OGN submission: Consultation on moving Land Registry operations to the private sector
This response was submitted on 26th May 2016 by the UK Open Government Network to the government’s consultation on moving Land Registry operations to the private sector
The UK Open Government Civil Society Network (OGN) is a coalition of active citizens and civil society organisations committed to making government work better for people through increased transparency, participation and accountability.
The OGN and its members are concerned that the proposals laid out in the consultation document ‘Land Registry: moving operations to the private sector’ risk reversing the UK Government’s laudable progress towards increased transparency and accountability in a number of important respects.
The government recently launched its 2016-18 Open Government National Action Plan, in partnership with the OGN, which sets out a series of 13 commitments to increase transparency, civic participation and accountability in government and wider society. Specifically, we are concerned that the government’s important commitments to create a national data infrastructure by identifying and publishing core data assets and to increase the transparency of land and property ownership in the UK by extending the public register of beneficial ownership to foreign companies purchasing property are at risk of being undermined if the government proceeds with its prefered option for the Land Registry’s core functions to be privatised.
The economic value of open data
Over the past five years the Land Registry has made some of the data it collects and maintains accessible and/or open. This has been an important move with significant public benefits. For instance, the Open Data Institute has shown how making price-paid data publicly available has sparked a rise in property technology start-ups and driven innovation and improvement in the property industry.
There is a growing body of evidence that shows the economic benefits of open data – as opposed to data that is charged for, or has restrictions on its use and reuse. Recent research conducted by Lateral Economics for the Open Data Institute found that public sector open data will provide 0.5% of GDP more economic value every year than data that users have to pay for. The research shows that open data benefits the economy by allowing the development of new products and services. Transport for London, an early adopter of open data, began releasing datasets in 2009 and have clearly demonstrated the economic benefits of this policy; a 2013 study by Deloitte estimated that releasing the data had helped deliver somewhere between £15 million and £58 million in monetised time savings to London’s transport users in 2012.
We are concerned that if the Land Registry is privatised, it would be incentivised to impose financial and other barriers to accessing data, rather than progressing with the open data agenda. The Competition and Markets Authority has warned that privatisation would give the new owner a monopoly on commercially valuable data with no incentive to improve access to it. We support proposals that would safeguard data that has already been made open, but this protection does not extend to those datasets that are currently restricted or any new datasets that might be created in the future. At a time when government is increasingly moving towards open data, access to Land Registry data could remain frozen at current levels.
Evidence indicates that any restriction to the current or future access to Land Registry data, as the result of privatisation or otherwise, would have a negative impact on economic growth.
The public value of land ownership transparency
The Prime Minister has recognised that greater transparency of property ownership in the UK is crucial to tackling the global scourge of corruption, and has committed to extending the public register of beneficial ownership to foreign companies purchasing UK property. This is a welcome move; in London 36,342 properties totalling 2.25 sq miles are held by offshore companies registered in tax havens. Companies registered in tax havens are often used by corrupt individuals to conceal assets; research by Transparency International has shown that 75% of properties whose owners are under investigation for corruption made use of offshore corporate secrecy to hide their identities.
The scale of foreign-company owned properties in the UK was revealed through an investigation by Private Eye using data obtained through the Freedom of Information (FOI) Act. In total the Land Registry released details of around 100,000 land titles, revealing for the first time the extent to which companies registered in offshore tax havens own land and property in the UK and allowing investigative journalists to expose how the UK property industry is used by money launderers and tax evaders. It has since emerged that the data was released by the Land Registry “in error”, on the basis that each title can be purchased from the Land Registry, and is therefore deemed to be reasonably accessible to the public and exempt under the FOI Act. However, investigations such as that carried out by Private Eye rely on access to bulk data, and are infeasible if any level of charging or restrictions are imposed on access. As Private Eye have stated themselves:
‘While the “erroneous” release has itself proved valuable, there are clearly tens of thousands of properties acquired by offshore companies before 2005 and after July last year. Indeed, the information will prove most useful when up-to-date acquisitions are covered. Yet requests to obtain this have been refused under the FoI exemption for information “reasonably accessible by other means”.
