A public-private partnership to provide online access to land registry documents will end up paying out more than twice the contracted price, auditors have found.
The Audit Office said there was no evidence to clearly demonstrate that the Land and Property Services’ LandWeb project had delivered value for money.
The Landweb project provides online access to Northern Ireland’s Land Registry, Registry of Deeds and Statutory Charges register.
The original service contract with BT was valued at an estimated £46 million. BT financed the development and operation of the service and recouped their costs through a transaction fee taken off the charges customers pay the LPS to access the records.
While the initial contract term was 17 years from 1999 to 2016, it has been extended several times. At April 2019, total payment to BT had risen to £97.89 million, which comprised £78 million on transaction fees plus various add-ons.
LPS, which is a division of the Department of Finance, estimates that by July 2021 the total payments to BT will reach £106.9 million – 138% more than what was estimated in the original contract.
Auditors found that the LPS had achieved a net surplus of approximately £39 million from the LandWeb project since 2006-07. They recommended the urgent introduction of revised fees for customers.
Comptroller and Auditor General Kieran Donnelly said existing fee levels were set too high and users of the services are being overcharged.
Auditors blamed poor strategic planning by the Department of Finance for the series of extensions to the service contract.
Their investigation was prompted by an anonymous member of the public who raised concerns that the project was wasteful of public money.
Mr Donnelly stressed that a “fully functional and consistent IT service” has been provided by BT throughout the LandWeb project to date.
“However, I am alarmed that mechanisms were not put in place to secure better value for money for citizens,” he added.
“Measures such as benchmarking, market testing and open book accounting should have been part of the Department’s/LPS’s agreement with BT, to ensure greater transparency and competitiveness.
“While the Department did negotiate cost savings of £1.8 million from the extension term 2019 to 2021, I found no evidence to clearly demonstrate that the LandWeb project has delivered value for money.”
He said his findings were particularly concerning given Stormont’s Public Accounts Committee had examined the issue in 2010 and made a series of value for money recommendations.
Department of Finance spokeswoman said: “The Department fully accepts the NIAO report and is implementing its recommendations.
“As the report acknowledges, cost savings of £1.8 million have already been negotiated as part of a contract extension from 2019-2021.
“The report also acknowledges that the Department was unable to introduce a new Fees Order to manage surplus fees due to the absence of the Assembly.
“The Department is urgently progressing a revised Fee Order to be in place by 2021 and a procurement process is underway to replace the LandWeb system.”
A spokeswoman from BT said: “The LandWeb system contract was awarded to BT after an open and competitive procurement process.
“It’s been established that the contract provided value for money from the outset, as well as delivering a fully functional and consistent IT service.
“BT accepted all commercial risks and costs, with no guarantee of income, recovering its investment from a fixed proportion of the transaction charge from LPS customers.
“A review by the Department’s Contract Review Group in 2011, which drew a number of voluntary financial concessions from BT, concluded that the contract continued to provide value for money.
“BT has given further concessions, including discounts and further tech refreshes for the extended term.
“We will continue to work with government departments to ensure this contract and any future contracts are conducted in partnership to best serve the interests of Northern Ireland.
“We are proud of our role in supporting the Land and Property Services.”