Infrastructure Bill [HL]

Written evidence submitted by The Local Land Charges Institute (LLCI) (IB 15)

The Infrastructure Bill – Clause 29 and Schedule 4 - H. M. Land Registry and Local Land Charges

Summary

1.1 The Local Land Charges Institute (LLCI) is the representative body for Local Land Charges officers in England and Wales. Over 300 local authorities across England and Wales are members of the Institute. The Institute opposes the proposal that Land Registry should take over responsibility for the local authority Local Land Charges service.

Detail

2.1 Clause 29 and Schedule 4 of the Infrastructure Bill refer to the proposal by Land Registry to take over part of the local authority Local Land Charges service. This service is part of the property conveyancing process and provides information of importance to potential purchasers of property by way of local authority searches. Land Registry published its proposal in January 2014 and undertook a consultation on its proposal on behalf of the Department for Business, Innovation and Skills.

2.2 Local authority searches comprise a search of the Local Land Charges Register (Form LLC1) and answers to accompanying Enquiries of Local Authorities (Form CON29). Entries on the Register of Local Land Charges include conservation areas, tree preservation orders, planning and highways agreements, conditional planning permissions and some debts owing to the local authority. Matters covered on the CON29 form include the full planning history of a property, whether an adjacent highway is publicly maintained, proposed nearby road and rail schemes (e.g. High Speed 2), proposed controlled parking zones and pending compulsory purchase orders.

2.3 We believe that the proposed takeover of part of the Local Land Charges service by Land Registry would lead to a more fragmented, more costly and less reliable service than that which already exists and would result in a poorer service for the property-buying public and the businesses that support them. Land Registry proposes spending between £40 million and £60 million (Land Registry figures October 2014) on a scheme for which there is no demand and no guarantee of success and with no benefit to consumers, and which will fail to meet its stated policy objectives. We urge the Committee to scrap this proposal.

Our objections to this proposal may be summarised thus:

3.1 Land Registry will only provide a partial service and will fail to meet its stated policy objectives. Local authorities currently provide a full local search service. Land Registry proposes providing only a partial service, leaving the more complex half of the service with local authorities. Land Registry plans to replace the existing unified service with a disjointed service that entails an additional search procedure and will not improve the conveyancing process. Land Registry will by its own admission fail to meet its stated policy objectives of a standard fee, standard format and faster processing.

3.2 The origin of the proposal is unclear and there has been no independent assessment of its merits. Land Registry says the proposal came about at the request of its stakeholders. They dispute this. Land Registry undertook the consultation on its own proposal then evaluated the responses on behalf of government. It was judge and jury on its own proposal. Land Registry recognises that its own stakeholders are disappointed with its proposal.

3.3 There is no clear or consistent rationale behind the proposal, nor demand for it. Land Registry previously made much of the UK’s ranking in the World Bank Ease of Doing Business Report. This appeared to be one of the main drivers behind the proposal. Mention of it has now all but disappeared. Conveyancers do not identify searches as a significant cause of delays. The overwhelming majority of respondents to Land Registry’s consultation are against the proposal. When surveyed for Land Registry, 82% of conveyancers found Land Registry’s proposal unappealing or very unappealing.

3.4 The proposal lacks a credible implementation plan and timetable. Land Registry has repeatedly given self-contradictory starting dates for its proposal and failed to publish a detailed and credible project plan and timetable for it.

3.5 The proposal has not been properly costed and assessed, either in its impact on businesses or on local authorities. The impacts and costings provided in the Impact Assessment are partial and unrealistic. A comprehensive independent assessment of all local authority, business and other costs associated with the proposal should be undertaken and Land Registry should undertake fully to meet those costs.

3.6 The proposal is out of step with accepted methods of dealing with poor performance where that does exist. There is provision for outside intervention in the provision of local government services where these are seen as performing poorly. This proposal, however, seeks to take over an entire service which is not even recognised as failing.

Expanding on our objections (references to the Impact Assessment below are to Land Registry’s Impact Assessment (IA) of its proposal dated 14th October 2014):

4.1 Land Registry will only provide a partial service and will fail to meet its stated policy objectives.

4.2 Local authority searches include a search of the Local Land Charges Register (Form LLC1) and answers to accompanying Enquiries of Local Authorities (Form CON29). Local authorities currently provide the full LLC1 and CON29 service.

4.3 Land Registry only proposes providing a partial service (the LLC1), leaving the CON29 service with local authorities and splitting what all parties agree are two intrinsically linked and interdependent datasets. As Land Registry admits, "instead of ordering both searches from one source… …customers would have to place two separate orders… …we take the point that it is not so convenient to order searches from two separate suppliers." (Impact Assessment [IA] 9.3.1)

4.4 Land Registry’s Impact Assessment (Summary: Intervention and Options - front page) asks "What are the policy objectives and the intended effects?" Paragraphs 4.1 to 4.5 expand on these objectives, admitting that three of the five will not be met by this proposal: transparent fees without a "postcode lottery"; standardised and improved processing times; and standardised format of results.

