UK Land Registry privatization plan weakens drive on corruption-experts

Reuters News
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Posted: Apr 14, 2016 1:00 PM

By Paola Totaro

LONDON (Thomson Reuters Foundation) - The British government risks losing "trust and the moral high ground" around the world if it goes ahead with plans to privatize the 150-year-old UK Land Registry, experts in the field have said.

Land and property specialists are concerned that the plan, announced by Business Secretary Sajid Javid on the eve of the Easter holiday, is aimed solely at "raising cash in the short term", according to Geoffrey Payne, international advisor to the World Bank.

Payne told the UK Land Forum, a seminar on land and corruption, that publicly owned land registers were essential to fostering community trust and social stability and could be powerful tools to combat land corruption, particularly in developing economies.

"... it is very important that a land registry be held which gives reliable up-to-date information on who owns what - and with what rights - and that this is maintained in a way that is affordable, efficient and gives access to people to ensure transparency and good governance," he told the Thomson Reuters Foundation in an interview after the seminar on Wednesday.

"This is one of the main ways that we can help to reduce corruption and abuse of land management," he said.

"I was very concerned to see that the UK government is now proposing to privatize the Land Registry, which ... has maintained a very accurate record of land holdings in the UK."

"This (privatization) is being done for purely commercial and ideological reasons, not public benefit. This means that it will be impossible for the United Kingdom to maintain the moral high ground when it comes to advising and offering loans to developing countries," he said.

"The UK Department for International Development (DFID) has interests in improving governance and reducing corruption and improving incomes and living standards ... it makes life for DFID very difficult, if it is advising governments on reducing corruption, if the UK itself in land management and governance is not setting the very highest standards of ethical behavior ..."

Javid, when announcing the plan, defended it as a bid to make the Land Registry more efficient and "to meet government objectives in the best way possible".

"Creating an organization that can focus on delivering modernized services and bringing in 'best in class' knowledge and external investment is a key part of this," he said.

"High-quality Land Registry services and confidence in the property market will remain a high priority for government throughout this process."

The Land Registry employs more than 4,500 civil servants and holds around 24 million titles to properties across England and Wales, the seminar was told.

PUBLIC OPPOSITION TO PRIVATIZATION

Nicky Heathcote, head of the Chief Land Registrar’s Office, said a nine-week national public consultation had been launched, lasting until May 24.

Public opposition to the proposal has been growing, marked by the launch of a petition against privatization and a campaign by the activist group 38 Degrees.

John Manthorpe, who was Chief Land Registrar for more than a decade, is among opponents of Land Registry privatization.

He told the Thomson Reuters Foundation that a similar proposal in 2014 saw the public roundly reject privatization, more than 91 percent of respondents saying they did not agree that a sell-off would make the Registry more efficient.

"On top of that, 89 percent said they would not be comfortable with the private sector processing land registration information," he said.

In a paper 'Why Privatising Land Registration is Wrong’ he argues that public ownership is vital to transparency.

Questions "...can arise from sale and purchase, inheritance, mortgage, discharges, leases, restrictions, matrimonial and family matters ... none of this massive and daily movement of guaranteed interest in land, between citizens, business, public bodies and financial institutions on which the market economy depends, could function without an impartial and trusted system of land registration," Manthorpe said.

"The Land Registry is self financing, operating at no cost to the public purse. It has an excellent record of holding and reducing its costs and its fees to the customers. It pays an annual dividend to the Exchequer. It is not an activity that any responsible government can transfer to the private sector."

In the UK, nearly 40 percent of all land holdings are still held in aristocratic estates and so have never been placed on the market for official registration, Payne said.

But all land that is registered is available for scrutiny by the public, ensuring confidence and security for both investors and landowners, he said.

"The real challenge and real problem is that if the government does proceed to privatize, the interest and the motivations for those running it will be in personal or private, not the public interest", he said.

CORRUPTION

The seminar also heard from specialists assessing the impact and origins of land corruption in developing economies and identifying measures to tackle the problem.

British Prime Minister David Cameron will host an international anti corruption seminar in London on May 12.

Sheila Masinde of Transparency International Kenya said the Global Corruption Barometer Report had revealed that in Africa, half of all clients of land administration services surveyed had reported being affected by corrupt practices.

She said one in five people say they have paid a bribe - 70 per cent in Sierra Leone - and further research showed that land developers and speculators seek out countries with weak governance.

"Land corruption is driven by poor oversight, weak institutions, a lack of capacity and low public and stakeholder participation in the land administration process," she said.

"The areas most vulnerable to corruption in land administration are auctioning for land sales, land transfers, enforcement of land rights, valuations and compensations for local communities ... finding the correct balance between centralized and decentralized land management bodies is key to limiting corruption risks."

(Editing by Tim Pearce. Please credit the Thomson Reuters Foundation, the charitable arm of Thomson Reuters, which covers humanitarian news, women's rights, corruption, climate change. Visit http://news.trust.org)