Government ministers have been criticised by the Labour party for releasing privatisation plans for the Land Registry just before Easter. Under the controversial plans, a private organisation would control the Registry's main operations. The body registers the ownership of land and property in England and Wales, and therefore plays an important role in the property market.
However, the government would retain ownership of the Land Register itself. It would also continue to offer key consumer safeguards, including a state-backed guarantee to reimburse losses incurred as a result of an error in the register. In a statement Labour's shadow business secretary Angela Eagle said: "The Government are privatising the profits of the Land Registry whilst retaining the risk. This announcement was slipped out late on the last day before recess in another desperate attempt to avoid scrutiny." Eagle went on to say that the move could reduce confidence in Registry data, erode the service it provides to homebuyers and impair conditions for staff.
But what is the current quality of the Registry's services? The Parliamentary and Health Service Ombudsman and the Independent Complaints Reviewer are the two bodies dealing with official complaints about the Registry. Between them they received 27 complaints about the Registry in 2014/15. This is patently a very low level of official complaints for an organisation of the Registry's size. Normally, private sector organisations have far higher levels of complaint.
Meanwhile it has come as no surprise that Public and Commercial Services union general secretary Mark Serwotka attacked the timing of the proposals as "utterly disgraceful". Serwotka is mindful of risks of large scale redundancies among his members. The Register has around 4,400 staff based at its main office in Croydon and 13 other offices around the country. The 150-year-old Register generated profits of £100m in the financial year 2012/13. Estimates have put its value at £1.2bn. The return on capital this implies, of more than 8%, is attractive and would clearly be of interest to potential buyers, especially given that the government will take on much of the business risk. It also appears likely that any purchaser would take steps to cut staffing and sell off surplus premises, boosting returns further.
Business Secretary Sajid Javid stated: "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." He added that the Land Registry could have more freedom in the private sector "to evolve into a high-performing, innovative business, delivering for customers and the wider market in a 21st century digital economy".
The government said the sale would reduce public debt and/or enable investment elsewhere. A consultation process on the plans ends on 26 May. The consultation comes after the previous coalition government considered a privatisation of the agency two years ago. At that point a campaign was organised to agitate for continued public ownership. Chancellor George Osborne announced in November that the government would consult on starting the privatisation in 2017. In the meantime Sky News revealed earlier in March that buyout consultancy Advent International – which has stakes in furniture retailer DFS and payments firm Worldpay – was planning a takeover of the Registry.