4.5 As Land Registry concedes:

"This policy will not introduce a standardised fee for local searches (LLC and CON29) generally." (IA 1.1)

"…since CON29 searches are not included, the preferred option does not meet all the objectives at this stage…" (IA 5.4)

"…we are not claiming any significant time savings from our preferred option". (IA 9.3.2)

"The risk of a slower [overall] service is a possibility." (IA 11.3.2)

4.6 These objectives will not be met because Land Registry only proposes providing a partial service, leaving the more complex and costly part of the service to local authorities to provide. Land Registry says that "By digitising Local Land Charges records, we have been able to complete searches in minutes" (IA 2.3). This is not comparing like with like. Local authorities could also complete searches in minutes if they were only required to provide the partial service Land Registry proposes.

4.7 Customers want both parts of the service together. Having looked at the CON29, Land Registry appears to have decided it is incapable of providing the full service. It has given no indication as to when it might be in a position to do so. We believe Land Registry should not take over either part of the service. It should certainly not proceed to provide one part without the other.

5.1 The origin of the proposal is unclear and there has been no independent assessment of its merits.

5.2 Land Registry states that it investigated the possible provision of Local Land Charges services as a result of concerns raised by its Land Registry Advisory Council, formerly the Business User Group, in 2010. Stakeholders, however, dispute this: "The Society of Licensed Conveyancers’ representative… …has no recollection of that group being the ‘driving force’ behind the Land Registry looking at the centralisation of either the LLC1 and/or the CON29". (Society of Licensed Conveyancers response to consultation)

5.3 On 25th January 2011 Land Registry’s Commercial and Customer Director, Annette Davies-Govett, wrote to Lord McNally, Minister of State at the Ministry of Justice, stating that Land Registry had identified Local Land Charges as a "potential income stream" and it should be explored "regardless of the outcome of the Feasibility Study". This appears to be the strategy Land Registry has adopted.

5.4 Having allegedly been well received at first by its Advisory Council, Land Registry now admits that "member organisations have been disappointed with the current proposals, because many wanted CON29s to be covered too." (Impact Assessment footnote 9)

6.1 There is no clear or consistent rationale behind the proposal, nor demand for it.

6.2 In its March 2014 Impact Assessment (3.1.1) Land Registry quoted the World Bank Report on Ease of Doing Business 2014 as identifying the average length of time required to register a property in the UK as 21.5 days, requiring six different procedures to be undertaken. The current (October 2014) Impact Assessment relegates the significance of this report to a footnote (footnote 13). Land Registry either considers the World Bank Report no longer relevant, or now accepts that its proposal will not improve the UK’s ranking in the report.

6.3 Conveyancers do not identify searches as a particular cause of delays in the conveyancing process:

"67% of local authorities provide a full service within 5 days and 95% within 10 days." (IA footnote 15)

"…it is extremely rare that any transaction is held up as a result of waiting for searches to be returned." (Society of Licensed Conveyancers response to consultation)

"Searches do not feature among the top 10 causes of delays in conveyancing." (MoveWithUs cited by COPSO – November 2014)

6.4 "An overwhelming majority of respondents disagreed or strongly disagreed with the stated perception that the current services would benefit from reform." (Government response to consultation June 2014)

A 2013 survey of conveyancers showed that 67% of respondents would prefer the local search service to remain with local authorities, with 24% undecided and only 9% in favour of Land Registry taking over the service. 84% of respondents were satisfied or very satisfied with the local authority search service, with only 4% dissatisfied and 1% very dissatisfied. (LLCI research – September 2013)

When consulted only 23% of Land Registry customers agreed that the current search system needs reform (122 for and 410 against). Narrowing its survey just to conveyancers fewer than 50% agreed (20 out of 43). (IA footnote 10)

6.5 Land Registry says "When presented with a proposal for Land Registry to provide [the full service]… …58% of customers found the proposition ‘appealing’ or ‘very appealing’. (IA 7.1) This, however, is not the service Land Registry intends providing.

6.6 When asked whether Land Registry should provide its proposed partial service, 82% of customers found the proposal ‘unappealing’ or ‘very unappealing’. Only 5% of customers found it ‘appealing’ or ‘very appealing’. "Customers would expect Land Registry to provide the [full] service that is currently provided by local authorities." (Synovate for Land Registry – August 2011- Page 18)

6.7 Land Registry refers to "Conveyancing Process: Where can delays occur? – SDB Solicitors – no date" (IA 2.2.1), although it misattributes the document and indeed the document does not support Land Registry’s case. It is a Law Society document from November 2003. It cites delays caused by banks, solicitors, leaseholders, Land Registry and lenders as well as buyers and sellers.

6.8 Land Registry’s proposal does not address any of these concerns. In this document’s seven pages just one paragraph refers to speed of searches. As all sides acknowledge, there has been a tremendous improvement in local authority performance since 2003. Indeed even in 2003 the document states: "The fact that some authorities are able to deal with a search quickly shows that there is nothing much wrong with the procedure itself".

