Cost of registering land sales 'too high'
People who register property and land sales with Land Registers Northern Ireland (LNRI) are paying too much for the service provided, according to an Audit Office report published today.
A multi-million pound deal made by LRNI in 1999 for BT to computerise its operations had been highly successful and delivered substantial improvements but had failed to deliver one of its key objectives – significant reductions in the fees charged, according to the report.
It also questioned whether BT was making too much profit in a deal shrouded in secrecy.
The LandWeb Project has won a series of IT industry awards for the computerisation of hundreds of thousands of records showing ownership of property and land.
Fees are charged to cover costs, but the organisation is not supposed to make a profit, but surpluses have steadily increased since 2004-05 to £8.6m (€01.8m) by March last year – when surpluses represented 34% of total fee income.
Fees are charged on the basis of property price and despite a 32% reduction in charges last year another surplus is expected for 2007-08, said the report.
The Audit Office said the LRNI had told them buoyancy in the property market was a major factor in sustaining the rise in the level of surplus.
The report by Auditor General John Dowdall said: “It is important that excessive surpluses are not generated as this indicates LRNI customers are paying too much for the service provided.
“Indeed these excessive surpluses could be viewed as a form of taxation.”
What the report called the unprecedented rate of growth in the value of housing in recent years had generated surpluses because more and more property and land was falling into higher charge bands.
LRNI defended itself saying its fees were only marginally more expensive that those in England and Wales and below those in Scotland and the Irish Republic.
It told the Audit Office using any other system than that being used would penalise those at the lower end of the property transactions ladder where fees would have to be increased to cover costs involved in a reduction at the top end.
Nevertheless the report stated: “Given that LRNI’s primary financial objective is the recovery of the cost of delivering its services [as defined in legislation], we recommend that the Department of Finance and Personnel and LRNI re-examines the fee structure currently in place to ensure that its impact does reflect the cost of delivering the service.”
The LandWeb deal between LRNI and BT was one of the first financially free standing independent technology projects in the Private Finance Initiative/ Public Private Partnership [PFI-PPP] field as it required no public sector funding to enable it to progress.
The seventeen year deal – two years of development followed by 15 operational years – has a break option at year 12.
