The Politics of Land Law: Privatisation of HM Land Registry

Dr. Thomas Dunk
Lecturer in Law & Politics at the University of Hertfordshire

It is not often that politics and land law collide to make national news,[1] but this collision of two of my interests is both unusual but perhaps not unsurprising. The move towards the privatisation of the HM Land Registry was again highlighted within the Queen’s Speech earlier this month[2] with the consultation due to close on 26th May 2016.

The consultation document “Consultation on moving Land Registry operations to the private sector[3]  highlights this desire towards privatisation as “Where there is no compelling case for keeping an asset in public ownership and there are clear advantages to considering alternatives it is right to explore a change.”[4] This clearly ideological statement coupled with the use of the money to pay down public debt is a clear example of the current government’s move towards a small state and reduced deficit. It could be seen as a classic case of two birds, one stone. HM Land Registry is a functioning public institution that while perhaps isn’t the family silver, is the family brass and could be considered as worth shifting to help clear the debt. Certainly, its privatisation will not raise as much interest as that of the Royal Mail or selling the UK stake in Eurostar since HM Land Registry has a much lower profile.

So far so bad, however, for those that feel that the public ownership of the register of land ownership should remain safely in the public hands instead of sold to the highest bidder. However, the consultation speaks of private investment in “Digital Transformation”[5] – is this finally the way forward for e-conveyancing that has been promised since the introduction of the Land Registration Act 2002, part 8? Conceivably than land lawyers across the country should be optimistic for the future with this part of the act finally being implemented using private money to ensure the system of land registration is suitable for the next hundred years, yet my political heart is screaming to stop the privatisation of another institution.

However, the consultation document talks of the indemnity principle governed by the Schedule 8, LRA 2002,[6] that should a mistake or error be made by Land Registry than the government will pay for any damages caused. Under the consultation this principle of the LRA will remain in place, backed as before by the government, it will be interesting to see how privatisation will impact on the number of mistakes and errors being made by this service. The consultation document talks of an “appropriate share of financial risk”[7] associated with the indemnity being transferred to the new owners, however what will that share be? What will the risk be to that company to make errors and override the need to speed things up to make greater profits? Will a private company take bigger risks knowing that they will not carry the full burden for errors, what is that risks to reward ratio? This is a key question which needs more investigation. Further, if that risk to reward ratio is wrong, are the government placing the property register and mirror principle in harm’s way? As such, are we about to see not just a crack in the mirror but the mirror completely shattering?

The document sets out different models and options, with a clear rejection of the status quo on ideological grounds rather than out of any compelling practical desire:

“keeping the Land Registry as a whole in government fails to meet Government objectives of reclassification from the public sector and would not deliver the desired culture change and incentivisation to drive transformation.”[8]

That in and of itself isn’t an issue, as each government is driven by its own ideology. What is more concerning is that the models drawn up in the consultation are not developed enough to really get a true idea of what they would look like in anything more than broad brush strokes.

The consultation is hopefully a starting place; with a legal frame of mind it raises positives and negatives and even leaves some unanswered questions. With a politics mindset, this is a classic example of small state government privatising a government service. Perhaps this privatisation is different to others. For example, it is easy to see if Royal Mail is still delivering letters on time, but errors in the land register will take longer to surface, plausibly years down the line by which time politics and the government would have moved on.

In conclusion, privatisation of Land Registry shouldn’t be outright rejected, but serious thought needs to go into the model of operation, the potential for conflict with the underlying principles of the LRA and the future of land ownership shouldn’t be underestimated in a rush for quick money. My final conflicted thoughts on this raises one unanswered question is the money generated in the privatisation worth the trouble of undertaking such action, rather than an ideology policy being pursued at all costs.

 

All views, opinions, errors, omission and mistakes are solely the responsibility of the author and do not necessarily reflect that of the University of Hertfordshire.

 

[1] http://www.theguardian.com/commentisfree/2016/may/24/austerity-cuts-privatising-george-osborne-britain-assets accessed 24/05/16

[2] http://www.bbc.co.uk/news/uk-politics-36320412 accessed 24/05/16

[3] https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/510987/BIS-16-165-consultation-on-moving-land-registry-operations-to-the-private-sector.pdf accessed 24/05/16

[4] Consultation on moving Land Registry operations to the private sector, paragraph 27

[5] ibid paragraph 30-31

[6] ibid paragraph 48-51

[7] ibid paragraph 51

[8] ibid paragraph 81

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