6.9 An efficient, working online electronic search system is already in place: NLIS, the government-backed National Land Information Service.

7.1 The proposal lacks a credible implementation plan, timetable and impact assessment.

7.2 Land Registry has given multiple and contradictory timescales for this project. Its March 2014 Impact Assessment gave a clearly unrealistic implementation date of April 2015. Its press release of 16th June 2014 said "preparatory work will start on 1st April 2015 for phased implementation later that year". In the summer of 2014 Land Registry told local authorities that there would be a progressive phased migration of local authorities "starting in July 2016… …which should take 2-3 years". In October and November 2014 Land Registry has been telling local authorities that migration will start in 2017 and be complete by 2020 or possibly even 2022. (Land Registry Project Timeline circulated December 2014)

7.3 The October 2014 Impact Assessment is again unclear, suggesting unrealistic start dates of either 2015/16 (10.1) or 2016/17 (9.6). On page 3 of the Impact Assessment Land Registry states as a key assumption that fees in England will be £12 from 2016/17 yet it has told local authorities that the project will not be complete until 2020 at the earliest and possibly 2022. Land Registry should publish a comprehensive and credible implementation plan, timetable and impact assessment for the whole project and submit them to independent scrutiny.

8.1 The proposal has not been properly costed and assessed, either in its impact on businesses or on local authorities.

8.2 Land Registry admits that it has not properly assessed the impact of its proposals on businesses:

"207 responses to the 2014 consultation identified costs associated with splitting the CON29 and LLC1 service as a concern." (IA 7.3)

"The risk of a slower [CON29] service is a possibility… …the burden that this may impose on CON29 data users has not been quantified in this impact assessment." (IA 11.3.2)

8.3 Land Registry also gives unrealistic estimates for the costs to local authorities, both transitional and ongoing. For example, it underestimates the number of officers within local authorities who contribute to the maintenance of the Local Land Charges Register and the time that would be necessary to train them to update Land Registry’s new databases.

8.4 Land Registry says it is "paying all start up costs and therefore there are no costs for local authorities". (IA 9.2.1) But Land Registry has not identified all local authority costs, including the staff time, IT and other resources necessary to liaise with Land Registry, identify Land Registry’s needs, and assist in data preparation, cleansing and migration and system testing. It does not propose compensating local authorities which have to sever agreements with current suppliers of the tried, tested and fully functioning IT systems which it proposes scrapping in favour of its as yet undesigned, unbuilt, untried and untested system.

8.5 Land Registry has not placed a value on the local authority data itself. Land Registry says it wants local authorities to provide it with the relevant data free of charge both initially and on an ongoing basis; data which Land Registry will then sell on, keeping the revenue for itself.

8.6 Land Registry must undertake to pay all these costs, and others which an independent assessment may identify. Land Registry says legislation prevents it passing part of its fees back to local authorities. (IA 9.2.2) If the proposal proceeds this legislation must be changed, not an insurmountable obstacle given the other, far more complex, legislative changes that the proposal entails.

9.1 The proposal is out of step with accepted methods of dealing with poor performance where that does exist.

9.2 It is customary for government to raise concerns about local government services with the Local Government Association, and for the LGA to then approach the relevant local authorities. That has not happened on this occasion. There is provision for outside intervention where services are identified as failing e.g. in the fields of Social Services and Town Planning.

9.3 Local Land Charges is not a failing service. As stated above, 67% of local authorities provide a full service within 5 days and 95% within 10 days. When asked, government and Land Registry failed to cite any precedent for a similar takeover of any other service. (LLCI letters to Minister at BIS and to Land Registry Chief Executive)

9.4 The Parliamentary Under-Secretary of State for Communities and Local Government said in the Second Reading of the Bill in the Commons on 8th December that Local Land Charges currently comprises "348 card indexes around the country" which need to be digitised. This is not a fair or accurate reflection of the overwhelmingly computerised service that local authorities provide today.

9.5 We recognise that not all local authorities always provide a satisfactory service. Speaking at Committee Stage on 15th July 2014 the Minister in the Lords identified several authorities which were providing a poor service. However, making resources available to assist those local authorities that are struggling to provide a good service would be a far more cost-effective solution than Land Registry’s proposals.

Conclusion

10.1 The Local Land Charges Institute and local authorities across the country are committed to the provision of a speedy, accurate and customer-focussed Local Land Charges service.

10.2 Land Registry’s proposal to take over the local authority Local Land Charges service is not supported by the industry at large. It is ill thought through, has not been properly costed or assessed and is not supported by the research that has been carried out. Simply transferring responsibility for the Local Land Charges Register to the Land Registry will not improve the conveyancing process. Indeed, it is more likely to have the opposite effect through increased turnaround times and a disjointed service. The costs to property buyers, to the businesses that support them and to local government through the transfer of part of the service, impact on internal processes, loss of staff and expertise, and termination/renegotiation of IT contracts have not been properly assessed. We believe that this proposal should not proceed.

10.3 The Local Land Charges Institute would welcome the opportunity to appear in front of the Infrastructure Bill Committee.

December 2014