Property buyers 'overcharged by £30m during boom’
Property and land buyers have been overcharged by £30m for registering sales in the last seven years, a damning inspection report has found.
The surplus income generated by the Land Registers Agency - blamed on its failure to reduce fees during the housing boom - effectively created an indirect tax on customers, according to Stormont's Public Accounts Committee (PAC).
The body responsible for recording land and property transfers (which is now part of the Land and Property Services) was obliged to make enough to cover its costs, but its income soared when the market took off in the mid-2000s.
Committee chair Paul Maskey asked why the agency had not rapidly offset the revenue hike by dropping charges.
The issue was one of a number flagged up by the committee in its assessment of the public-private deal that has seen British Telecom paid £54 million over the last decade to computerise and modernise the registry system through its Landweb project.
"Land Registers is legally obliged to recover the full costs of its operation, and the level of fees set was intended to do this," said Sinn Fein MLA Mr Maskey.
"However, it is clear to the committee that Land Registers failed to adjust its fees quickly enough in response to the increasing numbers of transactions due to the rise in the market.
"This resulted in it generating surplus income of over £30 million since 2003. In effect this is an indirect local tax being levied on its customers which has added to the cost of conveyancing."
The PAC report found that the registry service had been enhanced as a result of the Landweb project.
But committee members queried a number of decisions taken by the agency on the design and management of the scheme.
Mr Maskey noted that the value of the 17-year contract with BT was worth £46 million when it was signed in 1999 but was now estimated at £78 million.
He said this was due to additions and changes to the deal and an unprecedented rise in property transactions between 2004 and 2008.
"Landweb has provided many improvements, including the ability to process vastly increased numbers of property transfer applications resulting in faster turnaround times," he said.
"It has provided a secure electronic archive for documents and has enhanced levels of customer service.
"However, having said that, there are areas in which the committee still has concerns and believes that better value for money could have been secured."
Mr Maskey said Landweb reflected well on BT's ability to deliver on a complex project and also praised the commitment of registry staff.
But he criticised the agency for what he claimed was a lack of strategic forward planning on how computerisation could transform its business.
In particular he said Land Registers failed to make proper staffing arrangements and ended up relying on BT to provide casual workers - a practice that has cost over £16 million to date.
He said internal delays in progressing legislation resulted in compensation payments totalling £2.6 million being paid from public funds to BT over a five-year period for loss of income.
Mr Maskey said he was disappointed that the Department of Finance and Personnel, which has responsibility for the agency, did not identify and disseminate the lessons emerging from the project earlier, but said the agreement with BT could be re-evaluated ahead of its breakpoint in 2014.
"This provides the department with an opportunity to assess the value for money of the project and re-negotiate," he said.
"I would therefore urge it to put in place an action plan to ensure that it is fully prepared for these negotiations."