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Land Registry overcharged users by nearly £40m in Northern Ireland

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Comptroller and Auditor General Kieran Donnelly

Comptroller and Auditor General Kieran Donnelly

Comptroller and Auditor General Kieran Donnelly

Auditors acting on an anonymous tip-off have found that people registering land and property sales in Northern Ireland were overcharged by almost £40m across a 13-year period.

The investigation into Land & Property Services' (LPS) LandWeb project found it failed to deliver value for money.

The Northern Ireland Audit Office (NIAO) began its probe after a member of the public flagged concerns.

Its report, published today, details evidence of poor strategic planning by officials.

LandWeb is a public-private partnership, managed by the LPS and delivered by BT, but auditors found it will end up paying out more than twice the contracted price.

The original service contract with BT was valued at £46m. However, LPS estimates that by July 2021 the total payments to BT will reach £106.9m - 138% more than originally estimated.

Today's report notes that a failure to cut excessive fees - typically charged for basic land registry searches - effectively created an indirect tax on customers.

Since 2006/07, the net surplus has totalled around £39m. A further £9m surplus is expected in the current financial year.

Comptroller and Auditor General Kieran Donnelly said he was "alarmed" that efforts were not made to secure better value for money for users.

LPS, a division of the Department of Finance, entered the £46m public-private deal with BT to computerise and modernise the registry system through LandWeb in 1999. BT financed the development and operation of the service, recouping their costs through a transaction fee from customers' access charges.

The NIAO previously investigated the LandWeb project in 2008.

In 2010 a report by Stormont's Public Accounts Committee (PAC) flagged concerns around its value for money.

At the time, the PAC said land registry fees should reflect the cost of services and excessive surpluses should be avoided.

Today's report was prompted by a tip-off raising concerns about waste of public money.

It finds that poor strategic planning by the Department of Finance gave rise to a series of extensions to its service contract with BT.

While the original duration was 17 years from 1999 to 2016, the contract agreement is now likely to extend beyond 2021, with total payments increasing from an initial estimate of £46m to almost £98m at April 2019. LPS estimates that the total payments made under the contract up to July 2021 will reach £107m.

The report recommends that revised fees should be urgently introduced, after concluding that existing fee levels led to users being overcharged. The report says these excessive surpluses "can be viewed as a form of taxation".

Mr Donnelly said: "My report recognises 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. 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 £1.8m from the extension term 2019 to 2021, I found no evidence to clearly demonstrate that the LandWeb project has delivered value for money."

A Department of Finance spokeswoman said: "The department fully accepts the NIAO report and is implementing its recommendations. As the report acknowledges, cost savings of £1.8m have already been negotiated as part of a contract extension from 2019-2021."

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."

Belfast Telegraph