of its citizens.  However its day to day running would be a matter for its own Board of Management and it could achieve “reclassification from the public sector”.  Maximising capital receipts would not be met, but instead it would produce an income stream.  Like refraining from selling the flat you inherited from your granny, but instead letting an agent manage it and enjoying the profits.

Q10: Are there other key costs and benefits that you think we have missed?

You were being disingenuous about the capital receipts thing at the beginning, weren’t you?  “Finally, it would raise revenue for Government that can be used to reduce the unsustainable level of public debt or be used to fund other public spending which is a key objective”.  (para 93)

Please think about going here and contributing a response to the “consultation” if you can: if all else fails and you don’t have time, simply email lr.consultation@ukgi.gsi.gov.uk with your thoughts.  Before 11.45 pm tomorrow!

One comment

  1. yours was more erudite than mine

    I just felt that we had lost all the limbs of our democracy and the tories were reduced to selling the very organs that breath life into not only the day to day life but create the very outline of what a fair well policed economy is

    I wonder just what these Etonians think a 1st world country actually is and how they define it

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