Since the “other means” would involve paying £11 for title numbers belonging to each of an additional 15,000 offshore companies, followed by £3 for the register entry for each of tens of thousands of properties, this would be reasonable only to the richest anorak with an army of helpers.’
The financial incentives of a privatised Land Registry would likely rule out not merely investigations involving the bulk release of data but also those where more limited numbers of properties were involved. The consultation paper does not lay out any plans to protect the existing reach of the FOI Act and so it is uncertain whether the Act would continue to apply at all to the Land Registry if privatised. In order to support its open government and anti-corruption agendas, the government should prioritise reforms to the Land Registry that increase the transparency of land and property ownership in the UK, including guaranteeing access to data by investigators to conduct analysis of land ownership by improving existing FOI rights.
Access to data and information about land and property ownership is also critical to support the government’s neighbourhood planning and community rights agenda, empowering communities to reap the benefits of some of the most progressive community asset acquisition and development mechanisms in the world. Transparency is particularly necessary for communities to tackle community assets in difficult ownership, which can otherwise blight neighbourhoods and/or inhibit development.
It has long been recognised that government has a significant interest in knowing and understanding land ownership in its jurisdiction; the first attempt by the state to create a record of land ownership was the Domesday book of 1087. Having an accurate understanding of land can help government at all tiers improve planning and local services, inform policy and identify crime and corruption. At present, the Land Register is an incomplete source of information; there are no land titles recorded for about 15% of England and Wales. Identifying and filling gaps in information on land ownership and making the most of land registers as a core data asset is a strategic task that requires national coordination. This will be more difficult to achieve if the Land Registry is transferred out of public hands.
It is also unclear what impact privatisation would have on government’s own ability to access and utilise Land Registry data. The Office for National Statistics has recently launched a new single Official House Price Index, replacing separate indices published by ONS and Land Registry, which is to be based on Land Registry data. Such initiatives would need clear protections negotiated within the contract with the private entity to safeguard their future and prevent any loss of data to the public sector, not to mention the public.
The Land Registry maintains the only record of land ownership recognised by law. In updating and maintaining the register and resolving disputes the Registry serves an important legal function. For the land registration system to function, businesses, private individuals and any entity involved in the buying and selling of title to land must have confidence that the Land Registry is operating independently of commercial or specialised interests. Avoiding any conflict of interest and assuring the Land Registry’s impartiality will be significantly harder to achieve if its functions are carried out by a private entity. We therefore consider the Land Registry’s own accountability to be best served through remaining as a public body.
Conclusion
We are concerned that the privatisation of the Land Registry would have a detrimental impact on transparency, civic participation and accountability on an issue of national importance:
- We consider that the economy would be best served through the Land Registry publishing its data in an open format, and are concerned that privatisation would at best freeze access to Land Registry data at current levels, and at worst introduce new barriers and restrictions to data use and reuse.
- We are concerned that privatisation of the Land Registry would prevent access to the data needed to conduct large scale investigations into the ownership and use of land, hampering anti-corruption efforts.
- We consider that the government’s neighbourhood planning and community rights agenda would be better served if local communities had enhanced access to data and information about local land ownership and use, and are concerned that privatisation would make this less likely.
- We consider that the public and government’s interests of having an accurate record of land use and ownership would be better served through keeping the core statutory functions of the Land Registry within government, protecting and promoting land registers as core data assets.
- We are concerned about the potential impact of privatisation on the actual and perceived impartiality and accountability of the Land Registry.
We do not consider keeping the registers in public ownership or maintaining access to current open data to be sufficient protections. Land Registry data is a resource of national significance, and access to it should not be controlled by a private entity that will act on commercial rather than public interests.
We urge the government to reconsider its proposals in order that they align with its aims to support economic growth, increase transparency and openness, and tackle corruption.
This submission outlines the position of the UK Open Government Network and is particularly endorsed by the following signatories:
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